Congresswoman Joyce Beatty of Ohio comes out swinging at Zuckerberg, grilling him for Facebook’s failure to prioritize diversity at the company.
She noted Zuckerberg has $46bn in cash or cash equivalent and asks if any of this is managed by diversity-owned companies. Zuckerberg struggles to answer.
“I’ll take that as a no,” she said.
Beatty takes Zuckerberg, who invoked the civil rights movement in his defense of Facebook last week, to task for coopting the struggle of black Americans.
“It’s almost like you think this is a joke,” she said. “This is appalling and disgusting to me.”
Republican compares Zuckerberg to Trump: ‘You both challenge the status quo’
Republican representative Barry Loudermilk appears to compliment Zuckerberg by comparing him to Trump.
“You’re both very successful businessmen, you’re both capitalists, you’re both billionaires, and you’ve done very well,” he said. “But I think really what you share in common is you both challenge the status quo – he calls it draining the swamp, you see it as innovation.”
Congressmen love capitalism, it turns out!
While many members of the committee sought to grill Zuckerberg today, in the line of questioning from Roger Williams of Texas and French Hill of Arkansas, the congressmen congratulated Zuckerberg for his efforts to innovate.
“I congratulate you, like so many of my colleagues, on the extraordinary investment and entrepreneurial success of creating Facebook,” Hill said. “I do admire people in our capitalist system here that are disruptors – that find the weakness and try to exploit it with a new product that’s better for consumers.”
Williams ended his questioning with a final statement for Zuckerberg: “I’m really glad you’re a capitalist.”
Representative Andy Barr has perhaps the friendliest examination of Zuckerberg of the day, asserting that he supports the executive’s choice not to censor political ads, especially those from Trump.
“I do find it highly troubling that politicians are trying to bully you to be a fact-checker, and to be the speech police, especially in politics which are at the core of the first amendment,” Barr said.
Representative David Scott also addresses Facebook’s “practice of redlining certain communities” as outlined by the recent settlement with the Department of Housing and Urban Development.
“What have you put into action to eliminate these practices?” he asks.
“We entered into a settlement with these civil rights groups to to create a new standard where we block that kind of targeting,” Zuckerberg said. “And I think it’s worth noting that the standard that we set as industry leading.”
It is worth noting that new rules proposed by the Trump administration may legally enable this kind of algorithmic redlining in the future.
Democratic Congressman Lacy Clay of Missouri addresses a recent settlement Facebook made with the US Department of Housing and Urban Development related to its advertising platform violating the Fair Housing Act.
Clay asked if Facebook will reveal what algorithms that led to discrimination in this case. Zuckerberg danced around an answer, saying the company does not collect data on race specifically and that it is carrying out a large-scale civil rights audit on its policies.
“It’s always been against our policies for anyone to use the ad systems to discriminate, and we enforce those policies through a mix of technical systems and human review,” Zuckerberg said.
Democratic Congressman Brad Sherman of California criticized Zuckerberg’s claims that Libra will help poor and unbanked people around the world enter the financial system.
“The poor and unbanked need pesos, they need dollars that they can buy something at a local store,” he said. “You’ve done no effort to help the unbanked anywhere else and any other time.”
He said an anonymous currency is more likely to help drug dealers and other people seeking to circumvent traditional financial systems more than the poor and unbanked.
“For the richest man in the world to come here and hide behind the poorest people in the world, and say that’s who you’re really trying to help,” he said. “You’re trying to help those for whom the dollar is not a good currency – drug dealers and tax evaders.”
Anti-vaccine content on Facebook enters discussion
The hearings are quickly winding into topics outside of cryptocurrency.
Representative Bill Posey of Florida uses his time on the floor to ask Zuckerberg why Facebook cracks down on anti-vaccine content, seeming to support the theory – for which there is no scientific backing – that vaccines cause disabilities.
“I support vaccinations of children and adults, but I also support open and frank communication of the risk of vaccination,” he said.
Zuckerberg does not seem to know how to respond to a congressman supporting anti-vaccination groups.
