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Facebook CEO Mark Zuckerberg Began Testimony Before Senate Committee with an Apology for Company’s History

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WASHINGTON, April 10, 2018 – After months of seemingly-unending scandal over his company’s role in the 2018 election, Facebook CEO Mark Zuckerberg began his first of two days of testimony on Capitol Hill Tuesday by making it clear he was well aware of the laundry list of problems with the company he created 14 years ago in his Harvard dorm room.

“It’s clear now that we didn’t do enough to prevent these tools from being used for harm as well,” Zuckerberg said while speaking at a rare joint hearing of the Senate Commerce and Judiciary committees. “And that goes for fake news, foreign interference in elections and hate speech, as well as developers and data privacy.”

The 33-year-old CEO, who swapped his trademark hoodie and dark t-shirt for a suit and tie during his first appearance on Capitol Hill – a venue he’d managed to avoid during years of smaller controversies over the company he founded – continued with something else not usually associated with him or Facebook: an apology.

“We didn’t take a broad enough view of our responsibility, and that was a big mistake. And it was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here.”

Facebook officials spoke with office of Special Counsel Robert Mueller

He also made some news as he confirmed once again that Facebook employees have spoken with  investigators working for Special Counsel Robert Mueller, whose office has been charged with looking into Russia’s efforts during the 2016 campaign and determining whether or not that interferences was aided by Donald Trump’s 2016 presidential campaign.

I know we’re working with them,” Zuckerberg said while declining to go into detail, citing confidentiality rules surrounding the investigation. He said that he had not been interviewed by Mueller or his team, however.

Over the course of more than four hours, Zuckerberg disappointed anyone hoping for a crack-up or a break in his composure as he fielded questions from 42 senators, invoking his company’s only-in-America origins to defend its frequently tone-deaf actions on privacy and its history-making failure in spotting and stopping efforts by Russia – and perhaps the Trump campaign — to manipulate American voters during the last presidential election.

While Zuckerberg told senators his company offered the Trump campaign the same assistance it would offer any customer, called the failure to stop Russia one of his “biggest regrets,” noting that getting the 2018 election right is one of his “top priorities” for this year.

While shareholders lauded Zuckerberg’s performance by driving Facebook’s stock price up by close of business Tuesday, many senators were not impressed.

Facebook’s history is dotted with apology after apology

Commerce committee chairman John Thune, R-S.D., noted Facebook’s history is dotted with apology after apology for what he euphemistically called “ill-advised decisions” on privacy matters.

“How is today’s apology different?” Thune asked.

Florida Senator Bill Nelson – the highest ranking Democrat on the Commerce Committee — promised action if Zuckerberg and his company fail to adequately tackle the problems posed by Facebook.

“If Facebook and other online companies will not or cannot fix these privacy invasions, then we will,” Nelson said.

Promoting new approaches to regulation on social media

Several Democrats took the opportunity to plug bills they’ve sponsored to impose some regulation on Facebook and other social media companies that make heavy use of user data, and while Republicans have yet to sponsor any, several said that could change.

Senator Lindsey Graham, R-S.C., wanted to know if Zuckerberg would be willing to work with lawmakers in order to look at what “regulations you think are necessary in your industry.”

“Absolutely,” Zuckerberg said.

He later told Sen. Dan Sullivan, R-Alaska, that he is “not the type of person who thinks that all regulation is bad.”

For the most part Zuckerberg’s response in the face of questioning was contrite, as he acknowledged that he and his colleagues “have made a lot of mistakes,” while promising to work harder in the future.

Sen. Ted Cruz tackles Zuckerberg over ‘political censorship’ at Facebook

Senator Ted Cruz, R-Texas, used his time for questions to grill Zuckerberg over about “political censorship” at Facebook.

Cruz cited an incident documented by GotNews.com, a conspiracy-focused site which claimed Facebook employees kept “conservative stories” out of Facebook’s trending topics list. The site suggested Facebook had blocked content from Diamond and Silk, a pair of African-American pro-Trump commentators who often appear on Fox News, and that Facebook fired Oculus founder Palmer Luckey because of their political beliefs.

In 2014 Facebook purchased Oculus VR, a virtual reality company.

Responding to Cruz’s question about Luckey – who gained some fame in conservative circles for purchasing a billboard suggesting Hillary Clinton be jailed – Zuckerberg denied bias had anything to do with his departure from the company and said the reason was not one that could be discussed in an open setting.

