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tv   Closing Bell  CNBC  April 10, 2018 3:00pm-5:00pm EDT

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from such data no. 1, besides professor hogan's transfer and now potentially pew view, do you know any instances information was transferred to third parties in breach of facebook's terms if so, how many times has that happened, and was facebook only made aware of that transfer by some third party >> mr. chairman, thank you as i mentioned, we're now conducting a full investigation into every single app that had access to a large amount of information. before we locked down platforms to prevent developers from accessing this information in 2014 we believe that we are going to be investigating many apps, tens of thousands of apps, and if there's suspicious activity, we conduct a full audit of the apps and see how they use the data, and if it's improper
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if so, we ban them from facebook and tell everyone affected as for past activity, i don't have all the examples of apps we've banned here, but if you'd like, i can have the team follow up with you after this >> have you ever required an audit to ensure the deletion of improperly transferred data, and if so, how many times? >> mr. chairman, yes, we have. i don't have the exact figure on how many times we have, but overall, the way we've enforced our platform policies, in the past, is we have looked at patterns of how apps have used our ab, ppis, accessed informat, and made reports about apps doing sketchy things going forward, we have a pro-active position on this and do much more regular spot checks and other reviews of apps as well as increasing the amount of audits that we do, and, again, i can make sure that our team following up with you on
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anything about the specific past stats that would be interesting. >> i was going to assume that sitting here today, you have no idea, and if i'm wrong on that, you're able -- you're telling me, i think, that you're able to supply those figures to us, at least as of this point >> mr. chairman, i will have my team follow up with you on what information we have. >> right now, no certainty whether or not, how much of that is going on, right facebook collects massive amounts of data from consumers including content, networks, contact lists, device information, location, and information from third parties, yet your data policy is only a few pages long and provides consumers with only a few examples of what is collected and how it might be used the examples given emphasized benign uses such as connecting with friends, but your moll poly
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does not give indication of controversy issues of such data. question, why doesn't facebook disclose to users all the way the data might be used by facebook and other third parties and what is facebook's responsibility to inform users about that information >> mr. chairman, i believe it's important to tell people exactly how the information that they share on facebook is going to be used that's why every single time you go to share something on facebook, whether it's a photo on facebook, or a message and messenger, every single time, there's a control right there about who you're going to be sharing it with, whether y friends, public, or a specific group, and you can change that and control that in line to your broader point about the privacy policy, this gets into an issue that i think we and others in the tech industry have
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found challenging which is that long privacy policies are very confusing, and if you make it long and spell out all the detail, you're going to reduce the percent of people who read it and make it accessible to them, so one of the things that we've struggled with over time is to make something that is as simple as possible so people can understand it as well as giving them controls in line for the product in the context of when they try to actually use them taking into account we don't expect that most people want to go through and read a full legal document >> senator nelson. >> thank you, mr. chairman yesterday, when we talked, i gave the relatively harmless example that i'm communicating with my friends on the facebook, and indicate that i love a certain kind of chocolate, and all the sudden, i start receiving advertisements for
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chocolate. what if i don't want to receive those commercial advertisements? so your chief operating officer, ms. sandberg, suggested on the nbc "today" show that facebook users who do not want their personal information used for advertising, might have to pay for that protection. pay for it are you actually considering having facebook users pay for you not using that information >> senator, people have a control how information is used in the product today if you want to have an experience where your ads are not targeted using the information we have available, you can turn off third party information.
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what we found is that even though some people don't like ads, people really don't like ads that are not relevant, and while there is some discomfort, for sure, with using information in making ads, more relevant, the overwhelming feedback that we get from our community is that people would rather have us show relevant content there than not. so we offer this control that you are referencing. some people use it it's not the majority of people on facebook. and i think that that is a good level of control to offer. what shesryl said in order to nt run ads at all, we still need some sort of business model. >> and that is your business model, so i take it that -- and i used the harmless example of chocolate, but if it got into a personal thing, communicating with friends, and i want to cut
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it off, i'm going to have to pay you in order not to send me using my personal information something that i don't want? that, in essence, is what i understand her to say, is that correct? >> yes, senator. although, to be clear, we don't offer an option today to pay for people not to show ads ad supported service is aligned with the mission to help connect everyone in the world. we want to offer a free service that everyone can afford that's the only way we can reach billions of people >> so, therefore, you consider my personally identifiable data, the company's data, not my data, is that it >> no, senator actually, the first line in our terms of service say that you control and own the information and content that you put on facebook >> well, the recent scandal is,
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obviously, frustrating, not only because it affected 87 million, but it's part of a pattern of lax data practice the going back for years. back in 2011, there was a settlement with the ftc, and now we discover yet another incident where the data was failed to be protected. when you discovered the cambridge analytica that fraudulently obtained all the information, why didn't you inform those 87 million? >> when we learned in 2015 that cambridge analytica had bought data from an app developer on facebook that people had shared it with, we did take action. we took down the app we demanded that both the app developer and cambridge analytica delete and stop using any data that they have.
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they told us that they did this. in retro spect, it was a mistake to believe them. we should have followed up and did the audit then >> you did that. you apologized for it, but you didn't notify them do you think you have an obligation to notify 87 million facebook users >> senator, when we heard back from cambridge analytica that they told us they were not using the data and deleted it, we considered it a closed case, but that was clearly a mistake we shouldn't have taken their word for it, and we've updated our policies and how we operate the company to not make that mistake again. >> did anybody notify the ftc? >> no, senator, for the same reason that we considered it a close case >> senator thune >> would you do that differently
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today, presumably, in response to senator nelson's question >> yes >> this may be your first appearance before congress, but it's not the first time that facebook has faced tough questions about its privacy policies "wired" magazine noted you have a 14-year history of apologizing for ill-advised decisions regarding privacy policy, similar to the one you made in the opening statement. after more than a decade of promises to do better, how is today's apology different, and why should we trust facebook to make the necessary changes to ensure user privacy and give people a clearer picture of your privacy policies >> thank you, mr. chairman so we have made a lot of mistakes in running the company. i think it's pretty much impossible, i believe, to start a company in your dorm room, and then grow it to be at the scale we are now without making some
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mistakes, and because our service is about helping people connect and information, those mistakes have been different in how they -- we try not to make the same mistake multiple times, but in general, mistakes are around each other because of the nature of the service. overall, i would say that we're going through a broader philosophical shift in how we approach our responsibility as a company. for the first 10 or 12 years of the company, i viewed our responsibility as primarily building tools that if we could put the tools in people's hands, then that would empower people to do good things. what i think we've learned now across a number of issues, not just data privacy, but also fake news and foreign interference in elections, is that we need to take a more proactive role and broader view of our responsibility it's not enough to just build tools. we have to be using them for good that means we have to now take a more active view in policing the ecosystem and in watching and
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looking out and making sure that all of the members in our community are using these tools in a way that's going to be good and healthy. so at the end of the day, this is going to be something where people will measure us by our results on this, and it's not that i expect that anything i say here today to necessarily change people's view, but i'm committed to getting this right, and i believe that over the coming years once we fully work all the solutions through, people will see real differences. >> well, and i'm glad that you all have gotten that message as we discussed in my office yesterday, the line between legitimate political discourse and hate speech is hard to identify, and especially when you rely on artificial intelligence and other technologies for the initial discovery. can you discuss what steps that facebook currently takes in making these evaluations, challenges you face, and examples of where you may draw the line between what is and what is not hate speech?
