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Facebook’s Zuckerberg faces Congressional grilling on Libra — latest news

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Via Financial Times

Zuckerberg hears talk of breaking-up Facebook, within minutes of sitting down

The FT’s Kiran Stacey reports

Amazingly, Maxine Waters seemed to suggest in her opening statement that Facebook had opened discussions into breaking itself up. She told the committee: “You have opened up a serious discussion about whether Facebook should be broken up.”

It is possible she knows something we do not — she met Mr Zuckerberg separately on Tuesday for a private meeting. But Facebook company sources tell me they are not sure what she is referring to and that the company will “go to the mat” to prevent a breakup.

House Committee chair Maxine Waters delivers opening statement

The FT’s Hannah Murphy reports from Washington

And we’re off! Maxine Waters, chair of the House Financial Services Committee, kicks off proceedings by arguing that Facebook needs to focus on addressing “existing deficiencies and failures” before launching a big project like Libra.

She also slams Facebook’s recent highly contentious decision to exempt politicians’ content and adverts from fact checking – something that’s likely to come up more than once today. This will allow politicians to “lie and mislead…the American people” using the platform, while raking in advertising funds for the company, she argres.

“The impact of this will be a massive voter suppression effort that will move at the speed of a click. Your claim to promote freedom of speech, does not ring true Mr Zuckerberg,” she says.

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Zuckerberg takes his seat

The Facebook founder, decked out in a white shirt under a dark suit and tie, has taken his seat before the House Committee, with testimony to begin shortly.

Beyond crypto

The FT’s tech correspondent Hannah Murphy writes

It’s not just Libra. Mr Zuckerberg will also face questions on whether Facebook’s business model sufficiently prevents discrimination.

Several months ago, the US Department of Housing and Urban Development charged the company with violating housing law — for allowing advertisers to use its targeting tools to limit minorities and protected groups from viewing real estate adverts.

Facebook was taken aback at the time because it had just announced plans to overhaul its targeting practices as part of a separate settlement with civil rights advocates. Facebook is now fighting the HUD charges, so Mr Zuckerberg is likely to double down on defending their position – which appears to be ‘we’ve already solved it’.

Perhaps handily, Mr Zuckerberg has been on a charm offensive in recent days: on Tuesday, the company announced it was committing $1bn to “help address the affordable housing crisis” in California.

Separately, Mr Zuckerberg on Monday announced a raft of measures for better tackling disinformation and foreign interference targeting elections on the platform.

Crowd turns out for Zuckerberg testimony

The FT’s Kiran Stacey reports from Washington

Here in Congress, interest in Mr Zuckerberg’s testimony is high. The queue for public admission to the session snakes around the vast corridors of the Rayburn office building and several camera crews have set up position outside.

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Facebook shares hold up in morning trade

Facebook shares are sitting 0.9 per cent higher within the first half-hour of trade in New York on Wednesday.

They are outperforming the broader S&P 500 and Nasdaq Composite, which are each up 0.1 per cent.

Facebook shares are up just over 40 per cent in 2019.

Facebook needs help to launch Libra, analyst says

Facebook’s cryptocurrency project will not survive without the backing of other technology and payments groups, according to one analyst.

Dan Ives, a tech analyst at Wedbush, said Mark Zuckerberg’s prepared testimony ahead of his appearance on Capitol Hill suggests the company will be flexible on the timing of Libra’s launch amid regulatory scrutiny and after several partners backed out.

“Realistically, it is unlikely Facebook can succeed without partner support, as the company lacks the infrastructure to handle a project of this magnitude in our opinion,” Mr Ives wrote in a note to clients.

Some major backers have already withdrawn their support for the Libra project and regulators have voiced concerns that Libra could pose a risk to the global financial system and make it more difficult to combat money laundering.

Mr Ives called today’s congressional testimony “another hurdle the company and Zuckerberg must get over to get this project closer to a launch trajectory in 2020”.

Bitcoin price on the back foot

There is already a dour mood in cryptocurrency markets on Wednesday ahead of Mark Zuckerberg delivering testimony on Facebook’s digital currency, Libra.

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The price of bitcoin, the most well-known cryptocurrency, has shed 5.4 per cent in the past hour alone, to $7,485.08, according to Coinbase. Rival Ethereum has shed 1.6 per cent to $159.62, while Bitcoin Cash has dropped 3.2 per cent over the same time period.

Zuckerberg gets candid on crypto ahead of Congressional hearing

Facebook chief executive Mark Zuckerberg is expected to half-wave the white flag on the company’s cryptocurrency plans as he testifies before the House Financial Services Committee this afternoon.

In candid comments on Tuesday Mr Zuckerberg said the social-media group is in a poor position to promote the Libra project and keen to hand over leadership to an association of its partners.

However, he did launch a strong defence of the idea, arguing it is crucial to tackle financial access issues around the world and help maintain America’s financial leadership.

The remarks come as the planned digital currency has lost key financial industry partners, including Mastercard, Visa and eBay.

Today’s Libra horoscope

Welcome to the Financial Times’ live blog of Mark Zuckerberg’s testimony to the House Financial Services Committee, which will the see Facebook founder address issues around the company’s Libra cryptocurrency project and alleged discriminatory advertising on the social media platform.

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