Today we're here to examine the impact of Facebook on the financial services and housing sectors.
Our sole witness is Facebook's chairman and CEO Mark Zuckerberg.
Facebook's plans to create a digital currency Libra and a digital wallet Calibra raise many concerns relating to privacy Trade and risk, discrimination, opportunities for diverse-owned, financial firms, national security, monetary policy, and disability of the global financial system.
Each month, 2.7 billion people use your products, that's over a third of the world's population, that's huge That's so big that it's clear to me and to anyone who hears this list that perhaps you believe that you're above the law.
And it appears that you're aggressively increasing the size of your company and are willing to step on or over anyone including your competitors, women, people of color, your on users, and even our democracy.
To get what you want.
All of these problems either outline, and given the company's size and reach it should be clear why we have serious concerns about your plans to establish a global digital currency that would challenge the US dollar.
In fact, you have opened up a serious discussion about whether Facebook should be broken up.
Thank you for the opportunity to testify today.
As we sit here, there are more than 1 billion people around the world who don't have access to a bank account, but could through mobile phones, if the right system existed, and that includes more than 14 million people right here in the US.
Being shut out of the financial system has real consequences for people's lives, and it's often the most disadvantaged people who pay the highest price.
People pay far too high cost and have to wait far too long to send money home to their families abroad.
The current system is failing them.
The financial industry Is stagnant and there is no digital, financial and architecture to support the innovation that we need.
I believe that this problem can be solved and Libra can help.
The idea behind Libra is that sending money should be as easy and secure as sending a message.
Liberal will be a global payment system, fully backed by a reserved of cash and highly liquid assets.
Now, I believe that this is something that needs to get built.
But I get that.
I'm not the ideal messenger for this right now.
We faced a lot of issues over the past few years and I'm sure there are a lot of people who wish it were anyone but Facebook who are helping to propose this.
I actually don't know if Libra is going to work.
But I believe that it's important to try new things.
And as long as you're doing so responsibly, this has been a challenging few years for Facebook.
I recognize that we play an important role in society and have unique responsibilities because of that.
And I feel blessed to be in a position where we can make a difference in people's lives.
And for as long as I'm here, I'm committed to using our position to push for big ideas that I believe can help empower people.
Facebook Changes the rules when it can benefit itself.
Last year, Facebook banned all cryptocurrency ads on his platform, because and I quote, they are frequently associated with misleading or deceptive promotional practices, quote unquote.
Then earlier this year, Facebook rolled back the cryptocurrency add band bought a blockchain company and announced his own cryptocurrency.
So tell us what change.
You change your policy when it benefits you You reinstated crypto currency ads because you had plans to start your own crypto currency.
So this brings me back to your new policy on political speech.
My question to you is, how does this new policy benefit you?
Because it seems that a policy that allows politicians to lie, mislead and deceive Would also allow Facebook to sell more ads to those politicians, thus making your company more money.
Look, 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.
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.
I think especially in the political process for challenger candidates, and for local candidates, and for advocacy groups whose message might not otherwise be covered by the media.
Having ads can be an important way to inject your message into [UNKNOWN]
Let me interupt you for a minute.
Are you telling me, I think as you've said to me before, you plan on doing no fact checking on political ads?
Chairwoman, our policy is that we do not fact check politician speech And the reason for that is that we believe that in a democracy, it is important that people can see for themselves what politicians are saying.
Why Switzerland for Libra?
Why not the United States?
So the Libra association is an independent association.
We were trying to set up a global payment system.
Switzerland is where a lot of the international organizations are.
The greater regulatory certainty in Switzerland and here in the United States for this type of technology.
I think Switzerland has certainly been forward leaning on wanting to work through systems like this, but I don't want this to come across as if,
And the United States is not Congressman, one of the things that I just want to be clear on is that the independently Bristoe Station is independent, we're a part of it, we helped stand it up, we don't control it, but I just want to make sure it's 100% cleared everyone today that my commitment running Facebook
Is that we're not gonna launch anything that is a product or a part of this until we have full support from US regulators.
You see alipay and we chat pay working.
Why not just do a Facebook version of alipay, in order to level this.
A part of the infrastructure that they're building on is a lot more modern than Then some of what we would have to build on here.
As soon as we put forward the white paper around the Libra project, China immediately announced a public private partnership working with companies like that to extend the work that they'd already done with Alipay into a digital [UNKNOWN] as part of the Belt and Road Initiative that they have.
And they're planning on launching that in the next few months.
Will you commit to waiting until you get approval from every US regulator that Libra effects before you'll support launching Libra?
Yes or No?
Congresswoman, all of the regulators that have jurisdiction over a part of what we're doing, we are working with them and will seek approval from At PayPal, Visa, MasterCard, Stripe, Booking Holdings, eBay, and Mercado Pago.
You've lost these stable partners, I would say, and I find it highly concerning.
Very briefly, what do you make of these sudden departures from the association and why do a number of these founding members
Have concerns that whether you're up to the task of meeting our money laundering and regulatory standards.
