US lawmakers don’t trust Facebook’s Libra They say Facebook has a “pattern of failing to keep consumer data private.” Mark Zuckerberg, Facebook’s founder and CEO, has faced six hours of questioning from the US House Committee on Financial Services about the company’s cryptocurrency project Libra.
The committee’s chairwoman, Democrat Representative Maxine Walters, commenced the hearing with strong words, saying the Libra project “has opened up a serious discussion about whether Facebook should be broken up”, suggesting for policymakers to open discussions into doing so.
She also reiterated that Facebook should concentrate on addressing its “many existing deficiencies and failures” before it continues work on the Libra project, listing various issues around diversity and inclusion, fair housing, competition and fairness, protecting consumers, election, and political speech.
Zuckerberg told the committee that Facebook had made mistakes and that it was “not the ideal messenger right now”, but that the past should not prevent the launch of Libra.
“We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook putting this idea forward,” he said.
Walters’ opening statement set the tone for the hearing, as Zuckerberg faced a litany of questions that touched on topics beyond the cryptocurrency project, spanning from political advertising and disinformation campaigns to online child pornography and hate groups.
In terms of the Libra project however, Republican Representative Patrick McHenry asked why Facebook had made the decision to not implement an integrated payment platform, like WeChat Pay and Alipay, into its social media platform.
Zuckerberg responded by saying that the financial infrastructure in the US was outdated, and that the Libra project would promote financial inclusion “through a safe, low-cost, and efficient way of sending and receiving payments around the world”.
He also reiterated that the Libra project would not launch unless it had full support from US regulators, and in the event that it did launch without US approval, Facebook would leave the Libra Association.
But some congresspeople during the hearing were skeptical of Zuckerberg’s assertion, with Nydia Velasquez, a Democrat, pointing to the social network’s decision to merge the data between WhatsApp and Facebook despite promising to keep the apps separate back in 2014.
Facebook’s CEO was also questioned about the recent departures of financial partners including Mastercard, Visa, PayPal, and eBay from the Libra Association, with Republican Representative Ann Wagner saying: “You’ve lost these stable partners and I find it highly concerning.”
While not providing specific reasons for their exits, Zuckerberg acknowledged that Libra is a “risky project” but that there were still other payment processing companies within the Libra Association who would help build a compliance regime for the cryptocurrency project.
Democratic Representative Brad Sherman, meanwhile, called for the Libra project to be paused, expressing fears over its potential to aid money laundering, and upend the global financial and political system.
“The US dollar is an excellent currency as a means of account as it serves ‘all of the needs’ except it’s really bad for tax evaders, drug dealers, and terrorists, and that unmet need can be met by a new currency,” he said.
“Those who are introducing cryptocurrency have got to pause and wonder what effect they’ll have on the power of the United States to impose sanctions.Right now, Turkey is stopping at 20 miles from Syria, not because of US troops, but because of US sanctions and the role of the US dollar.We stand to lose all of that because the cryptocurrency is for the crypto patriot.”
See also: Mastercard, Visa, eBay, Stripe drop out of Facebook’s Libra project
And despite the committee hearing being about Facebook’s crytocurrency project, questioning commenced with Walters grilling Zuckerberg about Facebook’s decision to avoid vetting political advertising , saying the impact of the company’s move would be “a massive voter suppression effort.[Facebook’s] claim to promote freedom of speech does not ring true”.
After being repeatedly asked about Facebook’s fact-checking policy, Zuckerberg then confirmed that the social network does not fact-check political ads itself, but contracts a third party to perform the work.
One of the fact-checkers contracted by Facebook is the Daily Caller, a company that is “well-documented with ties to white supremacists”, Democrat Representative Alexandria Ocasio-Cortez said during the hearing.
On the child pornography front, Wagner said she was troubled by the amount of abhorrent content that goes through the social media platform, telling the committee that 16.8 million of the 18.4 million child sexual abuse material reported to US authorities were located on Facebook.She also touched on the drawbacks of Zuckerberg’s end-to-end encryption proposal.
“I strongly believe what is illegal offline should be illegal online: 16.8 million of the 18.4 million child sexual abuse material are on Facebook …these are absolutely shocking numbers,” she stated.
“Moreover, it’s estimated that 70% of Facebook’s valuable reporting to NitBut on missing and child-exploited reporting would be lost if Facebook implements its end-to-end encryption proposal.”
The United States, the United Kingdom, and Australia at the start of this month joined together to request that Facebook delay its plans to implement end-to-end encryption across its messaging services, citing that encryption would impede government officials from investigating possible crimes.
Democrat Representative Rashida Tlaib also criticised Zuckerberg about Facebook’s content-filtering practices, saying hate-mongering was still widespread across the platform.
During the hearing, Tlaib put on record an image of a “white supremacist” bearing arms in front of a mosque that was shared on Facebook despite its bans against such content .
Zuckerberg again acknowledged that “[Facebook is] not perfect, we make a lot of mistakes” before stating that over 100 billion pieces of content are shared daily on the social media platform.
“Even if we make mistakes on a relatively small percent, that’s still a lot of mistakes.And in both directions, things that we take down that shouldn’t be taken down and things that we missed that we leave up that we should have gotten to, this is a constant effort to do better,” Zuckerberg said.
Facebook is currently the subject of various federal antitrust investigations, with the Libra project simply being one of many areas of concern for US regulatory authorities.
Facebook has already been fined $5 billion by the FTC for privacy violations and earlier this week , New York Attorney General Letitia James announced that 46 other state attorney generals have joined her state-level antitrust investigation into Facebook’s conduct.
In June, the House Judiciary Committee launched an antitrust investigation of Facebook, Google, and other tech companies.The US Department of Justice (DOJ) in July also launched a sweeping antitrust review into the industry’s competitive conditions.The Federal Trade Commission (FTC) and the DOJ are also both reportedly investigating Facebook over antitrust concerns .
Regulatory progress for the cryptocurrency project has been slow, and US lawmakers have not budged from their initial opposition against Libra despite it being unveiled back in June.
When Libra was announced, Facebook said it planned for the cryptocurrency project to be launched sometime next year .
Related Coverage Singapore amongst currencies Facebook wants tied to Libra Facebook’s cryptocurrency plans make Mastercard, Visa, Libra backers nervous France will attempt to block Facebook’s Libra cryptocurrency on European soil Regulators from Australia, Canada, UK hit Facebook with Libra privacy concerns US lawmakers troubled by Facebook’s Libra due to ‘pattern of failing to keep consumer data private’ House Democrats issue letter to Facebook to halt Libra project.
