Mark Zuckerberg may have become more confident and calm in facing congressional inquisitions, but his company faces even deeper trouble with lawmakers ready to punish Facebook for its transgressions on privacy, civil rights, competition and the future of U.S. democracy.
The main topic of Wednesday’s House Financial Services Committee hearing was supposed to be Facebook’s plans to launch Libra, a digital currency that critics worry would undermine the international financial system. But the Facebook CEO wound up facing more than five hours of often-strafing questions on the company’s role in society, as Chairwoman Maxine Waters (D-Calif.) and other Democrats openly mused that maybe the time has come to break up the giant social network.
The hearing went as designed, Waters told reporters afterward. “I told him that we were not going to make it comfortable for him,” she said. “I don’t think that he should be moving forward with this huge project and this big idea with all of these other concerns that have not really been resolved.”
These are POLITICO’s top revelations from Wednesday’s hearing:
Democrats’ list of grievances keeps growing
Hours of questioning from the panel’s Democrats reflected just how far Facebook’s fortunes have fallen with the party. Once the darling of Obama-era Democratic Washington, the company today faces a barrage of criticism from the left, most vocally expressed by Sen. Elizabeth Warren’s (D-Mass.) trust-busting calls on the 2020 campaign trail.
And Facebook has only itself to blame, Waters told Zuckerberg.
“You have opened up a serious discussion about whether Facebook should be broken up," the California Democrat said early in the hearing as she reeled off a series of complaints about everything from the company’s role in facilitating foreign interference in U.S. elections to the lack of diversity in its leadership ranks.
That set the tone for much of the rest of the day, as the committee’s Democrats repeatedly lambasted Facebook for allowing politicians to lie in political ads without facing fact-checking — a policy that has drawn the ire of top 2020 contenders including Warren and Joe Biden, himself the subject of a misleading attack ad from the Trump campaign.
Zuckerberg insisted that the decision is rooted in Facebook’s commitment to free speech, and that the company wants to ensure “people can see for themselves what politicians are saying.” But that didn’t appear to sway lawmakers.
“Why should the very politicians who lead our country be held to a lower standard for truthfulness and decency than the average American?” asked Rep. Rashida Tlaib (D-Mich.).
Tlaib, who is a Muslim, also objected to posts showing that white supremacists have used Facebook events pages to organize armed protests of mosques. “It is hate speech. It is hate. And it’s leading to violence and death threats in my office,” she said, adding, “We need to be able to play a part in reducing that violence.”
Other lawmakers questioned Facebook’s track record on civil rights. Rep. Al Green (D-Texas) pressed Zuckerberg on whether the leaders steering the Libra Association, which will manage Libra, include any people of color or members of the LGBTQ community. (Zuckerberg didn’t know.)
Several raised issues like Facebook’s alleged violations of federal housing laws in the wake of accusations by the Department of Housing and Urban Development that the company has allowed marketers to exclude users by race in real estate ads, and its inability to stop Russia-backed trolls from heavily targeting African American users in their 2016 meddling campaign.
Republicans are more scattered on what they think of Facebook
When Zuckerberg couldn’t answer questions about the company’s ongoing civil rights audit, Rep. Joyce Beatty (D-Ohio) scoffed. “It’s almost like you think this is a joke, when you have ruined the lives of many people, discriminated against them,” she said.
The hearing underscored the divide in the GOP about how to rein in Facebook, thanks to a mix of competing instincts over whether to praise the company for its business innovation or criticize it for intervening in the financial system and policing free speech.
The committee’s lead Republican, North Carolina Rep. Patrick McHenry, tried to set the tone for the hearing by warning that “American innovation is on trial today.” He also slammed California Democrat Brad Sherman for predicting that Libra could wreak even more damage than the terrorist attacks of Sept. 11, 2001.
“I have my qualms about Facebook and Libra, I do, and the shortcomings of big tech — there are many,” said McHenry, who also related an anecdote about early attempts to regulate automobiles. “But if history has taught us anything, it’s better to be on the side of American innovation, competition and most importantly the freedom to build a better future for all of us.”
But other committee Republicans proceeded to raise grave concerns about Libra’s potential impact, pressing Zuckerberg on fears about damage to the U.S. dollar and grilling him on why Facebook was losing marquee corporate partners such as Visa and eBay that had initially signed up to back Libra.
Some voiced other grievances with Facebook’s influence.
Rep. Bill Posey (R-Fla.) put Zuckerberg on the spot about Facebook’s decision to limit the reach of false claims that vaccines are dangerous, arguing that the move restricted free speech rights. Posey pressed Zuckerberg on whether Facebook could “support users’ fair and open discussions and communications related to the risks as well as the benefits of vaccinations.”
“You’re making a bad mistake,” Posey warned.
Zuckerberg was more confident; lawmakers were more hostile
The last time he testified on Capitol Hill, an apologetic Zuckerberg came under fire from lawmakers who sought to take him to task for Facebook’s handling of 2016 election interference and the Cambridge Analytica privacy scandal — but who were also stymied at times by confusion over the world of high technology.
