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Questions to Mark Zuckerberg show many senators don't get Facebook

Tuesday's five-hour hearing highlighted one thing: Relatively few US senators understand Facebook's business.

Facebook CEO Mark Zuckerberg Testifies At Joint Senate Commerce/Judiciary Hearing

Facebook CEO Mark Zuckerberg looks a lot happier leaving the Senate hearing than he did arriving. 

Getty Images

Facebook CEO Mark Zuckerberg started his testimony Tuesday in Washington looking worried. But he walked away from his first day of congressional hearings looking pretty confident.

That's because many of the questions came from tech-challenged senators who seemed clueless about how Facebook makes its money and how the internet works.

"If [a version of Facebook will always be free], how do you sustain a business model in which users don't pay for your service?" Sen. Orrin Hatch, the 84-year-old Republican from Utah, asked early on in the five-hour hearing.

Zuckerberg paused a moment before saying, "Senator, we run ads." He, and his staff sitting behind him, then grinned before Hatch moved onto this next question.

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Team Facebook looked pleased because Hatch's question, like those from many of the senator's peers, showed a lack of basic understanding about how Facebook operates. The world's largest social network, which currently is free for all users, generated nearly $13 billion in revenue during the last three months of 2017. That money came from ads directed at the site's 2.2 billion users, with the ads targeted based on what Facebook knows about you.

Facebook is a large, often secretive company that many in tech -- not to mention regular consumers -- have difficulty understanding. But Congress has toyed with the idea of regulating Facebook and other social media networks. If it doesn't understand how they actually work, it may be harder for Congress to develop laws that adequately protect consumers and prevent something like the Cambridge Analytica scandal from happening again.

"A lot of these members frankly aren't on social media and maybe don't have experience with social media," said James Norton, a former deputy assistant undersecretary at the Department of Homeland Security under President George W. Bush. "You need to experience the platform to understand what you're talking about if you do want to challenge the validity of what the company's doing."'

Facebook's shares jumped 4.5 percent to $165.04 during the testimony, their highest point since March 21 (the week after the Cambridge Analytica news broke).

Many on Twitter agreed that Zuckerberg didn't quite get the tough grilling that was expected. (At one point well into the proceedings, Zuckerberg himself told the Senate committee he wasn't ready for a break and asked to keep going.) Instead of Twitter being outraged over Zuckerberg's statements, many lamented how little US legislators seemed to understand. 

Mark Zuckerberg goes to Washington

Zuckerberg took the hot seat Tuesday -- and will testify again Wednesday -- to account for data privacy lapses at the company he started 14 years ago in his Harvard dorm room.

In 2013, personal info from about 300,000 users was originally collected for a personality quiz app called This is Your Digital Life, designed by Aleksandr Kogan, a Cambridge University researcher. Because of how Facebook worked at the time, Kogan was able to collect data from the quiz takers' friends -- up to 87 million of them -- and share the information with Cambridge Analytica. The UK-based data analytics firm then may have used the data to help the Trump campaign during the 2016 presidential election.

Congress wants answers about how that happened and what Facebook is doing to prevent something like the scandal from happening again. But that doesn't mean they entirely understand the questions they're asking -- or even the answers they're getting from Zuckerberg.

"Listening to these senators ask these questions is very frustrating, because they don't understand the technology, and they don't understand how Facebook really works," said Creative Strategies analyst Tim Bajarin. "They don't even understand how the advertising industry works."

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Part of the problem simply may be age. Most of Facebook's users are younger than America's senators. The average age of the 100 US senators is 63, according to congressional database LegiStorm. Zuckerberg is 33. As of January, only 21 percent of Facebook's US users were 55 or older, according to Statista. Nearly half were younger than 35 years old. When Facebook got started for college students in 2004, those senators weren't the target audience.

Still, a Wall Street Journal analysis found that many of the Senate's older members post on Facebook as much as their younger peers. For instance, Sen. Ed Markey, a 71-year-old Democrat from Massachusetts, published 628 posts over the past year, the Journal reported. That's nearly as many as Sen. Cory Booker, the 48-year-old Democrat from New Jersey.