Other senators, however, appeared uncomfortable discussing technology-related topics, and were clearly reading questions that had been given to them by staff. Senators asked few follow-ups and Zuckerberg was able to deflect aggressive questioning by promising senators his lobbying team – which came with him in force by filling the rows of seats behind him – would get back to them.

No consensus yet on the need to regulate Facebook

Response to Zuckerberg’s testimony from outside the Capitol was not indicative of a consensus from both ends of the regulatory policy spectrum when it comes to the need for some regulation of Facebook and similar companies.

“Facebook clearly dropped the ball here, and some governmental response is justified, but Congress must resist the urge to pass knee-jerk legislation,” Berin Szóka, president of TechFreedom, a libertarian-leaning think tank, said in a letter to members of Congress. “At a minimum, the FTC may be justified in concluding that Facebook’s failure to notify users about Cambridge Analytica’s misuse of Facebook data constituted deception by ‘material omission.’”

Allie Bohm, privacy counsel at Public Knowledge, a consumer advocacy group that generally supports greater regulation of technology companies, appeared to disagree with Szoka’s assessment.

“In the twenty-first century, it is impossible to meaningfully participate in society without sharing our personal information with third parties. These third-party companies and platforms should have commensurate obligations to protect our personal information,” Bohm said.

“Unfortunately, it has become increasingly clear that too many third parties fail to live up to this responsibility.”

“This hearing is a good start to begin addressing corporate collection and use of user data in the modern economy. But, a hearing alone is not enough. We hope that the Committees will use this hearing to build the record for strong, comprehensive privacy legislation.”

Zuckerberg continued his Capitol Hill testimony on Wednesday, April 11, before the House Energy and Commerce Committee.

(Screenshot of a video by Capitol Intel of the scene as Mark Zuckerberg testified before the U.S. Senate on Tuesday, April 10, 2017.)

Andrew Feinberg is the White House Correspondent and Managing Editor for Breakfast Media. He rejoined BroadbandBreakfast.com in late 2016 after working as a staff writer at The Hill and as a freelance writer. He worked at BroadbandBreakfast.com from its founding in 2008 to 2010, first as a Reporter and then as Deputy Editor. He also covered the White House for Russia's Sputnik News from the beginning of the Trump Administration until he was let go for refusing to use White House press briefings to promote conspiracy theories, and later documented the experience in a story which set off a chain of events leading to Sputnik being forced to register under the Foreign Agents Registration Act. Andrew's work has appeared in such publications as The Hill, Politico, Communications Daily, Washington Internet Daily, Washington Business Journal, The Sentinel Newspapers, FastCompany.TV, Mashable, and Silicon Angle.

Antitrust

Federal Trade Commission Will Likely Not Be Able to Implement Competition Rules, Panelists Say

Panelists at TechFreedom event said judiciary will prevent the FTC from developing proposed antitrust policies.

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Photo of Peter Wallison from C-SPAN

WASHINGTON, October 22, 2021 –The Federal Trade Commission’s attempts to use rulemaking authority to issue antitrust policy governing technology companies will be struck down in federal courts, said panelists participating in a TechFreedom event on Thursday.

Recently formed conservative majorities on the Supreme Court and other panels have expressed opposition to the idea that the FTC possesses such rulemaking authority, these panelists said.

Hence, unlike past supreme courts, they current bench is likely to strike down FTC-issued binding rules.

Panelists highlighted former President Donald Trump appointees Brett Kavanaugh and Neil Gorsuch as justices who have opposed legal reasoning often used to permit FTC rulemaking.

Indeed, some panelists said early 20th Century legislation governing the FTC makes the case that the agency was created as an investigative body rather than a regulatory one.

Peter Wallison, senior fellow emeritus at the American Enterprise Institute, said that between five and six Supreme Court justices would ultimately vote to weaken precedents that allow for FTC rulemaking.

The Judiciary Committee of the House of Representatives recently advanced six antitrust bills that attempt to regulate the tech industry and foster greater competition, including the Ending Platform Monopolies Act and the Platform Competition and Opportunity Act.

FTC rules have taken on increased importance in terms of economic regulation due to the frequent inability of Congress to pass major legislation due to partisan gridlock. The FTC has proposed new procedures to ensure competition since Lina Khan was appointed as chair.

