Frances Haugen likens Facebook to an ‘oil spill’ as she testifies to Parliament.
Beginning a European tour, the former Facebook manager was questioned by policymakers planning tougher tech regulations.
Frances Haugen’s testimony in Britain’s Parliament on Monday is the start of a European tour, which will include discussions with government officials in Brussels, Paris and Berlin.Credit…T.J. Kirkpatrick for The New York Times
British policymakers heard testimony on Monday from the former Facebook manager who became a whistle-blower and shared scores of internal documents with policymakers, regulators and journalists to help build a case for stiffer oversight of the social media giant.
Frances Haugen, the former employee, spoke before a Parliament committee as part of her tightly choreographed campaign to reveal internal Facebook research and discussions that paint a portrait of a company vividly aware of its harmful effects on society, contrary to public statements by company leaders.
Here are some highlights from the session:
In the opening moments of her testimony, Ms. Haugen likened Facebook to an “oil spill” and said government officials must act quickly to avoid more damage. “I came forward because now is the time to act,” she said.
Ms. Haugen said more transparency is needed from Facebook, which she said presented a false picture of its efforts to delete hate speech and other extreme content. The company says artificial intelligence software catches more than 90 percent of hate speech, but Ms. Haugen said the number was less than 5 percent.
“They are very good at dancing with data,” she said.
Ms. Haugen urged policymakers to reduce Facebook’s use of “engagement-based rankings,” the process by which its algorithm amplifies some content more than others based on how much other Facebook users interact with it through “likes,” shares and other metrics.
Such a system, Ms. Haugen said, prioritizes and amplifies polarizing and extreme content. “Anger and hate is the easiest way to grow on Facebook,” she said.
Facebook puts “growth over safety,” Ms. Haugen said, particularly in areas of Africa, Asia and the Middle East where the company does not have language or cultural expertise and where the platform has exaggerated divisions among users.
She said events in countries such as Ethiopia and Myanmar, where Facebook has been accused of contributing to ethnic violence, were the “opening chapters of a novel that is going to be horrific to read.”
John Nicolson, a member of the committee from Scotland, described receiving homophobic abuse online. He said it was just one example of the problems caused by social media. He cited an internal study from Facebook revealed by Ms. Haugen that found that 13 percent of surveyed British teenagers connected a desire to commit suicide to Instagram.
He asked: “Is Facebook evil?”
“I cannot see into the hearts of men,” Ms. Haugen responded.
Even for Facebook, a company that has lurched between controversies since Mark Zuckerberg started it as a Harvard undergrad in 2004, Ms. Haugen’s disclosures have created a backlash and public relations crisis that stands apart. It has put the company on the defensive, helping attract political support for new regulation in the United States and Europe and leading to some calls for Mr. Zuckerberg to step aside as Facebook’s chief executive.
The testimony in Britain on Monday is part of the next phase of Ms. Haugen’s campaign against Facebook, a company that she says has put “profit over people.” After anonymously leaking internal Facebook research to The Wall Street Journal that resulted in a series of articles that began in September, she revealed her identify early this month for an episode on “60 Minutes” and testimony before a Senate committee. The documents, which include slide decks, internal discussion threads, charts, memos and presentations, have also been shared with the Securities and Exchange Commission.
Since then, she has shared the Facebook materials with other news organizations, including The New York Times, resulting in additional stories about Facebook’s harmful effects, including its role in spreading election misinformation in the U.S. and stoking divisions in countries such as India.
Ms. Haugen is now making a tour across Europe, home to some of the world’s most aggressive tech regulation and where governments are expected to act faster than the United States to pass new laws targeting Facebook and other tech giants. After testifying before British lawmakers, Ms. Haugen is scheduled to meet in the coming weeks with officials in Brussels, Paris and Berlin. She is also scheduled to speak at an industry conference in Lisbon.
“For all the problems Frances Haugen is trying to solve, Europe is the place to be,” said Mathias Vermeulen, the public policy director at AWO, a law firm and policy firm that is among the groups working with Ms. Haugen in the United States and Europe.
British policymakers are hearing Ms. Haugen’s testimony as they draft a law to create a new internet regulator that could impose billions of dollars worth of fines if more isn’t done to stop the spread of hate speech, misinformation, racist abuse and harmful content targeting children.
The policy ideas gained additional momentum after the murder this month of David Amess, a member of Parliament, leading to calls for the law to force social media companies to crack down on extremism.
