Facebook (FB) is starting the week in much the same way it ended last week: Facing scrutiny over how it handles disinformation, and blow back from angry investors.
Sen. Mark Warner (D., Va.), ranking member of the Senate Intelligence Committee, has circulated a policy paper with 20 options for cracking down on technology giants such as Facebook for the spread of disinformation, protecting consumers’ privacy, and promoting competition in the tech industry.
“The size and reach of these platforms demand that we ensure proper oversight, transparency and effective management of technologies that in large measure undergird our social lives, our economy, and our politics,” according to a copy of the paper obtained by Barron’s. “The hope is that the ideas enclosed here stir the pot and spark a wider discussion—among policymakers, stakeholders, and civil society groups—on the appropriate trajectory of technology policy in the coming years.”
The policy paper, first reported by Axios, would make tech companies assume greater responsibility for their members’ personal data by forcing them to eliminate fake accounts, label “bots” posing as people, and tamp down anonymous posts.
It’s unlikely any of the policies will make their way through Congress as long as Republicans are in control of both chambers. But should Democrats ride a blue wave in the 2018 midterm elections to a majority in the House or Senate, that could change.
A Facebook spokesman declined comment on Warner’s paper.
Facebook Chief Executive Mark Zuckerberg has repeatedly warned investors the company will spend heavily to burnish security and safety that could negatively impact its bottom line. Facebook is on a hiring binge to boost its security ranks to 20,000 by the end of the year, raising capital expenditures. The company disabled 583 million fake accounts during the first three months of this year—the majority of which were blocked within minutes of registration, according to Facebook’s new Community Standards Enforcement Report. Some 694 million fake accounts were spiked in the last three months of 2017.
“I’m confident we will get it right,” Zuckerberg said in a conference call following its quarterly earnings last week, despite “sophisticated, well-funded adversaries.”
Investors didn’t share Zuckerberg’s optimism: They torched Facebook’s shares 24% in after-hours trading July 25 after it reported second-quarter revenue came up short of analyst estimates and user growth slowed. Guidance also disappointed.
Facebook shares are down 4% in mid-afternoon trading today, to $168.
The tumble slashed $120 billion from the company’s market capitalization, sparking a handful of investor lawsuits from law firms in New York, Pennsylvania, and Louisiana. Meanwhile, some shareholders have demanded that Zuckerberg relinquish his additional title as chairman.
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