“We try to focus on on misinformation that has the potential to lead to physical harm or imminent harm,” Zuckerberg says. “And that can include, especially misleading health advice.”
Congressman Gregory Meeks of New York questions Facebook’s commitment to the unbanked and underbanked in a heated exchange.
“Facebook is a multibillion, trillion-dollar company,” he said. “You say you are concerned about the underbanked unbanked – how much of Facebook money is in minority depository institutions?”
Zuckerberg responded saying Facebook is in “every country in the world except North Korea and China” and thus “we would be in almost every country where different activities are happening.” He did not address minority owned financial institutions specifically.
Congresswoman Nydia Velázquez of New York asks Zuckerberg if he agrees to a full moratorium on Libra pending congressional approval.
“Facebook’s slogan for a long time was ‘move fast, break things.’ Mr Zuckerberg – we do not want to break the International Monetary System,” she said.
Zuckerberg declines to commit to the moratorium.
Congresswoman Ann Wagner of Missouri asks Zuckerberg why major players have departed from the Libra Association in recent weeks.
Wagner said she finds the partners’ departures “highly concerning,” and that she questions whether he is “up to the task of meeting our money laundering and regulatory standards”.
“Because it’s a it’s a risky project and there’s been a lot of scrutiny,” Zuckerberg said of the departures.
McHenry asks Zuckerberg why he chose to base the Libra Association in Switzerland, a diplomatically neutral location, if he plans to comply with US regulation.
“We were trying to set up a global payment system,” Zuckerberg said. “Switzerland is where a lot of the international organizations are. Switzerland has certainly been forward-leaning on wanting to work through systems like this, but one of the things I want to be clear on is that the Libra Association is independent and we do not control it.”
Republican congressman Patrick McHenry of North Carolina has the floor now, asking Zuckerberg when his views on China became more adversarial, after the CEO implied he wants to beat the country to the field by launching Libra.
“My views have evolved,” Zuckerberg said. “I was more optimistic, but now I’m realizing China has some problems, which is why we worked with Beijing bringing fiber optic undersea cables from China to LA along with Google.”
House Financial Services Committee Chairwoman Maxine Waters grills Zuckerberg on the company’s decision not to remove false advertisements from politicians.
“From a business perspective, the very small percent of our business that is made up of political ads does not come anywhere close to justifying the controversy that this incurs for our company,” Zuckerberg said. “So this really is not about money. This is on principle, I believe in giving people a voice. I believe that ads can be an important part of voice.”
Mark Zuckerberg reads his opening statements, arguing in favor of American innovation and saying if the US does not allow the launch of a cryptocurrency, China will beat it to the field.
“China is moving quickly the launch of similar idea in the coming months,” he said.
“Libra is going to be backed mostly by dollars, and I believe that it will extend America’s financial leadership around the world, as well as our democratic values and an oversight. But if America doesn’t innovate, our financial leadership is not guaranteed.”
Waters criticizes Facebook’s failures to comply with existing diversity and security framework, ultimately questioning whether action should be taken against the company to stop it.
She said Facebook failed to release its diversity statistics in the past, and that it was sued by the National Fair Housing Alliance for enabling advertisers to engage in discrimination through algorithms on the platform.
“All of these problems I’ve outlined, and given the scope and the size and reach [Facebook has] it should be clear, while we have serious concerns about your plans to establish a global digital currency that will challenge the US dollar and back, we have also opened up a serious discussion about whether Facebook should be broken up,” she said.
Maxine Waters hits the ground running, listing to Zuckerberg the litany of concerns she and other Congress members have regarding Libra.
Plans to create a digital currency have caused many concerns “relating to privacy, trading risks, national security, monetary policy, and the stability of the global financial system,” she said.
“I and other Democrats have called for a moratorium on Facebook’s development of this digital currency Libra and digital wallet Libra until Congress can examine the issues associated with a big tech company developing these digital products, and take action,” she said.
Facebook hearing begins with Representative Maxine Waters
Good morning, Kari Paul in San Francisco here, covering today’s hearing, An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.
The hearing will start with opening statements from Representative Maxine Waters, more details to come.