Facebook becomes more powerful even as scandals pile up

It was becoming a familiar sight on Capitol Hill. In October, Facebook CEO Mark Zuckerberg, donning a suit and tie, sat in the hot seat and answered questions from US lawmakers for hours. 

This time, Zuckerberg was grilled by the US House Committee on Financial Services about Facebook's latest venture, a cryptocurrency called Libra. Lawmakers were already angry that the company allowed hate groups to organize, facilitated child exploitation, failed to prevent breaches and allowed misleading political ads. Now, they worried, Facebook could wreak havoc on finance and they let Zuckerberg, who received a skeptical reception when he testified following the Cambridge Analytica data scandal, hear their disapproval.

"I have come to the conclusion that it would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project," Rep. Maxine Waters, a California Democrat, told the tech boss. It's a sentiment that's widely held.

Zuckerberg's appearance in Washington came during a year in which his company's already lengthy list of problems got longer. Facebook has come under fire for a controversial policy of allowing politicians to lie in political ads. Attorneys general from 47 states are investigating the social network for potentially stifling its competition. The Federal Trade Commission fined Facebook a record $5 billion for its continued privacy mishaps. A gunman used Facebook to livestream the massacre of 51 Muslim worshippers in Christchurch, New Zealand. 

Here's the thing: None of that stopped Facebook from growing. About 2.8 billion people use Facebook or its Messenger, Instagram and WhatsApp services every month, up nearly 8% from the 2.6 billion who used at least one of those services a year ago. Even as criticism climbs, Facebook is positioning itself to become more powerful. It released a new dating feature in the US, expanded its line of video chat devices, began testing a news service and doubled down on virtual reality. Even the Libra project didn't slow down. Facebook told Congress it wouldn't launch its digital coin without regulatory approval, but didn't push pause.

Watch this: Zuckerberg gets grilled on Capitol Hill

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The continued growth and continued problems have led, inevitably, to continued complaints by lawmakers, activists and celebrities. Even before the Cambridge Analytica scandal erupted in early 2018, the social network had been criticized for failing to sufficiently safeguard user privacy. As the problems piled up, public calls to check Facebook grew.

"They've grown too quickly and have been way too interested in the bottom line without worrying about the consequences," said Georgetown law professor David Vladeck, who oversaw a Facebook investigation when he led the FTC's Bureau of Consumer Protection from 2009 to 2012. "Their carelessness and lack of candor is now coming back to haunt them." 

Familiar problems

Facebook wants the public and regulators to believe it's turning over a new leaf. 

Over the past year, the social network started rolling out a long-awaited privacy tool that lets users see a summary of the apps and websites that send Facebook information about their activity. Off-Facebook activity, which took more than a year to launch, has limitations. It lets users disconnect their Facebook accounts from the third-party sharing but not delete the information that's been collected.

In a response to discriminatory ad targeting, Facebook said advertisers running housing, employment and credit ads will no longer be able to target users based on age, gender or ZIP code. It's been working to encrypt traffic on Facebook Messenger and Instagram messages so they can't be viewed by anyone other than the sender and recipient. 

Despite these steps, Facebook continues to encounter the same basket of problems, prompting its critics to wonder if the company's changes did anything. After the 2016 US presidential election, Facebook revealed that Russian trolls used the social network to sow discord among Americans. The company, which aims to "bring people closer together," has been repeatedly accused of harming democracy and allowing people to abuse its services. 

This year wasn't any different. Facebook rejected calls to pull down an altered video of House Speaker Nancy Pelosi that made it seem like she was slurring her words. Unlike YouTube, Facebook didn't remove the video but reduced its spread after fact checkers deemed it false. Zuckerberg defended the decision, but acknowledged the company could have acted more swiftly. Facebook was put on the defensive once again following outcry about it's decision not to fact-check ads from politicians, a policy that has even divided the company's leadership and employees. Facebook board member and Trump supporter Peter Thiel wants the social network to keep the current policy, but the company is weighing potential changes including limiting ad targeting, The Wall Street Journal reported on Tuesday. 

Zuckerberg has stuck to his usual talking points, defending free expression. "I don't think most people want to live in a world where you can only post things that tech companies judge to be 100% true," Zuckerberg said during a roughly 40-minute speech at Georgetown University in October.

Privacy and safety woes surrounding Facebook also didn't die down. Company contractors raised ethical concerns because they listen to and transcribe user audio clips for the social network, Bloomberg reported. Facebook didn't inform users that third parties might review their audio and ended the practice. Workers were checking the accuracy of the artificial intelligence system used to transcribe voice chats, an option for Facebook Messenger users.  A New York Times investigation found that predators were using Facebook's messaging app to create and share child sexual abuse images, sparking concerns about the company's plans to encrypt the service. A man accused of killing 51 people at two mosques in Christchurch livestreamed the massacre on Facebook, a reminder the social network's tools could be used to spread hate. 

Facebook didn't respond to a request for comment. 

Finding solutions 

As Facebook's problems continue to pile up, lawmakers and regulators are looking for ways to rein in the company's power. 

US presidential candidate Elizabeth Warren, Facebook co-founder Chris Hughes and others have called for the government to pry Instagram and WhatsApp from the social media giant. The Federal Trade Commission is investigating whether Facebook purchased its rivals to impede competition, the Journal reported. 

Facebook has pushed back against the idea, arguing that breaking up the company wouldn't solve its problems. The company also said a breakup could hinder its efforts to fight spam, election meddling and crime across all of its services.

US lawmakers have also proposed new federal privacy legislation aimed at giving consumers more control over their data. 

"There are legal challenges under current law, and the idea of getting new laws passed depends on getting past current political logjams," said Harry First, a law professor at New York University. "One thing that you do see is a fairly bipartisan agreement that something should be done."

Zuckerberg has said the company isn't opposed to regulation. In an op-ed published in The Washington Post this year, he called for government and regulators to play a "more active role" when it comes to harmful content, election integrity, privacy and data portability.

Congress has been wary about passing privacy legislation in the past because of concerns it might get in the way of innovation, said Vladeck, the Georgetown law professor.

"They were worried about disrupting what was then thought to be the most vibrant part of our economy," he said. "While some of the bloom is off the rose, those concerns persist."

Originally published Dec. 17, 5 a.m. PT
Update, 1:08 p.m.: Adds more background about political ads.