Zuckerberg comes out swinging in face of break-up tension

Via a leaked audio-recording of a Facebook townhall meeting with employees, Facebook CEO Mark Zuckerberg has taken a combative position in the face of increasing pressure.

Taking questions from Facebook employees, Zuckerberg has taken a much more forthright and confident stance than he generally does when in the shiny lights of the public domain. The leaked audio files, courtesy of the Verge, paint a picture of a man who is prepared to go to war to protect the gargantuan company he has built over the last decade.

“So, there might be a political movement where people are angry at the tech companies or are worried about concentration or worried about different issues and worried that they’re not being handled well,” Zuckerberg said.

“That doesn’t mean that, even if there’s anger and that you have someone like Elizabeth Warren who thinks that the right answer is to break up the companies … I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge.”

Presidential hopeful Elizabeth Warren, the Democrat Senator representing Massachusetts, is looking like the biggest political opponent of Silicon Valley. And it is becoming increasingly clear Facebook is enemy number one.

But perhaps these comments indicate just why Washington and its political leadership is acting so aggressively towards the likes of Facebook, Google and Amazon. These are companies who no-longer fear the political establishment. They are arguably more influential, and as you can see from the comments above, they believe they have the upper-hand when it comes to legal arsenals.

As we have mentioned before, this is one of the reasons we suspect politicians are taking such a firm stance against Silicon Valley in 2019. Not only are the actions and business models of these firms’ easy pickings for PR points, Washington DC seemingly does not like it is not the most influential neighbourhood in North America anymore.

On the other side of the debate, Warren has not kept her opinions about Facebook to herself or even attempted to disguise that some of the tweets have been directed towards Zuckerberg.

“We have to fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy,” Warren said in one tweet.

“Zuckerberg himself said Facebook is ‘more like a government than a traditional company’. They’ve bulldozed competition, used our private information for profit, undermined our democracy, and tilted the playing field against everyone else,” she said in another.

“Facebook’s anti-competitive mergers mean they face no real pressure to tackle disinformation. They won’t even do the bare minimum to improve transparency. Tech giants shouldn’t be able to wield enough power to undermine our democracy,” a final one read.

Facebook seems to be the focal point of Warren’s anger, though this might be down to the leaked audio, as well as the concentration of power at Facebook. Zuckerberg himself has admitted that his voting power at the company has made him a target for the politically ambitious, though this is not the only company which is facing pressure.

All of the major players in the Big Tech fraternity are becoming targets and it the raising temperature might hit boiling point before too long. Some of these companies might be willing to accept fines simply because they don’t make that much of a dent in the spreadsheets, but it would not be a surprise to see some aggression coming back the other direction before too long.

Silicon Valley and Washington DC both have ambitions to be the most prominent voice in the ears of the US consumer, but only one can secure that mantle.

UK Gov pulls back the curtain on Facebook data policies

With pressure mounting against Facebook over the last few months it was only a matter of time before a treasure trove of treachery was unveiled; the UK government has done just that.

Considering the breadth and depth of the information revealed by Damian Collins, a MP and Chair of the Digital, Culture, Media and Sport Committee, and the likelihood this is only scratching the surface, it’ll be some time before we discover the full impact. But, the door has been opened. For Facebook, the PR machine will have to find another gear as this will take some battling.

“As we’ve said many times, Six4Three – creators of the Pikinis app – cherrypicked these documents from years ago as part of a lawsuit to force Facebook to share information on friends of the app’s users,” Facebook said in a statement. “The set of documents, by design, tells only one side of the story and omits important context.”

Facebook is standing by changes made in 2014 which prevented developers seizing personal information of user’s friends, those who had not opted in. This is effectively the saga which kicked off the entire Cambridge Analytica scandal. Facebook argues Six4Three didn’t receive a temporary extension, allowing the app to continue operating while the changes were implemented, and the court case is manufactured revenge.

The Six4Three lawsuit is where Collins and his Committee managed to get their hands on the documents which have been unveiled here. Officials compelled Six4Three CEO Ted Kramer to hand over the documents while on a business trip to London. The documents were obtained as part of a legal discovery process brought about through Six4Three’s lawsuit against Facebook.

The documents are quite damning, suggesting Facebook used user personal information as a commodity, offering the team a useful bargaining chip to secure more attractive contracts, while also nipping any competitive threats before momentum was gathered. For Facebook, this should be considered a nightmare, and it seems investors agree. At the time of writing share price had dropped by 2.7% in overnight trading.

While these reports might not come as a surprise to those who work in the technology space, the general public are unlikely to find these reports very appealing. Facebook crafts an image of itself as a business which wants to help society, though these documents creates a perception of millionaires viewing the user as nothing more than a number, trading away information which doesn’t really belong to them. This idea will not be well-received by the general public.

Looking at the specifics of the documents, apps were invited to use Facebook just as long as it improved the Facebook brand, while some competitors were not allowed to use Facebook tools without the specific sign-off of CEO Mark Zuckerberg himself. One of these examples is Vine, which could be viewed as a means to obstruct rivals. Those who are legally-minded will know this could cause all sorts of problems for the social media giant.

Facebook has clearly recognised this is an issue as well. As part of its statement, Facebook has said it prevented apps which replicate the core functionality of its platform from reaping the full benefits, though it plans to remove this ‘out of date’ policy as soon as possible.

This is of course on concession Facebook is making, though there will have to be a hell of a lot more over the coming months. These documents are damning of the attitudes towards data privacy and also Facebook’s own policies. The lawmakers are sharpening their sticks and it won’t be long before they start taking more accurate aims at a firm which has done little to aid investigations, dodging meaningful questions like perfectly crafted PR ninjas.

One of the biggest recurring themes of the documents is the value which has been placed on data obtained through user’s friends. The idea of linking financial value to the developer’s ability to gain access to friend’s data is one of the key issues being raised by Collins. Some might suggest this goes against repeated statements from Facebook that it was unaware its platform was being abused.

This is the issue. Facebook has continually proclaimed its innocence, accepting criticisms that it should have done more, but ultimately the blame for abuse should be directed elsewhere. These documents suggest the social media giant was not only aware of the abuses but debated and understood the controversial nature. This does appear to be a complete contradiction of the firm’s previous stance.

Another example of this is an update made to changes to its policies on the Android mobile phone system, which enabled the Facebook app to collect a record of calls and texts sent by the user.

Perhaps this suggests a breach of trust during internal meetings and email exchanges, but it also damages the brand credibility of Facebook moving forwards. Facebook is in a hole right now, there’s no doubt about that.