A year and a half later, House lawmakers on Wednesday appeared to mostly speak with a firmer grasp on tech as they aired grievances with the CEO, whose company’s regulatory woes have only multiplied since April 2018. But a more confident Zuckerberg appeared better prepared to take the heat, fielding questions on everything from financial regulation to content moderation to concerns over Facebook’s growing power and size.
The improved performance comes as the CEO has taken a more public role in addressing regulatory concerns about the company. Zuckerberg dialed up his direct outreach to top officials in Congress and at the White House with a series of closed-door meetings in September. He’s also quietly huddled away from Washington in recent months with Sens. Lindsey Graham (R-S.C.) and Brian Schatz (D-Hawaii), sessions that touched on their concerns about Libra and data privacy, according to the lawmakers.
Even so, Zuckerberg acknowledged Wednesday that lawmakers might still hold reservations about Facebook’s latest plans on Libra, given the heavy scrutiny the company is under.
“I believe that this is something that needs to get built, but I get that I’m not the ideal messenger for this right now,” Zuckerberg said in his opening remarks. “We’ve faced a lot of issues over the past few years and I’m sure there are a lot of people who wish it were anyone but Facebook who were helping to propose this.”
Some questions seemed to catch Zuckerberg more flat-footed. He said he did not know whether Facebook has ever done business with President Donald Trump’s D.C. hotel, a question posed by Rep. Madeleine Dean (D-Pa.). And he had no ready answers for a series of rapid-fire questions from Rep. Alexandria Ocasio-Cortez (D-N.Y.), including one about a recent POLITICO story revealing that he has hosted off-the-record dinners with conservative pundits and journalists.
“In your ongoing dinner parties with far-right figures, some of who advanced the conspiracy theory that white supremacy is a hoax, did you discuss so-called social media bias against conservatives and do you believe there is a bias?” Ocasio-Cortez asked.
“Congresswoman — sorry, I don’t remember everything that was in the question,” Zuckerberg responded.
She said: “That’s all right. I’ll move on.”
Libra faces more alarm bells than ever
The hearing raised further doubts that Facebook and its partners would be able to launch Libra next year as planned. Opponents notched a victory when they pushed Zuckerberg to commit to walking away from the project if need be.
Zuckerberg attempted to put lawmakers at ease by saying he would be willing, as a member of the Libra Association, to support delaying Libra’s rollout if U.S. regulators didn’t approve. Zuckerberg used the hearing as an opportunity to stress a narrative that policymakers are increasingly starting to hear from Facebook — that his company can no longer speak on behalf of the group that will manage Libra because the organization is now officially established in Switzerland and 20 other partners have a say.
Zuckerberg’s assurance wasn't enough for members such as Rep. Bill Huizenga (R-Mich.), who pressed Zuckerberg on what Facebook would do if the association that will manage Libra wanted to move forward without locking down U.S. officials’ approval.
"Then I believe we would be forced to leave the association," Zuckerberg said.
The Libra Association in recent weeks lost support from major financial institutions and technology companies that had earlier planned to join the Libra effort, including Visa, MasterCard and PayPal. Zuckerberg attributed the loss of a quarter of its tentative initial membership to the fact that Libra’s a “risky project” under intense scrutiny.
Lawmakers saw the exit of Libra’s early backers as another reason to question whether it should move forward. Rep. Ann Wagner (R-Mo.) said maybe the departures were a sign that “they’re not so sure it’s going to work, either.”
Lawmakers were unconvinced by Zuckerberg’s statement that Facebook’s aim is to improve the “stagnant” financial system and help people without access to traditional banking. Instead, Sherman expressed outrage that “the richest man in the world” — that honor in fact belongs to Amazon CEO Jeff Bezos, although Zuckerberg is close — would “come here and hide behind the poorest people in the world and say that’s who you’re really trying to help.”
He continued, “You’re trying to help those for whom the dollar is not a good currency — drug dealers, terrorists, tax evaders.”
Zuckerberg plays to patriotism and China fears
Zuckerberg tried to make a case, which rang hollow with many lawmakers, that Libra is important to helping spread American values globally. Not acting to overhaul the international payments system, he argued, would come back to bite the United States.
“Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world,” he said. “If America doesn’t innovate, our financial leadership is not guaranteed."
It’s an argument that didn’t quite connect with lawmakers who had already been questioning why Facebook and its partners are planning to operate Libra from Geneva, rather than the United States.
But Zuckerberg warned that “the rest of the world isn’t waiting” and tried to focus lawmakers’ attention on threats from China, which he said was moving quickly to launch similar technology in the coming months.
Zuckerberg’s testimony echoed a common refrain from the tech industry and a new point of emphasis for Facebook: U.S. lawmakers should be more concerned about China’s growing influence on the internet than of American companies’ expansion efforts.
Those concerns also earned a prominent mention during Zuckerberg’s highly publicized speech on free expression last week in Washington, where he warned that the U.S. could lose pace with Beijing in setting global rules of the road for the internet.
Katy O'Donnell contributed to this report.
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