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>> yes, mr. chairman i'll speak to hate speech, and then i'll talk about enforcing our content policies more broadly. so, actually, maybe, if you're okay with it, i'm going in the other order. so from the beginning of the company in 2004, i started in my dorm room. it was me and my roommate. we did not have ai technology to look at content people were sharing, so we basically had to enforce our content policy reactively people shared what they wanted, and then if someone in the community found it offensive or against policies, they flagged it for us, and we looked at it reacti reactively now we have a.i. tools that identify certain classes of bad activity proactively and flag it for the team at facebook by the end of the year, by the way, we're going to have more than 20,000 people working on security and content review, working across all these things,
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so when content is flagged to us, we have those people look at it, and if it violates policies, we take it down. some problems lend themselves more easily to a.i. solutions than others. so hate speech is one of the hardest because determining if something is hate speech is very linguistically nuanced, right? you need to understand what is a slur and what -- whether something is hateful, not just in english, but people on facebook use it in languages that are different across the world. contrast that, for example, to an area of finding terrorist propagan propaganda, which we've been successful at employing ai tools on today, as we sit here, 99% of the isis and al qaeda content we take down on facebook, we flag before any humans see it that's a success in terms of rolling out a.i. tools that can proactively police and enforce
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safety across the community. hate speech, i'm optimistic that over a five to ten year period, we'll have ai tools that can get into the nuances, the linguistic nuances of different types of content to be accurate in flagging things for the systems, but today, we're just not there on that. a lot is reactive. it's flagged to us we have people look at it. wif po we have policies to make it not as subjective as possible, but until it's better, we have a higher error rate, which i'm happy with >> senator feinstein >> thank you, mr. chairman mr. zuckerberg, what is facebook doing to prevent foreign actors from interfering in u.s. elections? >> thank you, senator. this is one of my top priorities in 2018 is to get this right i -- one of my greatest regrets in the company is that we were slow in identifying the russian information operations in 2016 we expected them to do a number
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of more traditional cyber att k attac attacks, which we identified and notified the campaigns that they were trying to hack into them, but we were slow to identify the type of new information operations >> when did you identify new operations in. >> around the time of the 2016 election itself. since then, we -- 2018 is an incredibly important year for elections, not just the midterms, but around the world, there's elections in india, brazil, mexico, in pakistan, in hungary, we want to make sure we do everything we can to protect integrity of elections now, i have more confidence we will get it right because since 2016 elections, there's been several important elections in the world where we had a better record like the french presidential election, german election, u.s.-senate alabama special election last year >> explain what's better about the record >> so we've deployed new a.i. tools that do a better job
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identifying fake accounts to interfere in elections or spread information. between the flee elections, we were able to remove tens of thousands of accounts that before they contributed significant harm, the nature of these attacks, though, is that there are people in russia whose job it is to try to exploit our systems and other internet systems and other systems as well this is an arms race they are going to keep on getting better at this, and we need to invest on getting better at this too, which is why one of the things i mentioned before is we're going to have more than 20,000 people by the end of the year working on security and content review across the company. >> speak for a moment about automate ed bots that spread disinformation what are you doing to punish those who exploit your platform in that regard >> well, you're not allowed to have a fake account on facebook. your content has to be
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authentic, so we build technical tools to identify when people are creating fake accounts, especially large networks of fake accounts like the russians have, in order to remove all of that content after the 2016 election, our top priority was protecting the integrity of other elections around the world at the same time, we had a parallel effort to trace back to russia, the ira activity, the internet research activity, those part of the russian government that did this activity in 2016, and just last week, we were able to determine a number of russian media organizations sanctioned by the russian regulator were operated and controlled by this internet research agency. we took a big step last week of taking down sanctioned news organizations in russia as part of an operation to remove 270 fake accounts and pages as part of the broader network in russia that was actually not targeting
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international interference -- sorry, targeting misinformation in russia itself as well as russian speaking neighboring countries. >> how many accounts of this type have you taken down >> across -- in the ira specifically, the ones pegged back to the ira, we can identify 470 in the american elections and 270 we specifically went after in russia last week. there's many others our systems catch, which are more difficult to attribute specifically to russian intelligence the number is in the tens of thousands of fake accounts we remove, and happy to have the team follow up with you on more information if that's helpful. >> would you, please i think this is very important if you knew in 2015 that cambridge analytica was using the information of professor -- why didn't facebook ban
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cambridge in 2015? why did you wait >> senator, that's a great question they were not using our services in 2015 as far as we can tell. this is a question i asked the team as soon as i learned, why wait until we found out about the reports last month to ban them as of the time we learned of their activity in 2015, they were not an advertiser or running pages. we had nothing to ban. >> thank you thank you, mr. chairman. >> thank you, senator feinstein. now senator hatch. >> this is the most intense public scrutiny i've seen for a tech-related hearing since the microsoft hearing in the 1990s the recent stories about cambridge analytica and data mining on social media raise serious concerns about consumer privacy. i know you i understand that,
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but at the same time, these stories touch on the foundation of the internet economy and the way the websites that drive our internet economy make money. some professed themselves shocked, shocked that companies like facebook and google share user data with advertisers did any of the individuals stop to ask themselves why facebook and google don't charge for access nothing in life is free. everything involves tradeoffs. if you want something without having to pay money for it, you're going to have to pay for it in some other way, it seems to me, and that's what we are seeing here. these great websites that do not charge for access, they extract value in some other way. there's nothing wrong with that as long as they are up front about what they are doing. in my mind, the issue here is transparency it's consumer choice do users understand what they agree to when they access a
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website or agree to terms of service? are websites up front about how they extract value from users, or do they hide the ball consumers have the information they need to make an informed choice regarding whether or not to visit a particular website? to my mind, these are questions we should ask or be focusing on. now, mr. zuckerberg, i remember your visit to the hill in 2010, speaking to the high-tech task force that i chair and said back then that facebook would always be free. is that still your objective >> senator, yes. there will always be a version of facebook that's free. it's our mission to connect everyone around the world and bring the world closer together. in order to do that, we believe we need to offer a service everyone can afford, and we're committed to doing that. >> if so, how do you sustain a business model in which users do not pay for the service?
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>> senator, we run ads >> i see that's great whenever a controversy like this arises, there's a danger that congress's response would be to step in and overregulate now, that's been the experience that i've had in my 42 years here in your view, what sorts of legislative changes help to solve the problems to cambridge analytica story revealed, and what sorts of legislative changes would not help to solve this issue >> senator, there's a few categories of legislation that make sense to consider around privacy specifically, there's few principles i think it would be useful to discuss, and potentially codify into law. one is around having a simple and practical set of ways you explain what you are doing with data we talked earlier around the complexity of laying out these
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long privacy policies. it's hard to say that people, you know, fully understand something when it's only written out in a long legal document this stuff needs to be implemented in a way where people understand it where consumers understand it. but that can also capture all the nuances of how these services work in a way that is not overly restrictive on providing the services that's one the second is around giving people complete control. this is the most important principle for facebook every piece of content that you share on facebook, you own, and you have complete control over who sees it, and how you share it, and you can remove it at any time that's why every day about 100 billion times day people come to one of our services and either post a photo or send a message to someone because they know that they have that control and who they say it goes to is going to be who sees the content i think that that control is something that's important
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that, i think, should apply to every service. and third is enabling innovation some of the uses are very sensitive, and the balance to strike here where you obtain special consent for sensitive features like face recognition, but don't -- but that we still need to make it so that american companies innovate in those areas, or else we fall behind chinese competitors and others around the world with different regimes for different features like that. >> senator cantwell? >> thank you, mr. chairman welcome, mr. zuckerberg. do you know who palenter is? >> i do. >> some refer to them as stanford analytica
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do you agree >> senator, i have not heard that >> okay. do you think they taught cambridge analytica -- press reports say how to do these tactics? >> senator, i don't know >> do you think that they have scraped data from facebook >> senator, i'm not aware of that >> okay. do you think that during the 2016 campaign as cambridge analytica provided support to the trump campaign under project alamo, were there any facebook people involved in that in that sharing of technique and information? >> senator, we provided support to the trump campaign similar to what we provide to any advertiser or campaign who asks for it >> so that was a yes is that a yes? >> senator, can you repeat the
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specific question. i want to make sure i get specifically what you are asking >> in the 2016 campaign, cambridge analytica worked with the trump campaign to refine tactics. were facebook employees involved in that? >> senator, i don't know that our employees were involved with cambridge analytica, although i know we did help out the trump campaign overall in sales support in the same way we do with other campaigns >> so they may have been involved all working together in the time period? maybe that's something the investigation will find out. >> senator, i can have my team get back to you on any specifics there that i don't know sitting here today >> have you heard of total information awareness? do you know what i'm talking about? >> no, i do not. >> okay. total information awareness was a 2003 john ashcroft and others doing similar things to what i think is behind all of this, geopolitical forces trying to get data and information to
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influence a process, so when i look at palenter, what they are doing, and what's app, another acquisition, and i look at where you are from the 2011 consent decree and where you are today, i'm thinking, is this guy out foxing the foxes or is he going along with what is a major trend in the information age to harvest information for political forces and so my question to you is, do you see that those applications, that those companies, palenter and what's app, fall into the same situation you fell into over the last several years? i'm not sure specifically. overall, i do think that these issues around information access are challenging. to the specifics about those