This project is too big for any one company to do on its own, which is why we we set up this Independent Liberal Association with a number of other companies and non profits.
It's a very complex project and as you say it's risky.
Why are they departed.
I think you'd have to ask them specifically for
Why do you think they dropped out?
I think because it's a risky project and that there's been a lot of scrutiny.
Yes, it's a risky project.
16.8 million as confirmed by the Department of Justice Of the 18.4 million world wide reports of child sexual abuse material are on Facebook.
How much is this figure growing year after year, and if you enact end to end encryption what will become of the children who will be harmed as a result?
That they're not reported.
Child exploitation is one of the most serious threats that we focus on.
What is Facebook doing?
16.8 of the 18.4 million?
Those reports come from Facebook.
The reason why there's the vast majority come from Facebook, is because I think we work harder than any other company to identify this behavior.
what are you doing to shut this down?
These account peddle horrific illegal content that exploits women and children.
What are you doing, Mr.
Zuckerberg to shut this down?
Well Congresswoman, we build sophisticated systems to find this behavior.
16.8 million and growing?
Of the 18.4 images?
Congressmen, I don't think Facebook is the place on the internet where this behavior is happening.
I think the fact that the vast majority of those reports come from us reflect the fact that we actually do a better job than others of finding it and acting on it.
Why should we believe what you and Calibra are saying about protecting customer privacy and financial data?
We certainly have work to do to build trust.
I think that the settlement and order that we entered into with the FTC will help us set a new standard for our industry in terms of rigor for the privacy program that we're building.
Zuckerberg, is Facebook able to be assure us that it will support user's fair In open discussion and communications related to the risks as well as the benefits to vaccinations.
We do care deeply about giving people a voice and freedom of expression.
Those are some of the founding values of hte company.
At the same time we also hear consistantly from our community that people want us to stop the spread of misinformation So what we do is we try to focus on misinformation that has the potential to lead to physical harm or imminent harm.
And that can include especially misleading health advice.
Are you 100% confident that vaccines pose no injury to any person on this planet?
Congressman, I don't think it would be possible for anyone to be 100% confident, but my understanding of the scientific consensus is that it is important that people get their vaccines.
Is Culebra, Facebook?
Okay, Congressman, there are two organizations here.
There is the independent [INAUDIBLE] association.
Yep, that's what I'm wanting to get to know.
Which is a non profit.
So it's not a for profit [INAUDIBLE] either there is [INAUDIBLE]
So how is [INAUDIBLE] How does the voting, here's what I'm trying to get up.
How does the voting go?
Is it what David [UNKNOWN] says.
it is what Facebook says or is it You can be over ruled by others in the association?
Right now there are 21 companies, and non profits,
There are a lot more that want to join.
Each company and non profit organization that's a member has one vote in electing the board.
Right now there are five board members.
Will you commit, That Facebook will not censor any political ad placed on your platform or in support of President Donald Trump.
My commitment on this is that, or the principle at least here, is that we believe that people should be able to see for themselves what politicians are saying.
That doesn't just go for.
For Trump that goes for any of the candidates for any of our national offices.
People need to be able to see for themselves and be able to make judgments on what the candidates are saying and their character.
Well, I applaud you for that.
And I don't want you to be bullied by politicians to relinquish our treasured free speech under the first amendment.
As your code currently exists, can you transact anonymously with LIBRA?
Certainly would be possible to build a system that would allow that.
I think that there's a policy question About what the restrictions are that need to be placed on that.
Do you know who the firm that you employ for civil rights is?
Congressman, I don't know off the top.
How could you not know when you have employed the most historical, the largest civil rights firm?
To deal with issues that are major, and this is what's so frustrating to me, it's almost like you think this is a joke, when you have ruined the lives of many people discriminated against them.
Do you know what percentage of African Americans on Facebook in comparison to majority folks, do you know what the percentages are?
People using the Facebook.
Do you know what the percentages are for African Americans?
I don't because we don't collect the racism.
Well, it came out in a report and in the Pew Research Center that was sent to you, so maybe you just don't read a lot of things that deal with civil rights are African Americans.
I have a lot of questions I'm gonna send to you that I'm not gonna be able to get through.
And I would like an answer because this is appalling and disgusting to me.
And I [UNKNOWN] bad.
I'm almost tempted to ask you since you can't lie to Congress.
When you were compared to Mr. Trump, did you take that as a compliment?
No don't answer, that was a joke.
At the end the day, who's going to be responsible if Libra fails?
Well congressman I think the point of the one to one reserve backing is to prevent the kind of leverage that you see in the traditional banking industry.
But it just wouldn't be possible when using a basket of currencies, and so I think that the main question I really want to have answered is If LIBOR fails, who's going to be responsible for that?
Well Congressman the the LIBOR Association will have the reserve.
But I understand that this is an important question and this is one of the things that will be working with Fsock and other regulators to make sure that we have a solution that meets their standards.