Repetition and confusion

On Tuesday, many senators started with carefully crafted questions but then were unable to offer logical followups. A few asked the same questions as their predecessors, including whether users actually understand the terms of service for the site and what information Facebook distributes to advertisers.

"Have you ever drawn the line on selling data to an advertiser?" asked Dean Heller, a Republican from Nevada, after Zuckerberg earlier noted that Facebook doesn't sell data to advertisers. (FYI, Facebook places ads in users' feeds based on who the advertiser is targeting.)

Sen. Deb Fischer, a Republican from Nebraska, confused Zuckerberg with her line of questions, asking "how many data categories" Facebook stores.

"How many data categories do you store, does Facebook store, on the categories that you collect?" she asked. "How much? All of it? Everything we click on? Is that in storage somewhere?"

Zuckerberg said Facebook does store data but used Fischer's lack of knowledge to avoid really answering the question.

Fischer later remarked that "we all know" that Facebook's user size -- 2.2 billion -- is "larger than the population of most countries." No countries have that many citizens. China and India are both estimated to have about 1.4 billion people apiece. The US has a population of about 326 million.

Then there was confusion about how Facebook differs from other social networks.

"Is Twitter the same as what you do?" asked Lindsey Graham, a Republican representing South Carolina. He also asked Zuckerberg which companies could essentially replace Facebook in people's lives.

"Let me put it this way," Graham said. "If I buy a Ford, and it doesn't work well, and I don't like it, I can buy a Chevy. If I'm upset with Facebook, what's the equivalent product that I can go sign up for?"

And then there was confusion about technology in general.

"From the moment that we wake up in the morning, until we go to bed, we're on those handheld tablets," Bill Nelson, a Democratic senator from Florida, said during his opening remarks. We think he meant "smartphones." (Nearly everyone in the US who wants a smartphone has one, but only roughly half of Americans own a tablet, according to Pew.)

Pipes?

Others couldn't follow what Zuckerberg was saying. Sen. Roger Wicker, a Republican from Mississippi, seemed to have gotten lost during Zuckerberg's explanation of how internet service providers (which Facebook's CEO called the the "pipes" of the internet) are different from platform providers like Facebook.

"When you -- when you say 'pipes,' you mean…" Wicker asked. Zuckerberg said he meant ISPs.

And there was Sen. Ted Cruz, a Republican from Texas, who veered off the hearing's topic -- user data and privacy -- and spent his time accusing Facebook of being biased against conservatives.

"Do you consider yourself a neutral public forum, or are you engaged in political speech, which is your right under the First Amendment?" Cruz asked several times before listing examples of conservative pages Facebook has blocked. He also asked why Facebook fired Palmer Luckey, the creator of the Oculus VR business who funded a secret anti-Hillary Clinton campaign.

Zuckerberg called Luckey's departure a "personnel issue" that would be "inappropriate" to address, but he added that it wasn't because of Luckey's politics. The Guardian reported in 2015 that Cruz used Cambridge Analytica data to help his presidential campaign. 

Even senators known as the more tech savvy of the bunch experienced hiccups. Sen. Brian Schatz, a Democrat from Hawaii, asked if Facebook could track what one user emails another on WhatsApp. WhatsApp is the encrypted messaging service -- which doesn't use email -- that Facebook bought in 2014.

He also asked Zuckerberg several times if messages sent on WhatsApp can be used to target ads. "Is there some algorithm that spits out some information to your ad platform, and then let's say I'm emailing about 'Black Panther' within WhatsApp, do I get a WhatsApp -- do I get a 'Black Panther' banner ad?" Schatz asked.

Each time, Zuckerberg responded that WhatsApp messages are fully encrypted, which means they can't be read by Facebook or used for ad targeting.

"The more [that] the questions [Zuckerberg] got were either repetitive -- or in some cases were irrelevant -- I found him to be becoming even bolder and more energized by what was going on," Bajarin said.

Tune in again Wednesday for more coverage from Zuckerberg's hearings in Washington.

CNET's Abrar Al-Heeti contributed to this report.

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