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apps, i'm not really that familiar with what palenter does what's app collects little information, and i think is less likely to have the kind of issues because of the way the services are architected they are broad issues across the tech industry. >> well, i guess, given the track record where facebook is and why you are here today, i guess people would say they didn't act boldly enough, and the fact that people like john bolton basically was in an investor in a "new york times" article earlier, i guess last month, that bolton pac was obsessed how america became limp wristed and spineless, and the fact that there are a lot of people interested in this larger
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effort and what i think my constituents want to know, was this discussed at your board meeting, and what are the applications and interests that are being discussed without puttiput ing teeth into this. we don't want to come back to this i believe you have all the talent the question is do you have the will to help us solve the problem. >> yes, senator. data privacy and foreign interference in elections are certainly topics discussed in the board meetings these are the biggest issues the company faced, and we feel a huge responsibility to get these right. >> do you believe european regulation should be applied here in the u.s. >> senator, i believe everyone in the world deserves good privacy protection regardless of regulation, i guess it's somewhat different because we have different sensibilities in the u.s. as do
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other countries. we're committed to rolling out the controls and affirmative consent and the special controls and face recognition required in gdpr we're doing that around the world. but we go forward to implement that regardless of the regulatory outcome is. >> senator thune will chair. >> thank you thank you for being here my question is a follow-up on what senator hatch talked about, and let me agree with basically his advice we won't regulate to
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the point we are stifling innovation and investment, i understand with regards to suggested rules or suggested legislation there's two schools of thought out there one would be the isps, the internet service providers who advocate for privacy protections for consumers that apply to all online entities equally across the internet ecosystem now, facebook is an edge provider on the other hand it's my understanding edge providers, such as facebook, may not support that effort because edge providers have different business models than the isps and not considered like services, so do you think we need consistent privacy protections for consumers across the entire internet ecosystem that are based on the type of consumer information being
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collected, used, or shared, regardless of the entity doing the collecting or using or sharing? >> senator, this is an important question i would differentiate between isps, the pipes of the internet, and the platforms like facebook or google or twitter, youtube, that are the apps or platforms on top of that i think in general, the expectations that people have of the pipes are somewhat different from the platforms, so there might be areas where there needs to be more regulation in one and less in the other, but i think that they are going to be other places where there needs to be more regulation of the other type specifically, though, on the pipes, one of the important issues that i think we face and debated is - >> when you say "pipes," you mean >> isps. >> isps. >> yeah. net neutrality is a hotly debated topic, and one of the reasons i have been out there
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saying i think that should be the case is because i look at my story building facebook at harvard. i had one option if i paid extra to make my app seen or used by other people, then we wouldn't be here today >> talking privacy concerns, and we'll follow-up on this, but we agree this is going to be one of the major items of debate if we go forward and do this from a governmental standpoint. i have to move on to a couple other items. is it true that as was publicized, facebook collects the call and text histories of its users that use android phones >> senator, we have an app called messager for sending messages to facebook friends, and that app offers people an
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option to sync their text messages into the messaging app, and to make it -- basically, you can have one app where it has both your texts and your facebook messages in one place we also allow people the option of - >> you can opt in our out of that >> yes >> you can opt out >> it's opt in you have to affirmatively say you want to sync that information. >> unless you opt-in, you don't collect call and text history. >> that is correct >> is this practice done at all with miners, or do you make an exception there for person's age 13-17? >> i do not know we can follow up on that >> let's do that one other thing, there's been reports that facebook can track a users' internet browsing activity even after the user logged off of the facebook
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platform can you confirm whether or not this is true >> senator, i want to get this accurate so it's better to have the team follow up afterwards. >> you don't know? >> i know people use cookies on the internet and correlate activity between sessions. we do that for a number of reasons including security and including measuring ads to ensure the ad experiences are most effective, which, of course, people opt out of, but i want to be precise with the answer, so i have to follow up on that. >> get back to me, sir, would you also let us know how facebook discloses to its users that engaging in this type of track i tracking gives us that result? >> yes >> and thank you very much >> thank you, senator, and senator leahy is up next
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>> thank you senator, i assume facebook's been served subpoenas, is that correct? >> yes >> have you or anyone in facebook been interviewed by the special counsel's office >> yes >> have you been interviewed >> i have not. >> others have >> i believe so. i want to be careful here because that work is confidenti confidential, and we're in open session and i don't want to reveal anything that's confidential >> i just want to make clear you have been contacted and have had subpoenas. >> i have to clarify that, i'm not aware that there is a subpoenas, they may be, but i know we are working with them. >> thank you six months ago, your general counsel promises you were taking
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steps to prevent facebook for serving what i call an unwitting coconspirator in russian interference, but these -- these unverified pages are on facebook today. they look like a lot like a russian agency using to spread propaganda in the 2016 election. can you confirm whether they are a russian integrated group, yooyes or no? >> about those specifically? >> yes senator, last week, we announced a major change to the ads and pages policies where we verify the identity of every single advertiser >> specific ones, do you know where they are >> i'm not familiar with those pieces of content specifically >> if you decided this policy a week ago, you'd be able to verify them? >> we are working on that now.
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we verify identity of advertisers running a political or issue-related ad,basically what the act is proposing, and we're following that, and we're also going to do that for pages. >> names >> i'm not familiar with those specific cases >> will you find out the answer and get back to me >> i'll have the team get back to you i do think it's worth looking into the admins running large pages, although they do not buy ads in the system, it's harder for russian interdpeerns effofet to spread misinformation through the network. >> it's been going on for some time six months ago, i asked the general counsel about facebook's
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rules and breeding ground for hate speech against rohynga refugees recently, you blamed genocide in myanmar, and there's been genocide there, using ai to find this this is a type of content i'm referring to it calls for the death of a muslim journalist. now, that threat went straight through your detection system. it spread very quickly and then it took attempt after attempt after attempt in the involvement of civil society groups to get you to remove it why couldn't it be removed within 24 hours? >> senator, what's happening in myanmar is a terrible tragedy, and we need to do more - >> we all agree with that. >> okay. >> but you and your
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investigators blamed -- you blamed facebook for playing a role in the genocide we all agree it's terrible how can you dedicate and will you dedicate resources to make sure such hate speech is taken down wildfirethin 24 hours. >> yes we are working on this there's three specific things we are doing. one, we are hiring burmese language content for viewers hate speech is language specific and hard to do it without people who speak the local language, and we have to ramp up the effort there dramatically. second, we are working with civil society in myanmar to identify specific hate figures so we can take their their accounts rather than specific pieces of content, and, third, is we're standing up a product team to do specific product changes in myanmar and other countries that may have similar issues in the future to prevent this from happening. >> senator cruz and i sent a
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letter to apple asking what they'll do about chinese censorship the question i'll place for the record >> thank you >> i want to know what you'll do about chinese censorship when they come to you >> senator graham's up next. >> thank you are you familiar with andrew bosworth >> yes, senator, i am. >> he said, so we connect more people, maybe someone dies in a terrorist attack, coordinated on our tools. the ugly truth is we believe in connecting people so deeply that anything that allows us connect more people more often is de facto good do you agree with that >> no, senator, i do not as context, bos wrote that -- what we call him internally -- that was an internal note.
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we have a lot of discussion internally i disagreed with it at the time he wrote it. if you looked at the comment on the internet discussion, vast majority of people did too >> did you do a bad job as a ceo of communicating displeasure such thoughts because if he understood where you were at, he would have never said it to begin with >> well, senator, we try to run our company in a way where people express different opinions internally. >> this is an opinion that disturbs me, and if somebody that worked for me that said that, i'd fire them. who is your biggest competitor >> we have a lot of competitors. >> who is the biggest? >> i think the categories of -- do you want just one i don't know that i can give one, but can i give a bunch? >> uh-huh. >> there's three cat gegories i focus on, platforms like google, apple, amazon, microsoft >> do they provide the same service you provide?
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>> in different ways in different parts yes. >> if i buy a ford, it doesn't work well, i don't like it, i buy a chevy. if i'm upset with facebook, what's the equivalent product i can go sign up for >> oh, well, the second category that i was going to talk about -- >> i'm not talking about categories, but is there real competition you face because car companies face a lot of competition that they make a detective car, it gets out in the world, they stop buying that car and buy another one. is there an alternative to facebook in the private sector >> yes, snarenator the average american uses eight apps to communicate with friends and stay in touch with people. >> the same service you provide? >> we provide a number of services >> is twitter the same thing you do >> overlaps with what we do. >> you don't think you have a monopoly >> doesn't feel like that to me. [ laughter ] >> so it doesn't so instagram, you bought
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instagram. why did you buy instagram? >> because they were very talented app developers who were making good use of our platform and understood our values. >> it was a good business decision my point is that one way to regulate a company is through competition, through government regulation here's the question that all of us got to answer what do we tell our con stitch wents given what's happened here why we should let you self-regulate? what do you tell people in south carolina that given all the things we just discovered here, it's a good idea for us to rely upon you to regulate your own business practices >> well, senator, my position is not that there should not be no regulation i think the interpret is increasingly - >> you'd embrace regulation? >> the question is as the internet becomes more important in people's lives is what is the right regulation, not whether there should be or not >> you, as a company, welcome regulation >> if it's right, yes.