Later this week, representatives from Facebook, Google, YouTube, Twitter and TikTok are scheduled to testify before the same British committee as will Ms. Haugen.
In Brussels, Ms. Haugen is scheduled to meet on Nov. 8 with European Union officials drafting laws that would force Facebook and other large internet platforms to disclose more about how their recommendation algorithms choose to promote certain material over others, and impose tougher antitrust rules to prevent the companies from using their dominant positions to box out smaller rivals. European policymakers are also debating a ban on targeted advertising based on a person’s data profile, which would pose a grave threat to Facebook’s multibillion-dollar advertising business.
Despite growing political support for new regulation, many questions remain about how such policies would work in practice.
Regulating Facebook is particularly complex because many of its biggest problems center on content posted by users all over the world, raising difficult questions about the regulation of speech and free expression. In Britain, the new online safety law has been criticized by some civil society groups as being overly restrictive and a threat to free speech online.
Another challenge is how to enforce the new rules, particularly at a time when many government agencies are under pressure to tighten spending.
By The New York Times
For weeks, Facebook has been shaken by revelations that have ignited a firestorm of criticism from lawmakers, regulators and the public.
Reports by The Wall Street Journal from research documents provided by a whistle-blower put Facebook under a microscope. Those reports showed how Facebook knew Instagram was worsening body image issues among teenagers, among other issues.
The whistle-blower, Frances Haugen, went public during an interview on “60 Minutes” in early October. On Oct. 5, Ms. Haugen testified before a Senate subcommittee for more than three hours. She said Facebook had purposely hidden disturbing research about how teenagers felt worse about themselves after using its products and how it was willing to use hateful content on its site to keep users coming back. In her testimony, she encouraged lawmakers to demand more documents and internal research, suggesting the documents she had provided were just the tip of the iceberg.
After Ms. Haugen testified, executives publicly questioned her credibility and called her accusations untrue. But internally, they tried to position their stances to hang on to the good will of more than 63,000 employees and assuage their concerns.
Reporters have since covered more internal documents from the company, which owns Instagram and WhatsApp in addition to the core Facebook social network. Documents about Instagram, for instance, reveal a company that is struggling with retaining, engaging and attracting young users.
Other documents raise questions about Facebook’s role in election misinformation and the pro-Trump attack on the Capitol on Jan. 6. Company documents show the degree to which Facebook knew of extremist movements and groups on its site that were trying to polarize American voters before the election. Employees believed Facebook could have done more, according to the documents.
In India, Facebook’s biggest market, the problems are bigger, too. Internal documents show a struggle with misinformation, hate speech and celebrations of violence. Dozens of studies and memos written by Facebook employees provide stark evidence of one of the most serious criticisms levied by human rights activists and politicians against the world-spanning company: It moves into a country without fully understanding its potential impact on local culture and politics, and fails to deploy the resources to act on issues once they occur.
The latest revelations, published on Monday morning, show internal research that undercuts the heart of social networking — “likes” and sharing — that Facebook revolutionized. According to the documents, researchers determined over and over that people misused key features or that those features amplified toxic content, among other effects. In an August 2019 internal memo, several researchers said it was Facebook’s “core product mechanics” — meaning the basics of how the product functioned — that had let misinformation and hate speech flourish on the site.
Hertz, the car rental agency, said on Monday that it had placed an order for 100,000 Teslas, a sign of growing momentum in the shift to electric vehicles.
By the end of next year, when the Tesla order is completed, electric vehicles will make up more than 20 percent of Hertz’s global vehicle fleet, the company said.
Hertz said it was teaming up with football quarterback Tom Brady to promote its E.V. offerings in a marketing campaign.
“Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest,” Mark Fields, Hertz’s interim chief executive, said in a news release. “The new Hertz is going to lead the way as a mobility company, starting with the largest E.V. rental fleet in North America and a commitment to grow our E.V. fleet and provide the best rental and recharging experience for leisure and business customers around the world.”
The company did not disclose the value of the deal. Bloomberg, which reported the news before the announcement, said the order would generate about $4.2 billion of revenue for Tesla, suggesting Hertz was paying close to face value for the vehicles. Car rental firms typically demand deep discounts for large vehicle orders.
Hertz customers will be able to rent a Tesla Model 3 in some major markets in the United States and Europe starting in early November. The company also said it planned to install thousands of chargers at its locations.
