Zuckerberg's appearance before Congress next week a pivotal moment for Silicon Valley

9 April 2018 5:01pm
Silicon Valley Sign

6 April 2018. By Mike Swift and Amy Miller.

Starting Monday, the day before Facebook CEO Mark Zuckerberg sits down before a joint Senate panel, millions of Facebook users will see their news feeds changed to display the third-party apps linked to their accounts.

Along with the mea culpas that Zuckerberg and Chief Operating Officer Sheryl Sandberg issued to the press this week about the improper sharing by one of those apps of up to 87 million Facebook users’ personal data with Cambridge Analytica, the news feed changes are two key steps by Facebook to regain control not only of its data, but also of its image.

Zuckerberg’s testimony on Tuesday and Wednesday before Congress will be the third and potentially most consequential push for Facebook. But it will also be critical for other Internet giants such as Google and thousands of lesser-known media and advertising companies, which face increased risk of tighter privacy regulation, particularly if Zuckerberg stumbles next week.

The Cambridge Analytica scandal appears increasingly likely to affect the entire Internet industry — the question is how. It could lead to new powers for the US Federal Trade Commission, or transparency rules for thousands of companies that collect and trade in personal data. So much is up in the air now, but changes appear more likely as users pressure lawmakers for change.

Zuckerberg, for one, sounded both confident and contrite when he spoke to MLex and many other news organizations during a telephone briefing on Wednesday. “I started this place. I run it. I’m the one responsible for what happens here,” he told reporters.

“I’m not looking to throw anybody else under the bus for the mistakes we’ve made here.”

Significant moment

Zuckerberg’s testimony promises to be the most significant congressional appearance by a Silicon Valley chief since Eric Schmidt, then Google’s executive chairman, memorably told the Senate Judiciary committee in 2011 that in search, “competition is only one click away.”

Google sidestepped that dart when the FTC decided at the end of the following year to end an antitrust probe. But now the topic is privacy, a thornier problem for which Zuckerberg cannot glibly assert that an easy solution is just a click away.

From President Donald Trump’s Twitter assaults on Amazon to wonky law professor debates about whether the US needs to revise how it regulates dominant tech platforms, a wave has been building that some in Silicon Valley are calling the “Techlash.”

That is particularly true in privacy and data security, where a succession of bombshell data breaches and privacy leaks — Yahoo, Equifax, Uber Technologies and now Facebook — have rattled consumers and grabbed the attention of lawmakers.

Meanwhile, the growing awareness in the US of Europe’s forthcoming General Data Protection Regulation has even some conservative lawmakers questioning whether the US needs specific privacy rules — certainly not to imitate Europe, perish the thought — but to rein in the excesses of what some call “surveillance capitalism.”

"I certainly hope that this is a moment for change," Terrell McSweeny, a member of the FTC, said Thursday.

Zuckerberg is certain to face intense questioning on Tuesday from privacy hawks such as Senator Richard Blumenthal of Connecticut and Senator Ed Markey of Massachusetts, two Democrats on the Judiciary Committee.

They will see Zuckerberg as a proxy for an entire data collection industry that has grown up to profile consumers and target digital advertising over the past 20 years. Blumenthal, in TV interviews since the Cambridge Analytica news broke March 16, has called for the CEOs of “other companies in the space” to testify before Congress. The former state attorney general and consumer protection zealot said the Cambridge Analytica mess is proof that “new laws may be necessary.”

That is not surprising given that Blumenthal and other Democratic senators have proposed new privacy bills in recent months. But there is another angle to the Cambridge Analytica debacle that makes it of intense interest to every member of Congress — it involves the process of getting elected.

Double-edge sword

The Cambridge Analytica breach affected as many as 70 million users in the US, and more than 1 million users in the UK, the Philippines and Indonesia, as well as more than a half-million in Mexico, Canada and India, according to Facebook. As a result, the company is now facing new probes in Indonesia and Australia.

US politicians in recent elections have grown increasingly dependent on Facebook’s ability to micro-target voters, the same capability exploited by Russia’s Internet Research Agency to direct inflammatory political content that Facebook has said reached 126 million US users during the 2016 elections. While its importance to politicians might have provided Facebook regulatory cover in the past, it is now proving to be a double-edged sword.

Zuckerberg and Sandberg said Facebook this week took down about 270 pages and accounts that were controlled by the Russian IRA. “We now have about 15,000 people working on security and content review, and we’ll have more than 20,000 by the end of the year,” Zuckerberg told reporters. He has even endorsed some form of regulation for Facebook.

“Overall, I think regulations like the GDPR are very positive,” Zuckerberg told reporters this week.

Facebook's explanations and continued changes, so far, are good, observers say. But they aren't likely to be enough to save it, and probably other companies, from adopting significant privacy changes going forward.

Zuckerberg’s turn in the lights has the feeling of a pivotal moment that will be watched intently across Silicon Valley. The 32-year-old CEO can sometimes sound brittle and abstract when he's confronted with tough questions. He has yet to demonstrate the suave, knowledgeable fluidity that allowed Schmidt to parry the antitrust challenges from Blumenthal and other senators back in 2011.

But whatever he says, and however deftly he says it, events may have outrun the ability of the man who has become the face of Silicon Valley to block change.

“If there’s ever going to be an opportunity to reset the popular Internet we’ve built,” Gennie Gebhart of the Electronic Frontier Foundation told MLex, “it’s going to be now.”

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