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>> do you think the europeans have it right? >> they get things right >> have you submitted -- [ laughter ] >> that's true so would you work with us in terms of what regulations you think are necessary in your industry >> absolutely. >> okay. would you submit to us proposed regulations? >> yes, and the team will follow up with you to have the discussion across categories where i think this discussion needs to happen. >> i look forward to it. when you sign up for facebook, you sign up for terms of service, are you familiar with that >> yes >> okay. it says the terms govern use of facebook and the products, features, apps, technologies, software we offer, facebook product or products except where we expressly state separate terms and not these apply. i'm a lawyer, no idea what that means. when you look at terms of service, this is what you get. do you think the average consumer understands what they are signing up for
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>> i don't think the average person likely reads that whole document, but there's different ways we can communicate that and have a responsibility to do so >> do you agree with me that you better come up with different ways because this ain't working? >> well, senator, i think in certain areas that is true, and i think in other areas like the core part of what we do, but think about just the most basic level, people come to facebook, instagram, what's app, messenger, about 100 billion times a day to share content or a message with a specific set of people, and i think that that basic functionality, people understand because we have the controls in line every time, and given the volume of the activity and the value that people tell us that they are getting from that, i think that that control in line does seem to be working fairly well. now, we can always do better, and there are other services that are complex and more to it than just, you know, go, and post a photo, and so i agree
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that in many places we can do better, but for the core of the service, it actually is quite clear. >> thank you, senator graham >> thank you mr. zuckerberg, we agree what happened here was bad. you acknowledged it was a breach of trust, and i explained it to my constituents if they break into my apartment with a crowbar and take my stuff, it's like if the manager gave them the keys or if they didn't have any locks on the doors, it's still a breach, it's still a break-in, and i believe we need to have laws and rules that are sophisticated as the brilliant products you developed here, and we just have not done that yet, and one of the areas i'm focused on is the election, and i appreciate this support that you and facebook and now twitter, actually, have given to the honest ads act bill that you mentioned i'm leading with senator mccain and senator warner i just want to be clear as we work to pass this law, so that we have the same rules in place to disclose political ads and
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issue ads as we do for tv and radio as well as disclaimers, that you're going to take early action as soon as june, i heard, before this election so that people can view these ads including issue ads, is that correct? >> that is correct, senator, and i just want to take a moment before i go into this more detail, thank you for jr. leadersh -- your leadership on this. this is an important area for the whole industry to move on. the two specific things that we are doing are, one is around transparency, so now you're going to be able to go and click on any advertiser or any page on facebook and see all of the ads that they are running. so that actually brings advertising online on facebook to an even higher standards than what you have on tv or print media because there's nowhere where you can see all of the tv ads that someone is running, for example, whereas you will be able to see now on facebook whether this campaign or third
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party is sending different messages to different people that's an important element of transparency the other important piece is around verifying every single advertiser running political or issue ads. >> appreciate that senator warner and i called on google and the other platforms to do the same, so memo to the rest of you, we have to get this done, or we're going to have a patchwork of ads, and i hope you'll be working with us to pass this bill, is that right? >> we will >> okay. thank you. now on the subject of cambridge analytica, were these people, the 87 million people, users, concentrated in certain states are you able to figure out where they are from? >> i do not have that information with me. >> but you can get it? >> we can follow up with the office >> okay. we know that election was close, and it was only thousands of votes in certain states. you also estimated that roughly 126 people -- million people may
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have been shown content from a facebook page associated with the internet research agency have you determined whether any of those people were the same facebook users whose data was shared with cambridge analytica? are you able to make that determination? >> we're investigating that now. we believe that it is entirely possible that there will be a connection there >> okay. that seems like a big deal as we look back at that last election. former cambridge analytica employee christopher wiley has said the data that it improperly obtained that cambridge analytica improperly obtained from facebook users could be stored in russia do you agree that's a possibility? >> sorry, are you asking if cambridge analytica's data is stored in russia >> that's what he said this weekend on a sunday show >> senator, i don't have any specific knowledge that would suggest that, but one of the steps that we need to take now is go to a full audit of all of cambridge analytica's systems to
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understand what they are doing, whether they still have any data, to make sure they remove the data, if not, we take legal action against them to do so that audit we have temporarily seeded that in order to let the u.k. government complete their government investigation first, because, of course, the government investigation takes precedence over a company doing that, but we are committed to completing this full audit and getting to the bottom of what's going on here so we can have more answers to this >> okay. you, earlier stated publicly and here, that you would support some privacy rules so that everyone's playing by the same rules here, and you also said here that you should have not y notified customers earlier do you support a rule that would require you to notify your users of a breach within 72 hours? >> senator, that makes sense to me, and i think we'd have a team
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to follow up with you on that to learn more >> i think when people don't know their data has been breached is a huge problem and we get to solutions faster when we get that information out there. thank you, and we look forward to passing this bill we'd love to pass it before the election on the honest ads, and looking forward to better disclosure in this election. thank you. >> thank you, senator, and senator blunt is up next >> thank you, mr. chairman nice to see you, mr. zuckerberg. i saw you not too long after i entered the senate in 2011 i told you when i sent my business cards down to be printed, they came back from the senate print shop with the message that was the first business card they'd ever printed a facebook address on. there are days when i regretted that, but more days when we get a lot of information that we need to get. there are days when i wonder if facebook friends is misdated i don't have those every single day. the platform you created is
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really important, and now my son, charlie, 13, is dedicated to instagram, so he'd want to be sure i mentioned him while here with you [ laughter ] i have not printed that on my card yet i will say that, but i think we have that account as well. lots of ways to connect people and the information, obviously, is an important commodity, and it's what makes your business work i get that however, i wonder about some of the collection efforts and maybe we can go through largely just even yes and no and get back to more expensive discussions of this, but do you collect user data through cross device tracking >> we link accounts between devices to ensure their facebook and instagram and other experiences are synced between devices. >> including offline data, data
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that's tracking that's not necessarily linked to facebook, but linked to one's device they went through facebook on, is that right >> senator, i want to make sure we get this right, so i want to have the team follow up with you on that afterwards >> it doesn't seem complicated to me. you understand better than i do, but explain to me why that's complicated. do you track devices that an individual who uses facebook has that is connected to the device they use for their facebook connection, but not necessarily connected to facebook? >> i'm not sure the answer to that question. >> really? >> yes there may be data that is necessary to provide the service that we do, but i don't -- i don't have that sitting here today, so that's something that we'd follow up on. >> the ftc last year flagged cross device tracking as one of their concerns
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generally that people are tracking devices that users like facebook don't know they are being tracked. how do you disclose your collected -- collection methods? all in this document that i see and agree to before i enter into a facebook - >> yes, sir. there's two ways to do this. we are exhaustive in the legal documents in terms of privacy policies, but more importantly, we try to provide in-line controls so that people -- that are in plain english that people request understand, that can either go to settings or we can show them at the top of the app periodically so people understand the controls and settings they have and can con figure their experience in the way they want. >> so do people now give you permission to track specific devices in their contract, and if they do, is that a new
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addition to what you do? >> senator, i'm sorry -- >> am i able to opt out or say it's okay for you to track what i'm saying on facebook, but i don't want you to track what i'm texting to somebody else off of facebook on an android >> oh, okay. yes, senator in general, facebook is not collecting data from other apps that you use there may be specific things about the device you are using that facebook needs to understand in order to offer the service, but if you are using google or you're using some texting app, unless you specifically opt-in that you want to share the texting app information, facebook wouldn't see that >> has it always been that way or is that a recent addition to how you deal with those other ways that i might community
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kate >> senator, my understanding is that that is how the mobile operating systems are architected. >> you don't have bundled permissions for how i can agree to what devices i may use that you may have contact with? do you bundle that permission or able to individually say what i'm willing for you to watch and what i don't want you to watch, and i think we may have to take that for the record based on everybody else's time. >> thank you, senator blunt. next up, senator -- >> thank you very much, mr. chairman are you comfortable sharing the name of the hotel you stayed in last night
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>> no. [ laughter ] >> if you messaged anybody this week, would you share with us the names of the people you messaged >> senator, no, i would probably not choose to do that publicly here >> i think that may be what this is all about your right to privacy, limits of right to privacy, and how much you give away in modern america in the name of, quote, connecting people around the world. question basically of what information facebook collects, who they send it to, and whether they asked me in advance permission to do that. is that a fair thing for a user of facebook to expect? >> yes, senator. i think everyone should have control over how their information is used. as we have talked about in some of the other questions, i think that that is laid out in some of the documents, but more importantly, you want to give people control in the product itself, so the most important
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way this happens across our services is that every day people come to our services to choose to share photos or send messages >> facebook down 4.5% into the close here, rallying strongly as mr. zuckerberg's testimony continues. shares of twitter up 5.5%. tech and trade are your themes of the day and tech lifted the markets late in the session, dow closed higher 426 points best performers were caterpillar and boeing after clear air from the chinese in terms of trade dispute last night 1.7 gain for the s&p, and nasdaq up better than 2% today. facebook helped that the russell 2,000 up 1.9%. now back to mark zuckerberg before congress. >> something that's called messenger kids
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facebook created an app that allows kids between the ages of 6-12 to send video and text messages through facebook as an extension of the parents' accounts, cartoon-like stickers and features designed to appeal to little kids, first graders, kindergartne kindergartners on january 30th, campaign for commercial free childhood and child development organizations warned facebook that put into a wealth of research demonstrating this use of social media is harmful to kids and argued that young children simply are not ready to handle social media accounts at age 6. in addition, there are concerns about data that's being gathered about these kids we know children's online privacy protection ads, but what guarantees can you give us that no data from messenger kids is or will be collected or shared with those that would violate the law? >> all right senator, so a number of things
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that i think are important here. the background of messenger kids is we heard feedback from thousands of parents that they want to be able to stay in touch with their kids and call them, use apps like facetime when they are working late or not around and want to communicate with their kids, but they want complete control over it we can all agree that when your kid is 6, 7, even if they have access to a phone, you want to control everyone who they can contact, and there was not an app out there that did that, so we built a service to do that. the app collects a minimum amount of information necessary to operate the service, so, for example, the messages that people send is something we collect in order to operate the service, but in general, that data is not going to be shared with third parties it's not connected to the broader facebook - >> excuse me, as a lawyer, i picked up on the phrase "in general," suggesting in some circumstances it's shared with
