Mark Zuckerberg — perhaps chastened, but definitely poorer — faces a restive Congress this week in the midst of the biggest public relations crisis in the history of the tech giant.
The Facebook chief executive officer’s stake in the company he founded shrunk by hundreds of millions of dollars in the wake of the disclosure that Cambridge Analytica, a British consulting firm linked to President Trump’s 2016 campaign, had improperly accessed data on about 87 million users. The fallout wasn’t only financial; there have been complaints from individual users and snubs from companies as disparate as electric car maker Tesla and adult entertainment firm Playboy Enterprises.
Initially silent on the matter, Zuckerberg has been working to regain the trust of users with improved safeguards for their personal information while cooperating with an investigation by the Federal Trade Commission, the agency that negotiated the company’s settlement over privacy issues seven years ago.
“I started Facebook, and at the end of the day I’m responsible for what happens on our platform,” Zuckerberg said in a post on the platform. “I’m serious about doing what it takes to protect our community.”
The Harvard dropout’s performance during an April 11 hearing before the House Energy and Commerce Committee has the potential to reshape the narrative on Facebook for the better, though that outcome is far from a given amid data-safety concerns heightened by a massive hack of credit bureau Equifax last year and a more recent cyberattack on retailers Saks & Co. and Lord & Taylor.
U.S. Reps. Greg Walden, the energy and commerce chair, and Frank Pallone Jr., the highest-ranking Democrat, said in a letter to Zuckerberg that the hearing will focus primarily on the harvesting and sale of personal information from millions of Facebook users, potentially without their knowledge or consent, as well as the evolution of the platform’s policies from its founding through the present.
“As the chief executive officer of Facebook and the employee who has been the leader of Facebook through all the key strategic decisions since its launch, you are the right person to testify before Congress about those decisions and the Facebook business model,” they wrote.
Zuckerberg is also likely to get pointed queries from Democrats still salty over Hillary Clinton’s loss in 2016 about phony news articles on the site that were used to influence elections around the globe.
Still, the measures that Facebook has taken already, from doubling its data-security staff and tightening the procedures for third-party apps to access information about users and their network, may help the CEO with a Republican-controlled Congress more interested in the company regulating itself than in passing new laws that would apply to the industry as a whole.
“We don’t see sweeping new U.S. policies around privacy/antitrust/transparency due to congressional dysfunction and Republican reluctance to pass a Facebook-driven bill that could be read as undercutting Trump’s 2016 victory,” said Paul Gallant, an analyst with Cowen Washington Research Group, which has tracked federal policy for four decades. “Whether this outlook holds depends on upcoming hearings and any future revelations around the Internet platforms — especially potential foreign influence in the 2018 midterms.”
The social media giant, whose digital platform is used by more than 1 billion people a day, said Cambridge Analytica and its parent Strategic Communications Laboratories were suspended after Facebook learned that the companies may not have deleted data improperly shared by Dr. Aleksandr Kogan, a University of Cambridge psychology professor who obtained it through his app, “thisisyourdigitallife,” which used Facebook Login.
About 270,000 people downloaded the app, advertised as a research tool used by psychologists, giving their consent for Kogan to access information such as their location, content they had liked, and limited data on friends whose privacy settings allowed access, Facebook said.
Although Kogan obtained the information legitimately, using the same techniques as other app developers on Facebook at the time, Facebook said he violated the company’s policies by sharing it with SCL, Cambridge Analytica, and Christopher Wylie, a one-time Cambridge employee who exposed what had happened. Wylie has said Cambridge used such information to manipulate voters by targeting their “inner demons.”
Cambridge Analytica, which was paid $5.9 million by the Trump campaign in the 2016 election and nearly that amount by the campaign of his Republican primary rival Ted Cruz, has said it complies with all Facebook’s rules and is working with the company to resolve its concerns as quickly as possible.
Cambridge CEO Alexander Nix was suspended by the company’s board in late March after he was recorded telling an undercover reporter for BBC Channel 4 that the firm had expertise in using tapes of sexual encounters and too-good-to-be-true offers to damage politicians.
The “drumbeat of negative news and headlines increases the risk that there is some user backlash and a negative feedback loop,” Morgan Stanley analyst Brian Nowak said. “This increases the chance that users become more hesitant to give Facebook their data and/or use Facebook as frequently.”
Through early April, the scandal cost the company’s stock about 16 percent of its value, and a rally will require investors getting enough information on Facebook’s relationship with Cambridge Analytica to gauge any potential liability, said Shawn Quigg, a strategist with JPMorgan Chase.
