Watch the live video of Mark Zuckerberg testifying before the House Financial Services Committee and answering questions about Facebook Libra.
October 23, 2019, | AtoZ Markets – In a much-anticipated meeting of politics and technology, Mark Zuckerberg, the social media giant’s founder, and CEO has finally appeared before the United States lawmakers.
He is now testifying before the House Financial Services Committee on Facebook Libra that now awaits approval. The planned stablecoin has been the subject of much controversy since it’s June whitepaper.
Disclaimer: This article will continue to be updated live for the duration of the Oct. 23 hearing. Please refresh for the latest from the hearing.
15:14 – Facebook Libra hearing begins with Representative Maxine Waters
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.
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.
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 a 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.”
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.”
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.”
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.”
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 it’s a risky project and there’s been a lot of scrutinies,” Zuckerberg said of the departures.
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.
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.
16:18 – Anti-vaccine content on Facebook enters the discussion
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 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.
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.
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.
17:47 – Republican compares Zuckerberg to Trump: ‘You both challenge the status quo’
Republican congressman Ted Budd of North Carolina takes his time on the floor to note that Libra is not technically a cryptocurrency, but a stablecoin, meaning it is not independently built on its own technology like Bitcoin and Ethereum but is tied to existing currencies like the dollar. He asks how Zuckerberg plans to allow regulation of the currency.
“If we’re to remain a world leader in financial technology, it’s vital that we don’t embrace reactionary laws against cryptocurrencies.”
The hearings are diverging from the topic of Libra and cryptocurrencies as many Congress members take the rare opportunity to question Zuckerberg on the Hill about other issues.
Rashida Tlaib says she is speaking to Zuckerberg both as a Congresswoman and “as the mother raising two Muslim boys during what is a pretty dark time in our world” and asks why he is letting hate groups use Facebook events pages to organize.
“I think we could do more and do a better job here,” Zuckerberg said. “We aren’t perfect, and we make a lot of mistakes.”
Recess and return
The hearing is on a recess right now as members head to the House floor for a vote. Stay tuned …
The hearing is back from recess, and Zuckerberg is still in the hot seat.
Representatives are continuing to ask questions broad in scope, straying from the focus of cryptocurrency Libra.
Cindy Axne of Iowa asked the executive how he plans to prevent election interference on the platform, especially in swing states like hers.
She questioned how Americans can opt-out of Facebook tracking when the company collects data on people who have no Facebook account.
“My understanding is not that we build profiles for people who are not on our service,” Zuckerberg said.
However, a 2018 report from Gizmodo found Facebook uses contact information of users who may not necessarily have accounts in ad targeting. This information can be provided by people who do have Facebook accounts when the platform asks for “contacts” permissions.
Rep. Riggleman poses what he called a “thought-provoking question” to Zuckerberg. “How realistic was The Social Network?”
He joked the reason he asked the question is that he thinks a movie may be made of the ongoing saga of Facebook and “I just want to be in charge of my own casting.”
“I think your life story is impressive,” Riggleman said. “I think with ingenuity and hard work, you can aspire to dream and that is the American dream.”
Like other Congress members, Rep. Ayanna Pressley criticizes Zuckerberg for claiming he wants to launch Libra to address low-income people and the underbanked.
“Your Libra white paper finds almost two thirds of the 1.7 billion people in the world who don’t have bank accounts say it’s because they lack enough money to open one. This is not about authentication. This is not about banking costs. This is about a tsunami of hurt that millions are experiencing because of a $1.6 trillion student debt crisis, because of rising health care costs. It is about people having to use GoFundMe pages to pay medical bills. This is because of the racial and gender wealth gap. So again, you represent the power, but I don’t think you understand the pain.”
Second recess, separate vote and back to the stand
After a Zuckerberg-requested recess and the committee’s dispersal to vote on an unrelated resolution, the hearing is back in motion and moving into its sixth hour.
In his comments, Rep. Tom Emmer wanted Mark Zuckerberg to elucidate efforts to engage the broader blockchain ecosystem in Libra’s efforts. Zuckerberg put forward the shared control of the Libra Association and said he hoped that the association will work to educate the public about the industry. Cointelegraph readers and crypto fans at large will remember Emmer from the Safe Harbor for Taxpayers with Forked Assets bill.
Skeptical of Facebook’s interest in serving the unbanked, Rep. Pressley said, “You are attempting to use technology to solve what is, at the end of the day, an issue of wealth.”
Rep. Ocasio-Cortez began her questioning by quizzing Zuckerberg on Facebook’s and his knowledge of Cambridge Analytica’s use of Facebook’s data. She asked, “Do you see a potential problem here with a complete lack of fact-checking on political ads?”
Continuing the theme of Facebook’s role in the 2020 elections, Rep. Wexton was displeased with Facebook’s stated goal of managing disinformation rather than misinformation. As the congresswoman defined, misinformation is an active effort to propagandize.
Rep. Dean accused Facebook of working to form what amounts to “a shadow sovereign government.”
After plugging the introduction of the Keep Big Tech Out of Finance act, Rep. Jesús Garcia accused Zuckerberg of overreach, asking “How much wealth and power is too much for you?” Garcia ended his remarks by saying “Facebook has acquired too much power, it is too big, and we should consider breaking it up.”
Rep. Phillips described his attitude: “I am one who celebrates innovation and innovators and, frankly, wish we had more of those in Congress.” He continued to question changes in Facebook’s means of preventing foreign governments from buying political advertisements on their platform.
21:45 Closing remarks
In closing remarks, Vice-Chair San Nicolas thanked Mark Zuckerberg for his time in what turned into a marathon hearing, now over six hours long.
Chairwoman Waters also thanked Zuckerberg, while also entreating him to consider the concerns the committee expressed about Facebook’s diversity, fair housing behavior, handling of customer data and standing as a potential monopoly.