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third parties. >> no, it will not >> all right are you open to the idea someone reaching adult age growing up with messenger kids should be allowed to delete the data that you have collected >> senator, yes. as a matter of fact, when you become 13, which is our legal limit or limit -- we don't allow people under 13 to use facebook, you don't automatically go from having a messenger kids account to a facebook account. you have to start over to get a facebook account, so i think it's a good idea to consider making sure that all that information is deleted, and in general, people are starting over when they get their facebook or other accounts >> i'll close because i have a few seconds. illinois has a privacy act or the state does, which is to regulate the commercial use of facial, voice, finger, and iris scans and the like we're now in a debate on that, and facebook is in the position of carving out exceptions to that fill me in on how that's
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consistent with protecting privacy. thank you. >> thank you, senator durbin, senator cornen >> thank you for being here. i noticed in 2013 the montra of facebook moved fast. is that correct? >> i don't know when we changed it, but the montra is currently move fast with stable infrastructure that's a much less sexy montra >> sounds much more boring, but the question is, during the time it was facebook's motto to move fast and break things, you think some of the misjudgments, perhaps, his tamistakes admitteo here were as a result of the culture or attitude particularly in regards to personal privacy of information of your subscribers? >> senator, i do think we made mistakes because of that, but
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the broadest mistakes made here are not taking a broad enough view of our responsibility the move fast cultural value is more tactical around whether engineers can shift things and different ways we operate. i think the big mistake that we've made looking back on this is viewing our responsibility as just building tools rather than viewing our responsibility as making sure the tools are used for good >> i appreciate that because previously or earlier in the past, we've been told that platforms like facebook, twitter, instagram, and the like are neutral platforms and the people who own and run those for profit, and i'm not criticizing, doing something for profit in this country, but they bore no responsibility for the content
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you agree now that facebook and other social media platforms are not neutral but bear responsibility for the content >> i agree that we're responsibility for the content i think that there's -- one of the big societal questions that i think we're going to need to answer is the current framework we have is based on this reactive model that assumed there were not ai tools to proactively tell whether something was terrorist content or something bad so it naturally relied on requiring people to flag for the companyand the company needed reasonable action in the future, we'll have tools that are going to be able to identify more types of bad content, and i think there's moral and legal obligation questions that i think we'll wrestle with as a society about when we want to require companies to take action proactively on certain of those things, and when that gets in the way -- >> i appreciate that i have two minutes left to ask
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you questions. >> all right >> so you, interestingly, the terms of the -- what do you call it, terms of service is a legal document which discloses to your subscribers how their information is going to be used, how facebook is going to operate. but you concede and doubt that everybody reads or understands that legalese, those terms of service, so are you -- is that to suggest that the consent that people give subject to terms of service is not informed con acceptability, in other words, they may not read it, and even if they read it, they don't understand it? >> we have a broader responsibility than what the law requires, so - >> i appreciate that, but what i'm asking about in terms of what your subscribers understand in terms of how their data is going to be used but let me go to the terms of
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service under paragraph no. 2. you say you own all of the content and information you post on facebook. that's what you told us here today. a number of times. so if i choose to terminate my facebook account, can i bar facebook or any third parties from using the data that i've previously supplied for any purpose whatsoever >> yes, senator. if you delete your account, we should get rid of your information. >> you should or do? >> we do >> what about third parties you contracted with to use that underlying information perhaps to target advertising for the themselves you can't -- do you claw back this information as well, or does that remain in their custody? >> senator, this is a very important question and glad you brought it up. there's a common misperception about facebook that we sell data to advertisers
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we do not sell data to advertisers. >> you clearly rent it >> what we allow is for advertisers to tell us who they want to reach, and then when do the placement. if an advertiser comes to us and says, all right, i'm a ski shop, and i want to sell skis to women, then we might have sense because people shared skiing related content or were interested in that they shared whether they were a woman, and we show ads to the right people without that data exchanging hands and going to the advertisers. that's a very fundamental part how the model works in something that's misunderstood, so i appreciate that you brought that up >> thank you, senator. we indicated earlier on that we would take a couple breaks to give the witness an opportunity, and i think we've been going now for just under two hours, so i think -- >> we can do a few more. >> you want to keep going?
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maybe 15 minutes does that work >> we'll keep going. the senator is up next, we'll commence >> thank you, mr. chairman >> thank you, for being here today, mr. zuckerberg. you have told us today, and you've told the world that facebook was deceived by alexander when he sold user information to cambridge analytica, correct >> yes >> i want to show you the terms of service that alexander provided to facebook you noted that facebook was unnoted, he could sell user information. have you seen these terms of service before >> i have not. >> who in facebook was responsible for seeing those terms of service that put you on
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notice that that information could be sold? >> senator, our app review team would be responsible for that. >> has anyone been fired on that app review team? >> senator, not because of this. >> doesn't that term of service conflict with the ftc order that facebook was under at that very time that this term of service was, in fact, provided to facebook, and you'll note that the ftc order specifically requires facebook to protect privacy, isn't there a conflict there? >> senator, it certainly appears that we should have been aware that this app developer submitted a term that was in conflict with the rules of the platform >> well, what happened here was
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in effect willful blindness, heedless and reckless that amounted to a violation of the ftc consent decree would you agree? >> no, senator my understanding is that it's not that this was a violation of the consent decree, but as i said a number of times today, i think we need to take a broader view of our responsibility around privacy than just what is mandated in current laws >> here's my reservation, and i apologize for interrupting, but my time a limited. we've seen the apology tours before you have refused to acknowledge even an ethical obligation to have reported this violation of the ftc consent decree, and we've had letters and contacts with facebook employees, and i'm going to submit a letter for the
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record from sandy parachiles with your permission that indicates not only a lack of resources, but lack of attention to privacy, and so my reservation about your testimony today is that i don't see how you can change your business model and whether there's specific rules of the road, your business model is to monetize user information, to maximize profit over privacy, and unless there's specific rules and requirements enforced by an outside agency i have no assurance that these kinds of vague commitments are going to produce action i want to ask you a couple specific questions, and they are based on legislation that i
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offered, legislation that senator marquis is introducing today and that i'm joining don't you agree that companies ought to be required to provide users with clear, plain information about how their data will be used and specific ability to consent to use was information? >> senator, i generally agree with what you are saying, and i laid that out earlier when i talked about - >> would you agree to an opt-in opposed to an opt-out? >> senator, i think that that is certainly making sense to discuss and the details around this matter a lot. >> would you agree that users should be able to access all their information? >> senator, yes, of course >> all information you collect
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as a result of data brokers as well as tracking them. >> senator, we have already download your information tool allowing people to see and take out all information that facebook -- that they put into facebook or facebook knows about them yes, i agree with that we already have that >> i have a number of other specific requests about legislation, legislation is necessary, rules of the road have to be the result of congressional action we have facebook has participated recently in the fight against the scourge of sex trafficking and the bill we just passed will be signed into law tomorrow, stop exploiting sex trafficking act was result of our cooperation. i hope we can cooperate on this kind of measure as well. senator, i look forward to having my team work with you on
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this >> thank you, senator bloomenthal, senator cruz? >> do you consider a public forum? >> we consider ourselves a platform for all ideas >> does facebook consider itself a neutral forum and representatives of the company gave conflicting a ining on thi. first amendment speaker expressing views or neutral public forum allowing everyone to speak >> senator, this is how we think about this i don't believe that there's content we do not allow, hate speech, terrorist content, nudity, anything that makes people feel unsafe in the community. from that perspective, that's why we general ly refer to what we do. >> time is constrained it's just a simple question. the predicate for section 230 in
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the cda is you are a neutral public forum do you consider yourself a neutral public forum, engaged in political speech, your right under the first amendment. >> our goal is not to engage in political speech i'm not that familiar with the specific legal language of the law you speak to, so i would need to follow up with you on that i'm just trying to lay out how broadly i think about this >> mr. zuckerberg, there's a great many americans who i think are deeply concerned that facebook and other tech companies are engaged in a pervasive pattern of bias and political censorship there have been numerous instances with facebook in may of 2016, facebook had purposely and routinely suppressed stories from trending news, including stories about cpac, mitt romney, the lerner irs scandal and glenn
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beck in addition to that, facebook initially shut down the chick-fil-a appreciation day page, blocked a post of a fox news reporter, blocked over two dozen catholic pages and blocked trump supporters diamond and silks page with 1.2 million facebook followers determining their content and brand were, quote, unsafe to the community to many americans, that appears to be a pervasive pattern of political bias do you agree with that >> senator, let me say a few things about this. first, i understand where that concern is coming from because facebook in the tech industry are located in silicon valley, an extremely left leaning place, and this is actually a concern that i have and that i try to root out in the company is making sure that we don't have any bias in the work that we do, and i think it is a fair concern
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that people would -- >> so let me ask this. >> now - >> are you aware of any ad or page that has been taken down from planned parenthood? >> senator, i'm not, but let me just - >> how about move on - >> sorry >> >> not aware >> any democratic candidate for office >> i'm not specifically aware. i mean, i'm not sure >> in your testimony, you say you have 15,000 to 20,000 people working on security and content review do you know political orientation of those 15,000 to 20,000 people engaged in content review >> no, senator, we do not generally ask people about their political orientation when joining the company. >> so as ceo, have you made hiring or firing decisions based on political positions or what candidates they supported? >> no. >> why was palmer -- >> that's a specific personnel matter that seems like it's
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inappropriate -- >> you made a specific - >> i commit it was not because of a political view. >> do you know of the 15,000 to 20,000 people engaged in content review, how many, if any, ever supported financially a republican candidate for office? >> senator, i do not know that >> your testimony says it is not enough that we just connect people we have to make sure those connections are positive it says we have to make sure people are not using their voice to hurt people or spread misinformation we have a responsibility not just to build tools, but ensure tools are used for good. do you feel it's your responsibility to assess users whether they are good and positive connections or ones that those 15,000 to 20,000 people deem unacceptable or deplorable >> senator, you're asking me personally >> facebook. >> senator, i think that there are a number of things we all agree are clearly bad.