“While Hertz is in the early stages of electrifying its rental car fleet, Tesla getting an order of this magnitude highlights the broader E.V. adoption underway in our opinion as part of this oncoming green tidal wave now hitting the U.S.,” Dan Ives, an investor analyst at Wedbush, said in a research note.
Hertz filed for bankruptcy in May 2020, falling victim to mounting debt and a devastating blow to its business caused by the coronavirus pandemic. But the quick economic and travel recovery provided a lifeline, setting off a bidding war for the company. Hertz emerged from bankruptcy in June, just as travel started to surge in the United States because of widespread availability of coronavirus vaccines.
The bankruptcy proceeding allowed the company to shed much of its debt, freeing it to invest in modernizing its fleet. The last few months have also been good for car rental firms in general, which sold off vehicles to survive the early stages of the pandemic but were unable to rebuild their fleets as quickly because of the chip shortage that has held back auto making. That constraint on supply, combined with a travel surge, has pushed up rental car prices and use.
After months of its stock trading in the less-restricted over-the-counter market, Hertz this month also announced plans to list its shares on Nasdaq. Hertz’s share price rose 8 percent on the news, and Tesla’s was up about 7 percent in early trading.
FaZe Clan, the e-sports conglomerate, announced on Monday that it planned to join the public markets in a deal that involves merging with a special purpose acquisition company, or SPAC, which would value it at about $1 billion.
Founded in 2010, FaZe Clan is an influencer marketing agency, e-commerce company and e-sports team all in one. (The company’s chief executive, Lee Trink, once described it as “Dallas Cowboys meets Supreme meets MTV.”) It will be one of the first prominent e-sports companies to go public — and it’s likely to draw attention from the retail traders who helped fuel the SPAC frenzy.
Mr. Trink is a former Hollywood entertainment manager who worked with Kid Rock. The company’s 85 influencers, who live together in its California gamer compound, produce viral social media clips, compete in professional gaming leagues for money and accolades and foster a devoted fan base. FaZe has built on that following by starting an online store and branded merchandise and signing advertising deals with the likes of Burger King.
SPACs are blank-check companies that go public first with the goal of finding a private company to merge with. These can be a way for smaller companies to go public by allowing them to bypass the traditional regulatory scrutiny that comes with initial public offerings.
“We didn’t spend that much time really ideating on a traditional I.P.O. strategy,” Mr. Trink said in an interview, noting that a SPAC deal allows FaZe Clan to talk about future opportunities as it prepares to go public, while a traditional I.P.O. would not.
FaZe, which isn’t profitable, brought in about $38 million in revenue last year and expects to report more than $50 million this year. Mr. Trink said FaZe would use the SPAC to “double down” on content.
“This is the beginning of gaming’s further ascent into the cultural zeitgeist,” he added.
The $176 billion video game industry exploded during the pandemic, although some worry sales may slow as the pandemic eases. E-sports is expected to become a billion-dollar business this year; already, the e-sports team Evil Geniuses received an investment from China’s Fosun Sports Group that valued it at more than $250 million.
PayPal, the digital payments giant, said late on Sunday that it was not interested in buying the social media network Pinterest, ending efforts to draft a potential $45 billion deal that would have been one of the biggest consumer internet takeovers in a decade.
In a brief statement, PayPal said it was “not pursuing an acquisition of Pinterest at this time.”
A transaction would have been among the biggest ever by PayPal since being spun off from eBay in 2015 and would have bolstered its presence in e-commerce. Pinterest is best known for allowing its 454 million users to pin images and links to their online pinboards and letting them buy goods directly through so-called “buyable pins.” Pinterest largely makes money through advertising instead of online shopping.
PayPal had offered $70 for each share of Pinterest, according to people with knowledge of the discussions, a 25 percent premium to where the digital pinboard’s stock had been trading before news of the talks emerged last week.
Investor reaction to a potential deal was mixed. Shares in Pinterest jumped on the news, while those in PayPal tumbled sharply.
Pinterest has performed well over the last year, with its revenue rising nearly 50 percent in 2020 because of a pandemic-fueled jump in online shopping. But some analysts questioned the logic of a deal and suggested the talks underscored PayPal’s difficulties with tougher competition in its core digital payments business.
Russia is putting in place perhaps the world’s most ambitious digital censorship effort outside China. It is using the censorship technology to gain more leverage over Western internet companies in addition to other strong-arm tactics and legal intimidation.
