Facebook's Zuckerberg warned by Senators of data 'privacy nightmare'

Register now

(Bloomberg) -- Senators pressed Facebook Inc. founder Mark Zuckerberg at the start of two days of congressional testimony over his company’s failure to protect the privacy of millions of its users, warning that they wanted more than just apologies and promises to do better.

“The idea that for every person who decided to try an app, information about 300 other people was scraped from your service was, to put it mildly, disturbing,” Senator John Thune, Republican chairman of the Senate Commerce Committee, said Tuesday at a joint hearing with the Senate Judiciary panel. He said Zuckerberg has a responsibility to ensure his dream “doesn’t become a privacy nightmare” for millions of Americans.

Zuckerberg’s trip to Washington came after weeks of damaging reports about the social network’s data practices and an apology tour by the billionaire chief executive officer and his deputies ahead of his first testimony before Congress.

In prepared remarks for two days of congressional hearings, Zuckerberg said the world’s largest social-media company didn’t do enough to prevent its tools from being used for harm, especially in regard to fake news, interference by Russians and others in elections, hate speech, developer policies and data privacy.

“It was my mistake, and I’m sorry,” Zuckerberg said. “I started Facebook, I run it, and I’m responsible for what happens here.”

Facebook shares were up 2.4 percent as the Senate hearing opened. They had been gaining for most of the day after declining about 1 percent just after trading began Tuesday. The stock has dropped about 13 percent since reports about the Cambridge Analytica data harvesting surfaced in March.

Suit and Tie

Before the Senate hearing, Zuckerberg, wearing a suit and tie in place of his usual gray t-shirt, moved through the Capitol on Monday to meet with lawmakers in what amounted to a charm offensive for the 33-year-old entrepreneur who started the world’s largest social network in a Harvard University dorm room.

But the scandal over political data firm Cambridge Analytica’s access to tens of millions of accounts without users’ knowledge ensured a long day for Zuckerberg in an environment that wasn’t under his customary control, with a worldwide audience and the company facing fresh regulatory risks around the globe.

“From the minute consumers wake up to the minute they put down their smartphone at the end of the day, companies like Facebook are tracking their activities and collection information,” Senator Bill Nelson of Florida, the top Democrat on the Commerce Committee, said in his prepared remarks. “Facebook has a responsibility to protect this personal information. Unfortunately, I believe the company failed to do so.”

“Only now has Facebook pledged to inform those consumers whose accounts were compromised” by Cambridge Analytica, even though it learned about the misuse in 2015, he said.

Ahead of the hearing, Judiciary Chairman Chuck Grassley of Iowa wrote an op-ed article saying the status quo is unacceptable and urging Zuckerberg to work with Congress on new rules of the road.

John Cornyn of Texas, the No. 2 Senate Republican and a member of the Judiciary Committee, went to the Senate floor to question whether Facebook’s business model is at odds with protecting privacy and whether new laws are needed, including new legal obligations for the company based in Menlo Park, California.

Zuckerberg’s contrition “won’t matter much without additional action, some of which might even be foundational to Facebook’s entire business model,” Cornyn said.

He questioned whether users really understand tech companies’ terms of service and have given informed consent for the use of their data.

“Perhaps we should treat social media platforms as information fiduciaries and impose legal obligations on them as we do with lawyers and doctors who are privy to some of our most personal private information,” Cornyn said.

Cornyn also took the company to task for failing to spot and act on Russian interference in the 2016 election much earlier, a topic many senators were likely to question Zuckerberg on during the hearing.

Bloomberg News