Congress isn't ready to regulate Facebook, but it wants to
Facebook's CEO was told testifying before Congress was a make-or-break moment. While he escaped unscathed, Congress still wants to act.
- Named a Tech Media Trailblazer by the Consumer Technology Association in 2019, a winner of SPJ NorCal's Excellence in Journalism Awards in 2022 and has three times been a finalist in the LA Press Club's National Arts & Entertainment Journalism Awards.
Mark Zuckerberg walked into the Senate a tense man. It didn't take long for him to relax.
The Facebook CEO had been summoned to Washington after The New York Times and The Guardian's Observer newspaper reported a political consultancy had improperly accessed the personal data of about 87 million Facebook users. The consultancy, Cambridge Analytica, was affiliated with the Trump campaign, and that raised questions about whether the 33-year-old billionaire's social network had been used to manipulate voters. Worse, Facebook had known about the data leak three years ago but hadn't bothered to tell anyone.
Any tension Zuckerberg carried, however, disappeared halfway into his five-hour appearance before members of the Senate Judiciary Committee and Senate Commerce Committee. His shoulders -- stiff as the hearing began -- hung looser. The deer-in-headlights expression that had been frozen on his face melted into occasional smiles. That's because Zuck, who traded in his t-shirt and jeans for a smart suit, had prepared for far worse.
One senator asked how Facebook made money, a process obvious to anyone who's used its services. Another asked Zuckerberg whether Twitter was "the same as what you do."
As the first break in the proceedings approached, Zuckerberg's confidence was on full display.
"That was pretty good," he told the chairman and assembled senators to chuckles.
Zuckerberg's trip from Silicon Valley to the halls of Congress was evidence, as if any were needed, that Washington changes slowly. Plenty of people expected legislators would use the social network's latest misstep as a reason to slap some laws on the tech industry or at least threaten to. Instead, the Senate showed it still didn't quite get the internet, a reputation that's persisted since the late Ted Stevens called it a "series of tubes" more than a decade ago.
A day later, members of the House Energy and Commerce Committee asked smarter questions. But representatives still tripped over partisan politics, with five members using their time to discuss conservative bloggers Diamond and Silk, rather than their constituents' privacy. And a couple of others expressed concern that Facebook had given preferential treatment to the Trump campaign.
"They made a really good case for not regulating social media very much," said Betsy Page Sigman, a business professor at Georgetown University.
After all, how can Congress hope to write rules for something it barely understands?
For three decades, Silicon Valley has more or less escaped regulation as the government looked to nurture a new industry. The information age was ushering in jobs up and down the economy. And it wasn't just about selling nifty gadgets, either. The internet brought another boom, with Google, Netflix and Facebook needing engineers and coders to build search engines, email programs and video streaming used by billions of people.
The spillover created jobs in the rest of the country, too. Demand for all those services meant AT&T and Comcast hired people to run fiber-optic cable into as many homes as they could. Eventually it meant wireless companies would become the new kings of industry, giving life to always-connected devices in our pockets while Best Buy and Apple Stores became cultural icons.
Who wanted to mess with that?
Mark Zuckerberg's hearings on Capitol Hill were billed as a monumental showdown. They became something else entirely.
Sometimes over the line
The tech industry's growth was in a straight line, of course. Once in a while, the government would poke its nose in, usually concerned someone was on the cusp of a monopoly. In 2002, the Department of Justice accused Microsoft of cementing its dominance over internet browsers by bundling its Internet Explorer software with its Windows software for PCs. A decade later, the government successfully sued Apple for conspiring with book publishers in attempts to unseat Amazon as the king of e-books. Google was dinged in three consecutive years -- 2011, 2012 and 2013 -- for failing to protect privacy and for unfair competitive practices.
Even Facebook had to settle with the Federal Trade Commission in 2011 for breaking its promise to keep user data private.
Still, if you operated in Silicon Valley, it wasn't likely that fear of government regulation kept you up at night. Lawmakers, more or less, kept their hands off.
Now that's changing. Data breaches -- remember Equifax? -- have people worried their most sensitive information is floating around the dark web to be bought and sold. Terrorists increasingly use technology to communicate with one another, spread their message and find new recruits.
Perhaps worst of all, intelligence agencies found evidence that Russian propagandists had hijacked Facebook, Twitter and Google to use our data in targeting messages designed to influence the 2016 US presidential election.
The technology in our pockets and in our homes was suddenly threatening our democracy.
For better or worse, Zuckerberg has become a proxy for all those concerns. Whether informed or not, politicians, pundits and academics refer to Facebook as a prime example of Big Tech's missteps, and a boogyman of what could come if it's not reigned in.
During more than 10 hours of testimony in hearings that stretched over two days, the members of Congress hammered on privacy. How was Facebook protecting user data? What was it doing differently after failing to protect the personal information of millions of people? Were there more scandals waiting around the corner? And who'll take responsibility if there are?
"The days of the wild wild west that we've lived through for the last few years cannot continue," said Virginia Sen. Mark Warner, in an interview. " This is a problem that's not going to go away."
Not entirely out of the woods
Congressional meddling may not be an immediate threat to Silicon Valley, but the FTC likely will be.
Even though Congress clearly needs to spend some time doing its homework, Facebook still faces threats from other parts of the government.
The FTC is investigating the social network over concerns its arrangement with Cambridge Analytica -- which Zuckberg has called a "big mistake" -- may have violated that 2011 consent decree.
If the FTC finds Facebook violated the decree, the social networking company could face fines of $40,000 a day since Nov. 29, 2011, when it signed the decree. During his testimony to , Zuckerberg said Facebook didn't notify the FTC about the Cambridge Analytica data leak at the time it found out about that incident, because it had been assured the data had been deleted. "We considered it a closed case," Zuckerberg said.
Silicon Valley should expect more oversight from Washington, too. After all, if Mark Zuckerberg can be dragged to the nation's capital, so can other tech CEOs.
"When Zuckerberg is forced to get rid of the hoodie and put on a suit and tie and sit in Congress for two days, I'm sure that all the tech CEOs saw it and took notice of it," said Bradley Tusk, a regulatory adviser for tech companies. "When there's a potential regulatory political problem on the horizon, they'll take it more seriously."
More transparency regarding practices and business models could help tech companies calm Congress's regulatory zeal, says Rahul Telang, professor of information systems and management at Carnegie Mellon University.
If companies are able to show they've learned from these privacy scandals and are more careful with user's data, Congress won't be as tempted to "to rock their boat," Telang added.
Already, it's evident that's just what legislators want to do. A day after Zuckerberg finished his testimony, a pair of senators introduced a bill that would give Americans the right to see what information has been collected about them online and keep it private by disabling data tracking. It would also require companies to notify people within 72 hours if their data has been affected by a breach.
Lawmakers are also considering the Honest Ads Act, co-sponsored by Sen. Warner and supported by both Facebook and Twitter, which would mandate more transparency in online political advertisements.
Meanwhile, members of Congress say they intend to call other tech execs to their committees just like Zuckerberg.
"I would encourage companies to reach out and establish a relationship and be proactive on the issues that they should be on notice now, or are coming up, likely to come up, or go away," Rep. Adam Schiff said in an interview shortly after Zuckerberg's two days of testimony finished. "You know, the discomfort with having to interact with the federal government or with Congress, people are just going to have to get past."
If that's the case, Zuckerberg and the rest of the tech industry might not have much to be relaxed about for long.
First published April 17 at 5:00 a.m. PT.
Updated at April 18 at 9:31 a.m. PT: Adds additional background.
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