However, NERA Economic Consulting on Wednesday concluded that legislative proposals to regulate competition would impose costs of around $300 billion while impacting 13 additional American companies in the near term and more than 100 companies in the next decade.

Study author Christian Dippon contends that the legislation would limit American startup growth and international competitiveness while at the same time increasing costs for Americans.

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Section 230

Democrats Use Whistleblower Testimony to Launch New Effort at Changing Section 230

The Justice Against Malicious Algorithms Act seeks to target large online platforms that push harmful content.

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Rep. Anna Eshoo, D-California

WASHINGTON, October 14, 2021 – House Democrats are preparing to introduce legislation Friday that would remove legal immunities for companies that knowingly allow content that is physically or emotionally damaging to its users, following testimony last week from a Facebook whistleblower who claimed the company is able to push harmful content because of such legal protections.

The Justice Against Malicious Algorithms Act would amend Section 230 of the Communications Decency Act – which provides legal liability protections to companies for the content their users post on their platform – to remove that shield when the platform “knowingly or recklessly uses an algorithm or other technology to recommend content that materially contributes to physical or severe emotional injury,” according to a Thursday press release, which noted that the legislation will not apply to small online platforms with fewer than five million unique monthly visitors or users.

The legislation is relatively narrow in its target: algorithms that rely on the personal user’s history to recommend content. It won’t apply to search features or algorithms that do not rely on that personalization and won’t apply to web hosting or data storage and transfer.

Reps. Anna Eshoo, D-California, Frank Pallone Jr., D-New Jersey, Mike Doyle, D-Pennsylvania, and Jan Schakowsky, D-Illinois, plan to introduce the legislation a little over a week after Facebook whistleblower Frances Haugen alleged that the company misrepresents how much offending content it terminates.

Citing Haugen’s testimony before the Senate on October 5, Eshoo said in the release that “Facebook is knowingly amplifying harmful content and abusing the immunity of Section 230 well beyond congressional intent.

“The Justice Against Malicious Algorithms Act ensures courts can hold platforms accountable when they knowingly or recklessly recommend content that materially contributes to harm. This approach builds on my bill, the Protecting Americans from Dangerous Algorithms Act, and I’m proud to partner with my colleagues on this important legislation.”

The Protecting Americans from Dangerous Algorithms Act was introduced with Rep. Tom Malinowski, D-New Jersey, last October to hold companies responsible for “algorithmic amplification of harmful, radicalizing content that leads to offline violence.”

From Haugen testimony to legislation

Haugen claimed in her Senate testimony that according to internal research estimates, Facebook acts against just three to five percent of hate speech and 0.6 percent of violence incitement.

“The reality is that we’ve seen from repeated documents in my disclosures is that Facebook’s AI systems only catch a very tiny minority of offending content and best content scenario in the case of something like hate speech at most they will ever get 10 to 20 percent,” Haugen testified.

Haugen was catapulted into the national spotlight after she revealed herself on the television program 60 Minutes to be the person who leaked documents to the Wall Street Journal and the Securities and Exchange Commission that reportedly showed Facebook knew about the mental health harm its photo-sharing app Instagram has on teens but allegedly ignored them because it inconvenienced its profit-driven motive.

Earlier this year, Facebook CEO Mark Zuckerberg said the company was developing an Instagram version for kids under 13. But following the Journal story and calls by lawmakers to backdown from pursuing the app, Facebook suspended the app’s development and said it was making changes to its apps to “nudge” users away from content that they find may be harmful to them.

Haugen’s testimony versus Zuckerberg’s Section 230 vision

In his testimony before the House Energy and Commerce committee in March, Zuckerberg claimed that the company’s hate speech removal policy “has long been the broadest and most aggressive in the industry.”

This claim has been the basis for the CEO’s suggestion that Section 230 be amended to punish companies for not creating systems proportional in size and effectiveness to the company’s or platform’s size for removal of violent and hateful content. In other words, larger sites would have more regulation and smaller sites would face fewer regulations.

Or in Zuckerberg’s words to Congress, “platforms’ intermediary liability protection for certain types of unlawful content [should be made] conditional on companies’ ability to meet best practices to combat the spread of harmful content.”

Facebook has previously pushed for FOSTA-SESTA, a controversial 2018 law which created an exception for Section 230 in the case of advertisements related prostitution. Lawmakers have proposed other modifications to the liability provision, including removing protections in the case for content that the platform is paid for and for allowing the spread of vaccine misinformation.

