Facebook rejects co-founder call for breakup, senator urges US antitrust probe

WASHINGTON -- Facebook Inc quickly rejected a call from co-founder Chris Hughes on Thursday to split the world's largest social media company in three, while lawmakers urged the US Justice Department to launch an antitrust investigation.

Facebook has been under scrutiny from regulators around the world over data sharing practices as well as hate speech and misinformation on its networks. Some US lawmakers have pushed for action to break up big tech companies as well as federal privacy regulation.

"We are a nation with a tradition of reining in monopolies, no matter how well intentioned the leaders of these companies may be. Mark's power is unprecedented and un-American," Hughes, a former college roommate of Facebook Chief Executive Mark Zuckerberg, wrote in a lengthy New York Times opinion piece.

Facebook's social network has more than 2 billion users. It also owns WhatsApp, Messenger and Instagram, each used by more than 1 billion people. Facebook bought Instagram in 2012 and WhatsApp in 2014.

Facebook rejected Hughes' call for WhatsApp and Instagram to be made into separate companies, and said the focus should instead be on regulating the internet. Zuckerberg will be in Paris on Friday to discuss internet regulation with French President Emmanuel Macron.

"Facebook accepts that with success comes accountability. But you don't enforce accountability by calling for the break up of a successful American company," Facebook spokesman Nick Clegg said in a statement.

"Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet. That is exactly what Mark Zuckerberg has called for."

Late on Thursday, Senator Mike Crapo, the Republican who chairs the banking committee and Sherrod Brown, the top Democrat, asked Facebook to answer questions about a potential cryptocurrency-based payments system using its social network and its data collection.

The letter also asked questions about consumer privacy protections and if it had information about users' creditworthiness.

US Senator Richard Blumenthal, a Democrat, told CNBC he thinks Facebook should be broken up and that the Justice Department's antitrust division needs to begin an investigation.

Antitrust law makes such a proposal tough to execute because the government would have to take the company to court and win. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being the two biggest examples.

SENSE OF RESPONSIBILITY

Hughes co-founded Facebook in 2004 at Harvard with Zuckerberg and Dustin Moskovitz. He left Facebook in 2007, and has said in a LinkedIn post he made half a billion dollars for his three years of work.

"It's been 15 years since I co-founded Facebook at Harvard, and I haven't worked at the company in a decade. But I feel a sense of anger and responsibility," Hughes said.

Facebook lost several executives after a bruising series of privacy and disinformation scandals since 2016. The founders of Instagram and WhatsApp have left, as has the executive who took over WhatsApp last year.

Chief Product Officer Chris Cox, who had been at the company for 13 years and was one of Zuckerberg's closest lieutenants, stepped down in March around the same time Facebook announced a pivot towards more private messaging.

He later cited "artistic differences" with Zuckerberg as his reason for leaving, without elaborating.

Critics say the company's pivot to privacy, which will introduce more encrypted communications, will restrict Facebook's ability to police propaganda, hate speech and other abusive behavior. Cox focused on improving tools to catch banned content in recent years.

Despite its scandals, the company's core business has proven resilient. Facebook has blown past earnings estimates in the past two quarters and its stock price barely budged in response to Hughes' opinion piece.

Hughes suggested Zuckerberg should be held responsible for privacy and other lapses at the company, echoing a call earlier this month by Democratic U.S. Senator Ron Wyden to hold the CEO individually liable for "repeated violations" of privacy.

"The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook's explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive," Hughes said.

LAWMAKER PRESSURE

Senator Elizabeth Warren, who is seeking the Democratic nomination for the 2020 presidential election, has vowed to break up Facebook, Amazon.com Inc and Alphabet Inc's Google if elected.

"Today's big tech companies have too much power—over our economy, our society, & our democracy. They've bulldozed competition, used our private info for profit, hurt small businesses & stifled innovation. It's time to #BreakUpBigTech," Warren said on Twitter on Thursday.

Representative Ro Khanna, a California Democrat, said in a statement he agreed in retrospect that US regulators should not have approved Facebook's acquisition of Instagram and WhatsApp.

"The way forward is to heavily scrutinize future mergers and to ensure no company has anti-competitive platform privileges," Khanna said.

In one of a number of scandals to hit the company, Facebook is accused of inappropriately sharing information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica.

Facebook has been in advanced talks with the US Federal Trade Commission to settle a year-old investigation and said last month it expected to spend between $3 billion and $5 billion.

