Senator Warner: US tech companies 'prostituted themselves' to access China

See what a Chinese tech giant's campus is like
See what a Chinese tech giant's campus is like

Senator Mark Warner says China's technological rise has been fueled by US tech companies that "prostituted themselves" to gain access to the Chinese market.

In an interview with CNNMoney's PACIFIC newsletter, Warner offered his strongest criticism to date of American tech giants and their accession to Chinese demands.

"A lot of Americans don't understand what's happening in China and how good their tech companies have become," Warner, the top Democrat on the Senate Intelligence Committee, told CNNMoney."

Partially, that's because American companies have bastardized themselves so much to get into the Chinese market that they've given away a lot of the intellectual capital."

Apple, (AAPL) Amazon, (AMZN) Microsoft (MSFT)and other big tech companies have all stored users' encryption keys in China in exchange for access to the Chinese market. Any handover of data is a top concern for lawmakers and data privacy experts.

Warner believes China's rising technological prowess should be a top priority for lawmakers and the intelligence community.

The Virginia Senator has clearly thought deeply about data privacy and cybersecurity since lawmakers learned about Russia's meddling in the 2016 presidential election. But he is also acutely aware of the Sisyphean task of moving Congress forward on meaningful regulation.

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Warner said he is "concerned" the government is not moving fast enough to keep up with the pace of technological change. He believes it is therefore ill-positioned to enforce data privacy laws and ensure that foreign actors don't meddle in future elections.

Warner warns that we're likely to face another event like Cambridge Analytica, in which Facebook user data was transferred to a political data firm hired by the Trump campaign.

"The chance of another incident is going up immensely," he said.

His concern is that Congress is regulating the past -- not the future.

"The US government is still trying to understand 2016 technology," said Warner, adding that bad actors will likely be using new tools to meddle in elections in 2018 and 2020. "We're not really ready."

"We have a $700 billion defense budget we just passed, but I wonder if we're buying 20th Century stuff," he said. "Russia has a $68 billion defense budget and they are much heavier on misinformation, disinformation and cyber."

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Warner also begrudged the slow process of government. We're still trying to figure out where inside US government this fits," he added. "You've this task force set up and that task force set up. Are they really working together?"

"If we don't put some framework around this, bad stuff is going to happen," he said.

But Warner also cautioned against over-regulating tech and handicapping innovation.

"I've got no interest in not seeing Facebook continue to succeed. ... The worst thing in the world would be to knee-cap innovation in American tech companies and open the field to the exact Chinese equivalents."

Warner said he has four main ideas about how to regulate tech, though he says he's still figuring out which ones will work and have a chance of passing through Congress.

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Those plans include forcing tech companies to assume responsibility for the content that appears on their platforms and forcing them to flag non-American users posing as Americans. Warner is also considering regulation that would give users ownership of their data. His final idea would see Facebook, Twitter (TWTR)and Google giving users financial compensation every time their data is used by advertisers.

But Warner knows that none of this regulation will matter until lawmakers and the White House get behind it. He's not confident that will happen under a Trump administration.

"There's not anybody in charge in the White House that's trying to make sure our election

security is safe in 2018," he said. "You've got to start with a White House that acknowledges the problem."

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