Zuckerberg threatened with Facebook breakup
WASHINGTON — Facebook CEO Mark Zuckerberg faced a threat to break up his company as a congressional hearing opened on the social media giant’s proposal to establish a cryptocurrency, Libra.
The cryptocurrency proposal drew scrutiny due to Facebook Inc.’s enormous base of more than 2 billion monthly users and its advertised promise to “transform money.” Facebook’s handling of user data, its role in propagating Russian propaganda before the 2016 election, antitrust concerns and other issues have made the company into a popular target of bipartisan opprobrium.
House Financial Services Chairwoman Maxine Waters, D-Calif., opened the hearing Wednesday with a list of issues with Libra, which would be a “stablecoin” backed by a basket of currencies and overseen by a consortium of private corporations and nonprofit organizations; and Calibra, a Facebook subsidiary that would operate a digital wallet using Libra.
“Facebook’s plans ... raise many concerns regarding privacy trading risk, discrimination, opportunities for diverseowned financial firms, national security, monetary policy and the stability of the global financial system,” Waters said.
“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 ... that perhaps you believe you’re above the law,” she said. “And it appears 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 own users and even our democracy, to get what you want.
“All of these problems I’ve outlined, and given your company’s reach, it should be clear we have serious concerns about your plans to establish a global digital currency that would challenge the U.S. dollar,” Waters continued. “In fact, you have opened up a serious discussion about whether Facebook should be broken up.”
Zuckerberg tried to deflate those concerns, acknowledging them in his opening remarks. “I believe this (Libra) is something that needs to get built, but I get that I’m not the ideal messenger for this right now,” he said. “We’ve faced a lot of issues over the past few years, and I’m sure people wish it was anyone but Facebook that would propose this.”
Zuckerberg was called to testify after Facebook’s announcement about Libra in June was met by near-universal concern by policymakers, including President Donald Trump, Federal Reserve Board Chairman Jerome H. Powell and Waters — three individuals who rarely see eyeto-eye.
The committee’s ranking member, Republican Patrick T. McHenry of North Carolina, pushed back on the criticism directed at the tech billionaire.
“Today is a trial on American innovation,” McHenry said. “There is a growing concern about the role technology plays in our lives. That’s warranted.”