On Monday, Republican and Democratic US senators criticized reported plans for the settlement, calling on the FTC to impose harsher penalties and more restrictions on Facebook's business practices.

Hughes said he last met with Zuckerberg in the summer of 2017, several months before the Cambridge Analytica scandal broke.

"Mark is a good, kind person. But I'm angry that his focus on growth led him to sacrifice security and civility for clicks," Hughes said.

Adam Mosseri, Facebook's previous head of news feed who recently took over Instagram, responded to Hughes on Twitter.

"Regulation is important and necessary, but I'm not convinced breaking us up is the right path. Would love to chat about it if you're open," Mosseri said. 

source: news.abs-cbn.com

Facebook gave data on user's friends to certain companies - documents

BENGALURU/SAN FRANCISCO - Facebook Inc let some companies, including Netflix and Airbnb, access users' lists of friends after it cut off that data for most other apps around 2015, according to documents released on Wednesday by a British lawmaker investigating fake news and social media.

The 223 pages of internal communication from 2012 to 2015 between high-level employees, including founder and Chief Executive Mark Zuckerberg, provide new evidence of previously aired contentions that Facebook has picked favorites and engaged in anti-competitive behavior.

The documents show that Facebook tracked growth of competitors and denied them access to user data available to others.

In 2014, the company identified about 100 apps as being either "Mark's friends" or "Sheryl's friends" and also tracked how many apps were spending money on Facebook ads, according to the documents, referring to Zuckerberg and Chief Operating Officer Sheryl Sandberg.

The insight into the thinking of Facebook executives over that period could invite new regulatory scrutiny into its business practices.

Facebook said it stood by its deliberations and decisions, but noted that it would relax one "out-of-date" policy that restricted competitors' use of its data.

One document said such competitor apps had previously needed Zuckerberg's approval before using tools Facebook makes available to app developers.

Zuckerberg wrote in a post on Wednesday that the company could have prevented the Cambridge Analytica data breach scandal had it cracked down on app developers a year earlier in 2014.

Misuse of Facebook user data by Cambridge Analytica, a political consulting firm, along with another data breach this year and revelations about Facebook's lobbying tactics have heightened government scrutiny globally on the company's privacy and content moderation practices.

Stifel analysts on Wednesday lowered their rating on Facebook shares to "hold," saying that "political and regulatory blowback seems like it may lead to restrictions on how Facebook operates, over time."

Damian Collins, a Conservative British parliamentarian who leads a committee on media and culture, made the internal documents public after demanding them last month under threat of sanction from Six4Three.

The defunct app developer obtained them as part of its ongoing lawsuit in California state court alleging that Facebook violated promises to app developers when it ended their access to likes, photos and other data of users' friends in 2015.

Facebook, which has described the Six4Three case as baseless, said the released communications were "selectively leaked" and it defended its practices.

'WHITELISTED' FOR ACCESS TO FRIENDS DATA

Though filed under seal and redacted in the lawsuit, the internal communications needed to be made public because "they raise important questions about how Facebook treats users' data, their policies for working with app developers, and how they exercise their dominant position in the social media market," Collins said on Twitter.

Dating app Badoo and ride-hailing app Lyft were among other companies 'whitelisted' for access to data about users' friends, the documents showed. 

Lyft wanted to show carpool riders their mutual friends as an "ice breaker," even if those friends were not using Lyft, according to one email. Facebook said in an email that it approved the request because it would add to a feeling of “safety” for riders.

Facebook described such deals as short-term extensions, but it is unclear exactly when the various agreements ended.

Netflix, Airbnb, Lyft and Badoo did not immediately respond to requests for comment.

The documents show an exchange between Zuckerberg and senior executive Justin Osofsky in 2013, in which they decided to stop giving friends' list access to Vine on the day that social media rival Twitter Inc launched the video-sharing service.

"We’ve prepared reactive PR," Osofsky wrote, to which Zuckerberg replied, "Yup, go for it."

Twitter declined to comment.

Friends' data had stoked the growth of many apps because it enabled people to easily connect with Facebook buddies on a new service.

Facebook weighed charging other apps for access to its developer tools, including the friends lists, if they did not buy a certain amount of advertising from Facebook, according to the emails. In one from 2012, Zuckerberg wrote that he was drawing inspiration for business models from books he had been reading about the banking industry.

Facebook said it ultimately maintained free access to the tools.

source: news.abs-cbn.com