Zuckerberg survived but Facebook still has problems

The CEO stuck to his message during nearly five hours of testimony, but senators of both parties kept raising the specter of regulation.

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WASHINGTON — A composed and contrite Mark Zuckerberg held up under hours of grilling by more than 40 senators Tuesday — but his performance did little to mask Facebook’s growing political problems in Washington.

The 33-year-old billionaire CEO, appearing before Congress for the first time, was clearly well-prepared, according to crisis communications experts who watched his nearly five hours of testimony about the company’s privacy crisis and the leaking of its data to the firm Cambridge Analytica. And investors delivered an immediate positive review of his time under the lights, with Facebook’s stock price rising nearly 5 percent during the hearing.

Zuckerberg, who’s set for a House appearance Wednesday, answered questions on everything from user privacy to Russian election meddling to tech addiction, showing confidence at times as he parried with senators Tuesday.

“You don’t think you have a monopoly?,” Sen. Lindsey Graham (R-S.C.) asked incredulously. Zuckerberg responded, “It certainly doesn’t feel that way to me,” eliciting a few laughs in the packed Senate chamber.

But Graham’s follow-up question pointed to the long-term threat facing Facebook, as he and several other senators of both parties kept returning to a common theme — that the time is coming for federal regulators, antitrust enforcers or Congress to start throwing limits on a powerful company that holds sensitive data on more than 2.2 billion people.

“Here’s the question that all of us got to answer: What do we tell our constituents, given what’s happened here, why we should let you self-regulate?” Graham asked.

Sen. Richard Blumenthal (D-Conn.), a former federal prosecutor, challenged Zuckerberg on how he can maintain that Facebook hasn’t violated a 2011 privacy settlement it reached with the Federal Trade Commission. Sen. Ted Cruz (R-Texas) pressed him on why Facebook, which conservatives have accused of political bias, should continue to receive federal protection from liability for content its users post.

And Sen. John Kennedy (R-La.) made it clear he was not at all mollified by Zuckerberg’s repeated apologies.

“I don’t want to have to vote to regulate Facebook, but by God I will,” Kennedy said.

Antitrust action or tougher, European-style data laws are probably still not an immediate danger for Facebook in a federal government dominated by anti-regulation Republicans — one bill Zuckerberg endorsed, S. 1989 (115), which would require more disclosure for online political ads, is still expected to face tough sledding in Congress.

But Democrats have already been seething about the revelation that data on more than 87 million Facebook users ended up in the hands of a firm aligned with President Donald Trump. And Tuesday’s hearing made it clear that at least some Republicans are willing to join them in considering government intervention in the tech sector, a trend that may prove ominous for the industry if control of the Capitol flips in November.

Senate Commerce Chairman John Thune (R-S.D.) said the Cambridge Analytica furor has changed his and other lawmakers’ thinking about how to deal with Silicon Valley.

“In the past, many of my colleagues on both sides of the aisle have been willing to defer to tech companies’ efforts to regulated themselves,” Thune said. “But this may be changing.”

Thune pointed to a recently passed bill that makes tech companies liable for sex-trafficking facilitated by their platforms — a rare carve-out to a 1996 law that allows online companies to escape liability for user-posted content. That was “a wake-up call for the tech community,” he said, implying it may not be the last.

The critique was bipartisan. “We’ve heard you apologize numerous times and promise to change, but here we are again,” said Sen. Maggie Hassan (D-N.H.).

Bryant Madden, a director in the Washington office of the communications firm Levick, said lawmakers’ pointed questions about Facebook’s underlying business model — collecting data on its 2.2 billion users and then using that information to allow advertisers to target ads with precision — suggest real trouble for the company.

“Though Zuckerberg’s presentation was successful, there are remaining questions about whether the underlying message was successful,” Madden said in an interview. “Zuckerberg did a good job mitigating damage from this hearing, but the core issue is not going away.”

Communications experts still gave Zuckerberg style points for his Hill appearance, which showed few signs of the nervousness he displayed during his CNN interview three weeks ago. He repeatedly addressed the lawmakers with a deferential “Senator,” they noted, and he used an old public-speaking trick of referring to a small, odd number of important points. (“There are three things that I want to focus on,” said Zuckerberg in one response.)

The senators seemed to struggle with the nuances of the data-driven internet in ways that took the heat off Zuckerberg. In one exchange, Sen. Orrin Hatch (R-Utah) asked Zuckerberg how the company manages to make money.

“We sell ads, senator,” Zuckerberg said.

But one expert in the art of congressional hearings said Zuckerberg might not be so lucky when he appears Wednesday for round two on Capitol Hill, this time in front of the House Energy and Commerce Committee.

“Most members [of the House] are younger and a bit more technologically savvy,” said Mark Harkins, a longtime Hill staffer who now runs a congressional hearing prep course at Georgetown University. “Also, they have sharper elbows.”