Zuckerberg said companies shouldn’t be held responsible for individual pieces of content which could or would evade the systems in place so long as the company has demonstrated the ability and procedure of “adequate systems to address unlawful content.” That, he said, is predicated on transparency.

But according to Haugen, “Facebook’s closed design means it has no oversight — even from its own Oversight Board, which is as blind as the public. Only Facebook knows how it personalizes your feed for you. It hides behind walls that keep the eyes of researchers and regulators from understanding the true dynamics of the system.” She also alleges that Facebook’s leadership hides “vital information” from the public and global governments.

An Electronic Frontier Foundation study found that Facebook lags behind competitors on issues of transparency.

Where the parties agree

Zuckerberg and Haugen do agree that Section 230 should be amended. Haugen would amend Section 230 “to make Facebook responsible for the consequences of their intentional ranking decisions,” meaning that practices such as engagement-based ranking would be evaluated for the incendiary or violent content they promote above more mundane content. If Facebook is choosing to promote content which damages mental health or incites violence, Haugen’s vision of Section 230 would hold them accountable. This change would not hold Facebook responsible for user-generated content, only the promotion of harmful content.

Both have also called for a third-party body to be created by the legislature which provides oversight on platforms like Facebook.

Haugen asks that this body be able to conduct independent audits of Facebook’s data, algorithms, and research and that the information be made available to the public, scholars and researchers to interpret with adequate privacy protection and anonymization in place. Beside taking into account the size and scope of the platforms it regulates, Zuckerberg asks that the practices of the body be “fair and clear” and that unrelated issues “like encryption or privacy changes” are dealt with separately.

With reporting from Riley Steward

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Big Tech

OECD Ratifies Global 15% Digital Tax Rate, Aims For 2023 Implementation

The OECD finalized an earlier agreement that would impose a 15% tax on companies operating in 136 member nations.

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US Treasury Secretary Janet Yellen.

WASHINGTON, October 11, 2021 – The Organization for Economic Cooperation and Development on Friday finalized an agreement to levy a 15 percent tax rate on digital multinational businesses, like Amazon, Apple, Google, and Facebook, starting in 2023.

The ratification of the tax rate comes after years of negotiations and after individual countries have proposed their own tax systems to keep up with internet businesses that have long skirted the tax of laws of nations they operate in because they don’t necessarily have a physical connection inside those borders. The Liberal Party in Canada, for example, had proposed a 3 percent tax on revenues obtained inside the country, while Britain, France, Italy, and Spain had been contemplating digital sales taxes on their own.

The 15 percent tax rate has been signed by 136 member nations, all OECD and G20 countries, out of 140 states (Kenya, Nigeria, Sri Lanka, and Pakistan did not join) and finalizes a July political agreement to reform international tax rules. The United States had proposed the 15 percent global corporate tax rate earlier this year.

Hungary and Ireland, the latter of which is a corporate tax haven for companies like Apple and Google, were two of the last holdouts. Hungary agreed to join Friday after they were guaranteed a ten-year rollout period for the regulation, and Ireland agreed Thursday after guarantees that the rate would not be subsequently increased.

The new tax rate is expected to generate US $150 billion annually for the countries involved and targets companies with revenues of over 750 million Euros. “The global minimum tax agreement does not seek to eliminate tax competition, but puts multilaterally agreed limitations on it,” the OECD said, adding the tax will not only stabilize the international tax system but also provide companies with more certainty as to their obligations.

The regulation would be the first foundational cross-border corporate tax rate regulatory change in over a century. Some are skeptical of President Joe Biden’s and Congress’s ability to ratify the agreement. The OECD hopes to sign a multilateral convention by 2022 and implement the reform by 2023.

The final agreement will be delivered to the G20 finance ministers meeting in Washington D.C. on Wednesday, then it will be charted off to the G20 Leaders’ Summit in Rome at the end of this month, according to a OECD press release.

The United States was in a bit of a defensive pattern under former President Donald Trump, after the country made tariff threats if the European nations, particularly France, decided to tax its big homegrown corporations.

French Finance Minister Bruno Le Maire said that the agreement, “opens the path to a true fiscal revolution.” US Treasury Secretary Janet Yellen said that the OECD has “decided to end the race to the bottom on corporate taxation,” referring to the practice of attracting large companies to headquarter in one’s country through purposefully incentivized lower tax rates.

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