The world got its first glimpse of Russia’s new tools in action when Twitter was slowed to a crawl in the country this spring. It was the first time the filtering system had been put to work, researchers and activists said. Other sites have since been blocked, including several linked to the jailed opposition leader Alexei A. Navalny. READ THE ARTICLE ->
Stocks on Wall Street rose in midday trading Monday ahead of the release of a string of Big Tech earnings reports this week. The S&P 500 was up 0.5 percent, while the Nasdaq composite ticked up 0.9 percent.
Facebook is the first among the tech giants expected to announce its results this week, with its report due after the close of trading on Monday. The release comes the same day as Frances Haugen, a former Facebook employee who has leaked internal Facebook research, testified before Britain’s Parliament as part of her campaign to attract political support for new regulation in the United States and Europe.
Microsoft, Twitter and Alphabet will release their quarterly reports on Tuesday. Amazon and Apple will release their financial performance reports on Thursday.
Tesla shares gained about 9 percent after Hertz, the car rental agency, said on Monday that it had placed an order for 100,000 Teslas.
PayPal rose 4.1 percent in midday trading after the digital payments giant said on Sunday that it was not interested in buying the social media network Pinterest. Shares of Pinterest fell about 12 percent. Last week, shares of PayPal dropped after reports that it offered to buy Pinterest in a deal that valued the site at $45 billion.
Economists are also watching the development of President Biden’s infrastructure and social spending plans. To pay for the package, billionaires could be taxed on unrealized capital gains on their liquid assets, including stocks and real estate, Democratic officials said on Sunday. The move comes amid a dispute to raise the corporate tax rate to 28 percent from 21 percent.
Facebook earnings: The company is set to publish its financial performance report for the three months that ended in September. Investors are looking for any signs that recent privacy changes in Apple’s iOS mobile operating system, preventing tracking by some advertisers, hurt Facebook’s ad business.
Facebook whistle-blower: Frances Haugen, who once worked at Facebook, is expected to testify before the British Parliament. The testimony opens her European tour to meet with policymakers pushing for tougher regulation of Silicon Valley giants. Ms. Haugen is scheduled to visit Paris, Berlin and Brussels.
Twitter earnings: Investors will look for any clues about whether Twitter will miss revenue expectations because of Apple’s privacy changes. Twitter’s shares slumped after Snap, the parent company of Snapchat, reported lower-than-expected revenue on Thursday.
Google earnings: Alphabet, Google’s parent company, will report its financials for its third quarter. In July, the company reported a profit of $18.5 billion for the second quarter, more than it made in all of 2015.
Boeing earnings: Investors will be looking for an update on how quickly Boeing can resolve production issues with the 787 Dreamliner and start delivering the wide-body jet. The company announced in July that it would temporarily slow production of the model after identifying new work that needed to be done.
Auto earnings: Ford Motor and General Motors will report their financials for the most recent quarter. Investors will be looking at how a global chip shortage affected both companies’ profits. Ford has already reported that sales of new vehicles in the United States fell about 27 percent in the three months that ended in September.
G.D.P.: The Commerce Department will publish data on gross domestic product in the United States. Economists will look for evidence that supply-chain disruptions and labor shortages are constraining the recovery and prompting inflation.
Amazon earnings: Investors will be looking for whether Amazon’s sales continued to decelerate as businesses opened in the three months that ended in September.
Apple earnings: The company will report its financial performance for its fourth quarter, and investors will be watching for the effects that supply chain snarls have had on Apple’s production ahead of the holiday season.
E.C.B. meeting: Christine Lagarde, the European Central Bank’s president, may offer some insight on when the bank will scale back its bond-purchase programs. Officials are also expected to provide their outlook on inflation.
Oil earnings: Investors will find out whether Exxon Mobil and Chevron benefited from a global energy crunch that pushed oil prices up to seven-year highs. The report captures the period when Hurricane Ida damaged oil platforms and infrastructure in the Gulf of Mexico in late August.
When will the shortages end? Why are new cars so hard to find? What happened to all the giant container ships?
In an era in which we’ve become accustomed to clicking and waiting for whatever we desire to arrive at our doors, we have experienced the shock of not being able to buy toilet paper, having to wait months for curtains and needing to compromise on the color of our new cars. The pandemic ushered in many of the problems the world now faces, but the end of the pandemic will not instantly fix things.
We answer the questions above and more with a look at the global supply chain. READ THE ARTICLE ->