You've mentioned you're not gonna mix social and payment data, right?
And I think that's important to keep that distinction.
I'm a trust but verified kind of a person.
So what regulatory oversight are you willing to sign up for to ensure that that's the case?
Cuz I don't necessarily just trust you to do that.
Well Congressman, my understanding is the FCC order that we just entered into means that we're going to have to certify that, at each level of the company, every manager who is overseeing a team that involves people's personal data, is going to have to certify on a quarterly basis, that they are not, to the best of their knowledge, their team is upholding the privacy commitments that we've made But if somehow hackers find a way to hack the technology who will be liable?
Congressman, I think that that depends on where exactly the security vulnerability is.
And if it's within our services, then I would assume that we will be liable.
If it's in another part of the independent Libra Association.
Then it might be someone else.
But this is gonna be something that I would imagine the regulators will review.
This would create either financial stability or other types of concerns that we've talked about today.
Zuckerberg, as you know Facebook can be sometimes an unkind place.
Both toward my personal appearance and today apparently toward your haircut.
But, as a mother of a teenage boy, I just want to say thanks for modeling the short cut.
You've got about 15 thousand contractors watching murders, stabbing, suicides, and other gruesome disgusting videos for content moderation, correct?
Yes, I believe that that is correct.
You pay many of those workers under $30,000 a year and you've cut them off from mental healthcare when they leave the company, even if they have PTSD because of the work for your company.
Is that correct?
Congresswoman, my understanding is we pay everyone including the contracters associated with the company At least a $15 a minimum wage and markets and cities where there's a high cost of living that's a $20 minimum wage.
We go out of our way to offer.
->> I take your word of the wage, claiming my time.
I know that there's multiple ways that you're able to collect data for individuals.
So I'm asking you for those folks who don't have a Fcaebook account.
What are you doing to help them place limits on the information that your company has about them?
Congresswoman, my understanding is not that we build profiles for people who are not on our servers.
There may be signals and that apps and other things sent us that might include people who are in our community.
But I don't think we include those in any kind of an understanding of who a person is if the person isn't on our service.
So I appreciate that what actions do you know specifically are being taken or are you willing to take to ensure that people who don't have a Facebook account have that power to limit the data that your company's collecting?
Congresswoman what I'm Trying to communicate is that I believe that that's the case.
Do you believe in what you are building?
So, yes or no.
Would you leave behind your children's inheritance in Libra?
Do you believe in what you're building?
Yes, I do and and-
Would you leave behind your children's inheritance in Libra?
I think it's a fair question, because you've proven that we cannot trust you with our emails, with our phone numbers.
So why should we trust you with our hard earned money?
Reclaiming my time.
If you can answer yes or no would you leave behind your children's inheritance in Libra?
Congresswoman, I would because it'll be back one to one by-
All right, moving on.
We're running out of time here.
What year and month Did you personally first become aware of Cambridge Analytica I'm not sure the exact time but it was probably around the time when it became public, I think it was around March of 2018, I could be wrong though.
Mm hm, and
I'm actually as you are asking this, I I do think I was aware of Cambridge Analytica as an entity earlier.
I don't know if I was tracking how they were using Facebook, specifically.
When was the issue discussed with your board member, Peter Thiel?
Congresswoman, I don't know that off-hand.
You don't know.
This is the largest data scandal with respect to your company that had catastrophic impacts on the 2016 election.
You don't know?
Well congresswoman I'm sure we discussed it after it were aware of what happened.
You announced recently that the official policy of Facebook now allows politicians to pay to spread disinformation in 2020 elections and in the future.
So I just wanna know how far I can push this in the next year.
To your policy using census data as well, could I pay to target predominantly black zip codes and advertise them the incorrect election date?
No congresswoman, you couldn't.
We have even for these policies around The newsworthiness of content that politicians say and the general principle that I believe that
But you said you're not going to fact check my ads.
If anyone including a politician is saying things that is calling for violence or could risk imminent physical harm or voter or sense of suppression when we roll out the sense of suppression Policy, we will take that content out.
So you will?.
There is some threshold where you will fact check political advertisements is that what you're telling me?.
Well, congresswoman yes and for specific things like that.
How much wealth and power is too much for a single private corporation?
And how much wealth and power is too much for you?
Well, Congressman, I think you may misunderstand my motive.
So I, I'm certainly not doing this because I'm trying to make more money.
I've committed that.
I'm going to Give 99% of the Facebook shares away during my life to philanthropic causes through the Chan Zuckerberg initiative with my wife.
So making money is certainly not my main motive here.
I am trying to use the position that I have To do things that I think are gonna make the world better and they're gonna improve people's lives.
And I would hope that's what you would want me to do.
I mean, we're in a unique position.
[LAUGH] Thank you for your answer.
Let me just say this, from all that I have heard in the last month plus coming into this hearing, and your testimonies this morning This afternoon, I think that Facebook has acquired too much power, it has become too big, and we should seriously consider breaking it up.