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foreign interference in elections, terrorism, self-harm. >> talking about censorship. >> you'd probably agree we should remove terrorist propaganda from the service. that i agree is clearly bad activity we want down and generally proud of how well we do with that now, what i can say, and i do want to get this in before the end here is that i'm very committed to making sure that facebook is a platform for all ideas. that is a very important founding principle of what we do we're proud of the discourse and different ideas that people with share on the service, and that is something that as long as i'm running the company, i'm going to be committed to ensuring is the case >> thank you >> thank you, senator cruz do you want a break now? [ laughter ] >> do you want to keep going >> sure, that was pretty good, so, all right. >> all right we have senator whitehouse up next, but if you want to take a five minute break right now.
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we have now been going a good two hours. >> thank you >> we'll recess for five minutes and reconvene. facebook's mark zuckerberg on capitol hill, day one of two, tomorrow before congress pressed by many there. while he was speaking, facebook shares actually rallied into the close. welcome, everybody, i'm kelly eviden evans on "closing bell," facebook closing higher 4.5% today, holing the broader markets too, rebound with the dow up 428 points there. the s&p adding about 43 points, and russell 2,000 up 28 or so, and the nasdaq was the best performer in percentage terms with a better than 1 or 2% gain here today there you can see some of the action on your screens facebook, as i said, helping the nasdaq twitter was higher, too, by about 5 partnersh.5%, and sociar lifting there into the close as zuckerberg spoke he gave up a little bit ground after hours. over to julia borsten following
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this for us. >> reporter: interesting, kelly, to watch zuckerberg. he kept his cool he didn't seem to break into a sui suite. there's interesting exchanges with the senators, very respectful, using "senator" repeatedly, saying he didn't know the answer to the question and he would have his team get back to the senators with specific detailed information. he was cognizant not speaking without being 100% sure about what he was saying, and throughout everything, he was reiterating he's open to regulation, and he, right now, me wants to go beyond what the law requires and is incredibly contri contrite, apologizing repeatedly saying it was a mistake not to be more proactive in being cognizant of the kinds of negative ways their tools could be used, so focused on making sure that they were creating tools that could have wonderful effects. they were not thinking about the potential downside there was some really interesting exchanges with the senators take a listen to this one.
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>> we want to offer a free office that everyone can afford. >> okay. >> that's the only way we reach billions of people >> so, therefore, you consider my personally identifiable data, the company's data, not my data, is that it >> no, senator actually, the first line of our terms of service say that you control and own the information and content you put on facebook. >> reporter: so in that exchange with nelson shows you an example of the kind of dynamic we have here we have senators saying are you really protecting my data, is it true you're really deleting data when you say you are, and zuckerberg saying yes, yes, we really are trying to uphold our terms of service and do the right thing when it comes to user data, and it was interesting when it came to questions about the ftc consent decrees and questions about whether facebook had violated
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these promises it made to the government years ago zuckerberg said we don't think we violated any of the commitments as part of the consent decree, and when they chose not to alert consumers or the ftc about the fact that data had been improperly sold to cambridge analytica back in 2014-15, zuckerberg said they did not report it because they thought it was a closed case he's trying to represent here someone with the best intentions and is trying to take control of his platform that has got out of control. interesting to see what's happening. now they are in a short break and will be back >> yeah. laughing if he wanted to break after tougher questions from senator cruz in the end, thank you, julia mike santolli is here for reactions and impact on the close. >> interesting i think the tone on both sides was probably welcomed to investors. first of all, i think the idea of having a founder and ceo in this place tells traders after a 20% drop in a stock, it might be more of a culminating event
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opposed to an exacerbating event. it was all building towards it >> after hours, on the screen there, as you talked, mike, down a third percent. >> back off a little bit >> it was 4.5% >> back to levels from three, four weeks ago this is just chopping around near the lows, but i think it was sort of no real outright hostility for the most part across the board for the members. >> would that have been different if cruz's question were in the trading session? >> i wonder if senators questions whether they were in violation of the ftc decree. >> had the toughest line of questioning. subtle one aspect, would you go for opt-in versus opt-out. that's a fundamental part of the structure of the ad business >> sharing data. >> the grand bargain is as soon as you sign up for facebook, you opted in right? so if you don't want to share data with advertisers, you have
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to specifically opt-out. he got at what they do with the laws is you have to consciously opt-in at a certain point to have data available to advertisers, changing the structure of the business. the fact zuckerberg said it was worth discussing is interesting. that was the most interesting give in that exchange. i think at the end of the day, they are not going to go for that >> would be silly to >> exactly right >> a game changer for them people that analyze this name would have to reevaluate they are worried about the head wan winds taking place, the tail winds that advertisers do not leave them if it was opt-in, that would be a game changer event in my opinion. >> all the sudden, it takes the amount of data you access down possibly substantially back to you, also, he was asked, mark zuckerberg was asked whether facebook was in violation of the consent decree from the ftc he says he does not see it that way.
