Congress, Facebook Nailing Down Zuckerberg Appearance
A source at Facebook said Tuesday the company is in touch with lawmakers but wouldn't confirm that CEO Mark Zuckerberg agreed to testify before Congress, as reported by multiple outlets after the Cambridge Analytica controversy.
Zuckerberg received invitations from the Senate Commerce and Judiciary Committees and the House Commerce Committee. Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, invited Zuckerberg, Google CEO Sundar Pichai and Twitter CEO Jack Dorsey to an April 10 hearing (see 1803260041) on consumer data protection.
House Commerce Committee spokeswoman Elena Hernandez addressed “incorrect” reports that Zuckerberg agreed to appear before the committee. “The committee is continuing to work with Facebook to determine a day and time for Mr. Zuckerberg to testify,” Hernandez said in a statement. Offices for the Senate Commerce and Judiciary committees didn't offer updates on potential testimony from Zuckerberg.
FTC acting Chief Technologist Neil Chilson said Tuesday the agency is looking at the case “diligently,” and taking the allegations against Facebook and Cambridge Analytica “very seriously.” Cambridge Analytica allegedly misused the private information of as many as 50 million Americans for political purposes, according to reports. During a webinar hosted by USTelecom, Chilson noted a recent statement from acting Director of the FTC Bureau of Consumer Protection Tom Pahl (see 1803260039). Pahl confirmed the agency opened a nonpublic investigation into potential privacy practice violations at Facebook. “I can’t say much more than that,” Chilson said. “We’re looking at Facebook’s practices both under its 2011 order with the FTC and also under the general FTC laws, Section 5 requirements, that all companies must follow.”
The FTC issued a consent decree for Facebook in 2011 stemming from charges Facebook deceived consumers by sharing user information publicly that the platform had promised to keep private. R Street Institute Technology Policy Manager Tom Struble said the situation will get only worse if Zuckerberg dodges Congress for an extended period of time. “I think we will probably see him come and testify before at least one, if not multiple congressional committees on this,” Struble said. Zuckerberg is “better off just facing the music and taking his lumps and moving on.”
Digital Citizens Alliance Executive Director Tom Galvin said it’s not necessarily the mistakes that define a business but the response to them, calling Facebook’s initial response to the scandal weak. Zuckerberg waited days after the news broke before issuing his first public comments (see 1803210058). “That puts extra pressure on Zuckerberg to take a personal responsibility to try to reassure users and policymakers that he’s on top of this and he’ll get it fixed,” Galvin said. “And to do that I think that takes personal involvement on his part, including testifying before Congress.”
Without directly referencing the Facebook probe, Chilson spoke generally about the agency’s process for determining consumer injury in a case. The relevant consumer injury standards are the unfairness standard and the deception standard. The unfairness standard requires substantial injury that isn't avoidable by the consumer and isn't outweighed by benefits to consumers or competition. The deception standard requires that a statement to a consumer be “material,” meaning the statement affected the consumer’s behavior or decision. In most cases consumer injury is pretty easy to determine, he said.
Struble said the 2011 consent decree will be critical for the Facebook-Cambridge Analytica probe, specifically what Facebook promised in that agreement, if the platform lived up to its promises and what mechanisms were in place to prevent the alleged misuse by Cambridge Analytica and Cambridge University researcher Aleksandr Kogan. “It’s going to hinge on what Facebook promised to do in terms of verifying third-party use of data, and second, what it actually did, with regards to Kogan and Cambridge Analytica,” Struble said. Even if Facebook were defrauded by Cambridge Analytica, it still could be on the hook for FTC violations, Struble said. Penalties could range from $10,000 to $40,000 per violation per day, which could theoretically amount to fines in the trillion dollar range, Struble said.