And say … what, exactly? That Cambridge Analytica took Facebook’s sales pitch to advertisers and developers seriously? CNN reported this morning that Mark Zuckerberg has reluctantly concluded that he will have no choice but to offer a mea culpa to Congress, but he’s hoping he won’t be alone:
Facebook sources tell CNNMoney the 33-year-old CEO has come to terms with the fact that he will have to testify before Congress within a matter of weeks, and Facebook is currently planning the strategy for his testimony.
The pressure from lawmakers, the media and the public has become too intense to justify anything less.
The Facebook sources believe Zuckerberg’s willingness to testify will also put pressure on Google CEO Sundar Pichai and Twitter CEO Jack Dorsey to do the same. Senate Judiciary Chairman Chuck Grassley has officially invited all three CEOs to a hearing on data privacy on April 10.
This may be less about Congress and more about Wall Street. Advertisers have begun pulling out of Facebook and investors have begun searching for the exits. The current strategy of offering limited public commentary has failed to restore their confidence, as CNN Money’s chart of FB stock over the past month demonstrates:
Furthermore, jumping in on this hearing might give Zuckerberg some commercial as well as political cover. The Washington Post reported today that members of Congress see the Cambridge Analytica scandal as a means to push for broader federal intervention in social-media platforms in the name of privacy protection:
A panel of Senate lawmakers aims to grill the top executives of Facebook, Google and Twitter next month, the latest indication that the controversy surrounding Facebook’s data privacy practices now threatens to envelop the whole of Silicon Valley.
The Senate Judiciary Committee’s chairman, Republican Sen. Chuck Grassley (Iowa), on Monday scheduled an April 10 hearing on the “future of data privacy and social media” — and the panel said it would explore potential new “rules of the road” for those companies.
It’s the third such request that lawmakers have made of Facebook Chief Executive Mark Zuckerberg to testify since it emerged earlier this month that Cambridge Analytica, a data firm hired by President Trump during the 2016 campaign, may have improperly accessed names, “likes” and other personal information from at least 30 million Facebook users.
But the Senate Judiciary Committee’s hearing spells the first time that congressional lawmakers have expanded their scrutiny to include Zuckerberg’s peers, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey. The result could be a hearing that exposes both of those tech giants – whose data is not known to have been taken by Cambridge Analytica – to uncomfortable questions about the extent to which they profit from their users’ most personal data, too.
Zuckerberg’s sudden decision to comply may have something to do with that expansion. The previous two requests would have left Zuckerberg twisting in the wind alone, with focus only (or mainly) on Facebook’s data-privacy sins. This way, Zuckerberg comes along with other political targets. Rather than have Facebook take a beating, Zuckerberg can argue that Congress should more broadly regulate social-media platforms and cast the entire industry as the problem.
Why would these three CEOs argue for that? It’s simple; they’re already the market leaders in these fields. Every new regulation makes it more difficult for start-ups to compete for their share of the market. Massive platforms like Facebook, Google, and Twitter can afford the compliance costs that come along with regulation; the next generation of social-media platforms likely won’t. It’s an easy way to strangle competition before it ever arises.
Surprisingly or not, the Post’s previous owner argues today that there are other and more pressing reasons to keep government from regulating speech platforms. How much influence do we want to hand regulators and politicians in governing speech, Donald Graham asks — and he has some personal experience with that question:
Google and Facebook are platforms where a great deal of today’s political speech and reporting of news takes place, and regulation is an inherently political act. If you want a Technology Company Regulation Commission, its chairman and its members will be appointed by presidents and will reflect their policies.
Do presidents really play a role in regulation or enforcement? Well, you can listen to the Watergate tapes and hear President Richard Nixon direct his advisers John Dean and H.R. Haldeman to use the Federal Communications Commission’s regulatory process to take away TV stations owned by The Washington Post Co. Challenges to stations’ licenses by Nixon supporters did ensue and, had Nixon not resigned, they would have been heard by an FCC led by the former chairman of the Republican National Committee . It is difficult to convince me that regulation is apolitical.
If you want Google, Facebook and other tech companies regulated, you are asking for a system in which President Trump — or (perhaps in the future) President Elizabeth Warren — plays a role in deciding what goes on your Facebook page or what flows from your Google search. Is that really what you want?
And how do you argue that government should be able to regulate speech on YouTube but not your own speech, or that of The Post?
Social media platforms are not public utilities. People can come and go as they please, and they can share or withhold their personal data as they wish, too. Facebook and Zuckerberg are paying the price for misleading their customers about access to that data. Why not let the market deal with the Zuckerbergs? And why not make sure that the field remains clear for challengers to these platforms, rather than secure their monopolies by creating vast compliance costs that will cripple future competition?
Addendum: Here’s a better question. Why hold these hearings at all until after the FTC determines whether Facebook violated its 2011 consent decree on data privacy?
Under the terms of the 2011 settlement, Facebook agreed to get user consent for certain changes to privacy settings as part of its resolution of federal charges that it deceived consumers and forced them to share more personal information than they intended. That complaint arose after the company changed some user settings without notifying its customers, according to an FTC statement at the time.
An FTC spokeswoman said in emailed statement that the agency is aware of the issues that have been raised, but can’t comment on whether it is investigating. The agency takes “any allegations of violations of our consent decrees very seriously,” the statement said.
If the FTC finds Facebook violated terms of the consent decree, it has the power to fine the company more than $40,000 a day per violation.
Multiply $40,000 by the 50 million user accounts accessed by Cambridge Analytica, and you get a number that far exceeds FB’s market capitalization, even aside from the “per day” clause. Perhaps we should enforce existing law and court orders before having discussions on further regulation.