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legitimate position to take? >> clearly, they have been consistent in saying that since the beginning, they don't think they violated the consent decree, 2011 decree. he's clearly been briefed by lawyers, right he's been briefed by counsel that says, no, there's a position we can take where we can say it did not violate we did not do anything wrong there. >> one more legal headline that came up. he did appear to say that they had been in touch with the special counsel's office what is the significance of that, do you think simply that in investigating the 2016 election that robert mueller's probe is in touch with facebook to see if there is a there there? >> they wanted more information, many data. you can see mark stopped short of saying, well, not me, personally, and i don't know about the subpoenas and how campaign dollars were spent. that's a big focus
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mueller's investigation. >> that was assumed already that in fact, that office was - >> you mentioned they are down 20% from the recent highs and tech wreck does this clear the way because of the rebound or see what happens the rest of not only today's session but before the house tomorrow >> we have the lingering president trump against amazon going on the market will respond to the stray tweets i don't think that the tech wreck is over but believe facebook took the tech wreck early so it would be the first to rebound, and as mike said, it is up from that 149 level recently, so i think they might be out of the woods themselves i don't think the group is out of the woods >> i think we have to kind of run this all through the earnings models for the long term, and that's not a process you can start yet. you know, zuckerberg and his group have been saying for a while now, look, we're going to be a less profitable company and spends a lot of money on a sustained basis on all these
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things i think the way it settles out ultimately look, it's not this kind of really huge momentum open field, we can go forever because we have massively growing data trove with advertisers who want all of it, but if the rules are the same for everybody, facebook is the most relevant. >> google was mentioned by a senator in the questioning >> just joining us it's a half hour after the close in the middle of a break now of mark zuckerberg's testimony before the senate today. the house piece of this follows tomorrow facebook shares, before he began at 2:15 p.m. eastern time, up a little less than 2%, closing at 4.5% twitter higher at 5.5% today you see in the broad markets, it was a positive close, nasdaq benter than 2% higher at the bell the dow, nice 428 point gain there, and quickly, trade lift as well. boeing and caterpillar led the way, of course, last night with
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comments from president xi in china that were softer than expected in the trade issue helping sentiment today. kayla is on capitol hill for us where, you know, everyone's pausing to take a breath right now. >> reporter: kelly, forgive me for looking over my shoulder here because we're in a break there's been a steady stream of senators coming out of the hearing room that's just on the other side of the wall here, steady stream of democratic senators critical of zuckerberg talking to reporters staked out here the questions from lawmakers in the hears ranged from basic questions about how facebook operates to disclosures and controls over privacy, but some of the toughest lines of questioning came from graham, republican senator from south carolina who essentially challenged zuckerberg to say facebook was not a monopoly and say facebook has true competitors that customers could switch to if they were unhappy with the products they were
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getting from facebook. zuckerberg listed a long list of competitors that he said did a portion of what facebook did, but couldn't say exactly who their biggest competitor was graham came out to reporters telling them he believes that facebook needed to be regulated and that the suggestions that he asked the company for to submit for their own self-regulation would need to be taken with a grain of salt, and he even went so far as to suggest maybe the european model would be a good starting point listen >> i think he made a good point that we're different, but i don't think we're so different that europe has regulations and we have none given what happened here, it's really hard to leave this space without some government oversight to ensure it does not happen again >> clearly har much commentary from a republican senator who wants to see regulation of
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facebook we'll see what happens when this hearing continues and who else we hear from in the next moment or so, kelly, back to you. >> thank you mark zuckerberg reentered the chamber to resume the testimony in a couple moments. he took also pointed question from senator dick durbin who said to mark zuckerberg, what hotel did you stay at last night, sir, and mark paused, no, i wouldn't, and durbin said, yes, there's things you want to keep private, and facebook ought to be the platform where that can be the case as well. senators will continue to question him in just a moment. they have been going for about two hour's time. we'll listen in. >> computing machinery public policy console and public knowledge. senator whitehouse >> thank you, chairman >> thank you mr. chairman, i want to correct one thing i said earlier in
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response to a question from senator leahy. he had asked if why we did not ban cambridge analytica at the time when we learned about them in 2015, and i answered that what my understanding was was that they were not on the platform or an app developer or advertiser when i went back and met with the team afterwards, they let me know that cambridge analytica actually did start as an advertiser later in 2015, so we could have in theory banned them then, making a mistake by not doing so, but i wanted to update that because i misspoke and got that wrong earlier >> senator white house >> thank you, senator. >> good news on -- we are back at headquarters with details, quickly, sue >> the telegraph is reporting that the british headquarters of murdoch entertainment has been raided by members of the
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european commission. it's understood that the watchdog which has authority to do that took various records from the headquarters, but at this point, we don't know why they did that, but the stock responded by moving to an intra-day low. keep in mind the murdoch is still trying to close the sky deal this does not come at an ideal time there was a raid in murdoch entertainment empire 21st century fox according to the daily telegraph. kelly, back to you >> all right, we'll keep you posted as we get more information, sue, thank you, back to mark zuckerberg. >> does he have a facebook account still? >> senator, i believe the answer to that is no, but i can follow up with you afterwards >> okay. with respect to cambridge analytica, your testimony is that first you required them to formally certify they deleted all improperly acquired data where did that formal certification take place
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that sounds kind of like a quasi-official thing to state. what did that entail >> senator, first, they sent us an e-mail notice from the chief data officer telling us that they did not have any of the data anymore, deleted it, and were not using it. later, we followed up with, i believe, a full legal contract where they certified that they had deleted the data >> in the legal contract >> yes, i believe so >> okay. >> and then you ultimately said that you have banned cambridge analytica. who exactly is banned? what if they opened up cranst cranston,cranston rhode island analytica, would that be banned >> that is the intent. they have a parent company
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we banned the parent company recently banned a firm called aiq, which i think is associated with them, and if we find other firms associated with them, they are blocked from the platform as well >> are individual principles, plas, principles of the firm, also banned? >> senator, my understanding is we're blocking them from doing business on the platform, but i do not believe we block people's personal accounts. >> okay. can any customer amend your terms of service or terms of take it or leave it for the average customer >> senator, i think terms of service are what they are, but the service is really defined by people because you choose what information you share and the service is about which friends you connect to and people you
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connect to >> question relates to, senator graham held up that big fat document easy to put a lot of things buried in the document that then later turn out to be of consequence, and all i wanted to establish with you is that that document senator graham held up is not a negotiable thing with individual customers that is a take it or leave it proposition to sign up for or not use the service? >> senator, that's on the terms of service, although, we offer a lot of controls, so people can configure the experience how they want. >> so, last question on a different subject having to do with the authorization process that you are undertaking for eve entities for political content or issue ad content. you said they have to go through an authorization process before they do it you said here we'll be verifying
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the identity how do you look behind a shell corporation and find who is behind it through your authorization process? step back. do you need to look behind shell corporations in other words to find out who is really behind the content that's being posted, and if you may need to look behind a shell corporation, how will you go about doing that and get back to the true what lawyers call beneficial owner of the site that is putting out the political material >> senator, are you referring to the verification of political and issue ads? >> yes and before that, political ads, yes. >> yes so what we're going to do is require a valid government identity and verify the location so we're going to do that, so that way someone sitting in russia, for example, couldn't say they are in america and therefore able to run the election ad. >> running through a corporation
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domicile, you wouldn't know they areactually a russian owner? >> senator, that's correct >> okay. thank you, time expired. i appreciate the curtesy of the chair for the extra seconds, thank you, mr. zuckerberg. >> thank you mr. chairman >> following up on statements made before the break minutes ago. you said there were categories of speech, types of content that facebook never want any part of, and takes active steps to avoid distributing like hate speech, nudity, racist speech, assumed you also meant terrorist acts, threats of physical violence, things like that beyond that, would you agree that facebook ought not be putting its thumb on the scale with regard to the content of speech, assuming it fits out of one of those categories that's prohibited >> senator, yes. there's generally two categories
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of content that we're worried about. one are things that could cause real world harm, so terrorism certainly fits into that, self-harm fits into that, i would consider election interference to fit into that, and those are types of things that we don't consider discussion around whether they are good or bad topics >> sure, i'm not disputing that, but asking once you get beyond those categories of things that are not prohibited and should be, is it facebook's position that it should not beputting its thumb on the scale, should not be favoring or disfavoring speech based on content and the viewpoint of that speech >> senator, in general, that's our position what we -- one of the things that are really important, though, in order to create a service where everyone has a voice, we also needs to make sure that people are not bullied or basically intimidated or the environment feels unsafe for them >> okay. so when you say "in general"
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that's the exception you refer to to the exception being that if someone feel es bullied, eve if it's not nudity or racist speech, you step in there, but beyond that, do you step in and put your thumb on the scale as far as the viewpoint of the content being posted >> senator, no in general, our goal is to allow people to have as much expression as possible >> okay. subject to the exceptions we've discussed, wyou would stay out let me ask you this. isn't there a significant free market incentive that a associate media company, including yours, has in order to safeguard the data of your users? don't you have free market in incentives senator, yes >> doesn't that align with those of us here who want to see data safeguarded? >> absolutely. >> do you have the technological
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means available at your disposal to make sure that that doesn't happen and to protect say an app developer from ferring dat to a third party >> senator, a lot we do and some requires outside our systems and needs new measures for example, what we saw here was people chose to share information with an app developer, which worked according to how the system was designed that information was transferred out of the system to servers this developer alexander had who chose to sell the data to cambridge analytica. that's going to require much more active intervention and auditing from us to prevent going forward because once it' out of our system, it's harder for us to have a full understanding of what's happening. >> from what you've said today and from previous statements made by you and other officials at your company, data is at the
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center of the business model, how you make money, your ability to run businesses esffectively, given you don't charge users, is based on monetizing data the issue, seems to me, really comes down to what you tell the public, what you tell users of facebook about what you're going to do with the data, about how you are going to use it. can you give two examples of ways in which data is collected by facebook in a way that people are not aware of two examples of tiecypes of data facebook collects that might be surprising to facebook users >> well, senator, i hope what we do with data is not surprising to people. >> has it been at times? >> well, senator, i think in this case, people certainly did
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not expect this developer to sell the data to cambridge analytica. in general, there are two types of data that facebook has. the vast majority, and the first category is content people chose to share on the service themselves, so that's all the photos that you share, posts you make, what you think of is the facebook service right? that's -- everyone has control every single time as they go to share it, you can delete the data any time they want. full control the majority of the data second category is around specific data that we collect in order to make the advertising experiences better and more relevant and work for businesses, and those often revolve around measuring, okay, if we showed you an ad, clicked through, and go elsewhere, we measure that you actually -- that the ad worked that helps make the experience more relevant and better for people who are getting relevant ads and better for businesses because they perform better. you also have control completely
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over the second type of data turn off the ability for facebook to collect that your ads get worse, so a lot of people don't want to do that, but you have complete control over what you do there as well >> senator >> thank you, mr. chairman i want to follow up on the questions around the terms of service. your terms of service are 3200 words with 30 lengths, and one is to the data policy, about 2700 words with 22 lengths, and i think the point has been well made that people really have no earthly idea what they are signing up for, and i understand that at the present time that's legally behinding, but wondering if you can explain to the billions of users in plain language what are they signing up for >> senator, that's a good and important question here. in general, you signed up for the facebook you get the ability to share the information that you want with people that's what the service is right? that you can connect with the
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people you want, and you can share whatever content matters to you, whether that's photos, links, or posts. you get control over who you share it with. take it down if you want, and don't put anything up in the first place if you don't worry >> what about the people worried not about the fun part >> well, what's that >> the part that people are worried about is that the data is going to be improperly used, so people are trying to figure out, are your dms informing the ads? are your browsing habits being collected? everybody understands when you click "like" on something or you like a certain movie or have a particular political proclivity that i think that's fair game, everybody understands that what we don't understand exactly because both as a matter of practice and not able to decipher terms of service in the privacy policy is what exactly
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are you doing with the data and do you draw a distinction between data collected in the process of utilizing the platform and that which we clearly volunteer to the public to present ourselves to other to be users >> senator, i'm not sure i fully understand this. in general, people come to facebook to share content with other people we use that in order to also inform how we rank services like news food and ads to provide a relevant experience. >> a couple specific examples. if i'm e-mailing within what's app, does that inform advertisers? >> no. we don't see any of the content in the app that's fully encrypted. >> right, but is there an algorithm spitting out information to the ad platform say i e-mail about black panther, do i get a black panther banner ad?
