Why Facebook Thinks Splitting Doesn’t Make Sense

Facebook facing calls to break up

Whereas some US politicians are calling for Facebook (FB) to break up, company executives disagree. In March, US lawmaker and Democratic presidential hopeful Elizabeth Warren made a case for splitting up the country’s technology giants, citing the need to promote more tech competition. Warren singled out Facebook, Google (GOOGL), and Amazon (AMZN) as ripe for breaking up in a bid to control their influence.

Why Facebook Thinks Splitting Doesn’t Make Sense

Facebook warns breakup could be counterproductive

Facebook head of global affairs Nick Clegg maintained the company’s stance against breaking up in speech in Berlin last week, arguing that it would not address data privacy concerns, election meddling by foreign agents, or offensive content. Facebook COO Sheryl Sandberg made a similar argument in May during an interview with CNBC, warning that forcing US technology leaders to break up could backfire and allow Chinese competitors to dominate the global tech space.

Chinese tech companies gaining on American counterparts

Chinese companies such as Baidu (BIDU), Alibaba (BABA), and Tencent (TCEHY) are giving their American counterparts a run for their money in autonomous driving, cloud computing, and digital payments. Baidu, for instance, is gearing up to provide autonomous taxi services in China. The move could see it match Google sister company Waymo, which started providing autonomous ride-hailing service in parts of the US last December. Facebook’s revenue rose 26% year-over-year to $15.1 billion in the first quarter.