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>> senator, we don't -- facebook systems do not see the content of messages being transferred over the app >> i know. that's not what i'm asking i'm asking about whether these systems talk to each other without a human being touching it >> senator, i think the answer to your specific question is, if you message someone about black panther in the app, it would not inform any ads >> okay. i want to follow up on senator nelson's original question which was the question of ownership of the data, and i understand as a sort of matter of principle you say we want our customers to have more rather than less control over data, but i can't imagine it's true as a legal matter i actually own my facebook data because you're the one monetizing it. do you want to modify that to sort of express that as a statement of principle, sort of aspirational goal, but it doesn't seem to me that we own our data, otherwise we'd be getting a cut. >> well, senator, you own it in the sense that you choose to put it there
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take it down any time, and you completely control terms under which it's used. when it's on facebook, you granted us a license to show other people i mean, that's necessary in order for the service to operate. >> right so the -- you're definite of ownership is, i sign up, i volud i may delete my account if i wish, but that's basically it? >> well, senator, i think that the control as much more granular than that you can choose each photo that you want to put up or each message. and you can delete those and you don't need to delete your whole account you can specific control you can share different posts with different people nrchlts the time i have left i want to propose something to you and take it for the record i read and article this week by professor jack balkin at yale that proposes a fiduciary in the economic sense, but this is really about a trust relationship like doctors and lawyers.
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tech companies should hold in trust our personal data. are you open to the idea of information fiduciary sh statute? >> i think it's an idea. and jack is very thoughtful in this space i do think it deserves consideration. >> thank you, mr. chairman thank you, mr. zuckerberg for being here today i appreciate your testimony. the full scope of facebook users' activity can print a very personal picture, i think. additionalle you have those two billion users that are out there every month. and so we all know that's larger than the population of most countries. so how many data categories do you store? does facebook store? on the categories that you collect? >> senator, can you clarify what you mean by data categories?
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>> well, there's some past reports that have been out there that indicate that facebook collects about 96 data categories for those 2 billion active users that's 192 billion data points that are being generated, i think, at any time from consumers globally so how many do you -- does facebook store out of that do you store any >> senator, i'm not actually sure what that is referring to >> on the points that you collect information, if we call those categories, how many do you store of information that you are collect iing? >> senator, the way i think about this is there are two broad categories this probably doesn't line up with whatever the specific report you were seeing is, and i
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can make sure we follow up with you afterwards to get you the information you need on that the two broad categories that i think about is content that a person has chosen to share and they get complete control over, when they put it into the service, when they take it down, who sees is it then the other category are data that are connected to making the ads relevant you have complete control over both you can turn off the data related to ads you can choose not to sha re any content or take down the content in the former category >> does facebook store any of that >> yes >> how much do you store of that all of it? all of it? everything we click on is that some storage somewhere >> senator, we store data about what people share on the service and information that's required to do ranking better, to show you what you care about in newsfeed. >> do you store text history,
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user content, activity, device location >> senator, some of that content with people's permission we do store. >> do you disclose any of that >> yes senator, in order for people to share the information with facebook, i believe that almost everything that you just said would be. >> and the privacy setting, it's my understanding that they limit the sharing o that data with other facebook users is that correct? >> senator, yes. every person gets to control who gets to see their content. >> and does that also limit the ability for facebook to collect and use it >> senator, yes, there are other -- there are controls that determine what facebook can do as well. so for example, people have a
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control about face recognition if people don't want us to be able to help identify when they're in photos that their friends upload, they can turn that off then we won't store that kind of template for them. >> and there was some action taken by the ftc in 2011 and you wrote a facebook post at the time on a public page that it used to feel scary to people, but they felt safe sharing with their friends online control was key. you just mentioned control senator hatch asked you a question and you responded there about complete control so you and your company use that term repeatedly.
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and you do have complete control over this information? >> senator, this is how this service works. i mean, the core thing that facebook is and all of our services, instagram, messenger. >> so is this then a question of facebook is about feeling safe or are users actually safe is facebook being safe >> senator, i think facebook is safe i use it my family use it all the people i love and care about use it all the time. these controls are not just to make people feel safe. it's actually what people want in the product the reality is that when you -- just think about how you use this yourself. you don't want to share -- like you take a photo you aren't always going to send that to the same people. sometimes you want to text it to one person, sometimes you send it to a group. i bet you have a page. you put stuff out there publicly to communicate with
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constituents there are groups of people people may want to connect with and those are the operation of the service, they're not just to build trust, although providing people with control also does that, but actually in order to make it so that people can fulfill their goals with the service. >> thank you, chairman grassley, thank you mr. zuckerberg for joining us today the whole reason we're having this hearing is the attention between two basic principles you laid out the data that people post on facebook, you control the data that you post on facebook. you said optimistic things about privacy and data wnership, but it's the reality that facebook is a for-profit entity that generated $40 billion in ad revenue last year by targeting ads. in fact, facebook claims that advertising makes it easy to find the right people, capture their attention an get results and you recognize that an ad-supported service is, as you said earlier today, best aligned with your mission and values but the reality is there's a lot
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of examples where ad targeting has led to results that i think we would all disagree with or dislike or would concern us. but you've already admitted that facebook's own ad tools allowed russians to target users, voters based on racist or anti-muslim or anti-immigrant views and that may have played a significant role in the election here in the united states. just today "time" magazine posted that wildlife photographers are being used for trafficking illegal animal parts. like diet pill manufacturers targeting teenagers who are struggling with their weight or allowing a liquor distributor to target alcoholics or a gambling organization to target those with gambling problems i'll give you one concrete example. i'm sure you're familiar with. p pro. public ka said that advertisers
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let them sclus by race in real estate advertising there was a way that you could say that this particular ad i only want to be seen by white folks, not by people of color. and that clearly violates fair housing laws and you promptly announced that was a bad idea, that you would change the tools and build a new system to spot and reject discriminatory ads that violate fair housing a year later propublic ka said that those changes hadn't been made and it's still possible to do that in a way that was rashle diskrim discriminato discriminatory but the reality of how facebook has operated in the real world are in persistent attention. several senators have asked about the 2011 ftc consent decree to protect user pry vas
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and there are f were things brought to your attention, where facebook has apologized and yet there doesn't seem to be as much follow-up as would be called for. at the end of the day, policies aren't worth the paper they're written on if facebook doesnenf them an experience i had today as an avid facebook user i woke up this morning and was notified by a whole group of friends across the country asking if i had a new family or if there was a fake facebook post of chris coons. i went to the one, it had a different middle initial than mine and there was my picture with senator dan sullivasullivas family a whole lot of russian friends dan sullivan has a very attractive family. >> keep that for the record, mr. chairman >> the friends who brought this to my attention including people i went to law school with in hawaii and our own attorney general in the state o


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