Facebook Co-Founder Calls for Government to Break Up Mark Zuckerberg’s Empire

Facebook co-founder Chris Hughes has called for the empire he helped Mark Zuckerberg to assemble to be broken up by the government. Taking it a step further, Hughes argues that the government should regulate big tech and control “acceptable speech” on social media. In an op-ed published in the New York Times titled “It’s Time to Break Up Facebook,” Facebook co-founder Chris Hughes called for further government regulation of the very social media platform that he helped to launch. Hughes states that despite not working at Facebook for more than 15 years, he feels a sense of “anger and responsibility” following Facebook’s recent privacy scandals. Hughes states that although he believes that Facebook CEO Mark Zuckerberg is a good person, he has become increasingly worried over decisions made by Facebook and Zuckerberg in recent years. Hughes writes: Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook’s board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares. Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered. He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it. Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks. I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them.

Hughes then states that government intervention is the key to protecting user privacy across Facebook, stating: The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar. After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change. We are a nation with a tradition of reining in monopolies, no matter how well intentioned the leaders of these companies may be. Mark’s power is unprecedented and un-American. It is time to break up Facebook.

Hughes doesn’t just want to break up the company, however, he wants the creation of an entirely new agency designed to regulate tech firms. Hughes argues this agency should also regulate free speech: Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy. The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time. The agency should also be charged with guaranteeing basic interoperability across platforms. Finally, the agency should create guidelines for acceptable speech on social media. This idea may seem un-American — we would never stand for a government agency censoring speech. But we already have limits on yelling “fire” in a crowded theater, child pornography, speech intended to provoke violence and false statements to manipulate stock prices. We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.

https://www.breitbart.com/tech/2019/05/09/facebook-co-founder-calls-for-government-to-break-up-mark-zuckerbergs-empire/

Facebook rejects co-founder call for breakup, senator urges U.S. antitrust probe

WASHINGTON (Reuters) - Facebook Inc quickly rejected a call from co-founder Chris Hughes on Thursday to split the world’s largest social media company in three, while lawmakers urged the U.S. Justice Department to launch an antitrust investigation. Facebook has been under scrutiny from regulators around the world over data sharing practices as well as hate speech and misinformation on its networks. Some U.S. lawmakers have also pushed for action to break up big tech companies as well as federal privacy regulation. “We are a nation with a tradition of reining in monopolies, no matter how well intentioned the leaders of these companies may be. Mark’s power is unprecedented and un-American,” Hughes, a former college roommate of Facebook Chief Executive Mark Zuckerberg, wrote in a lengthy New York Times opinion piece.

Facebook’s social network has more than 2 billion users across the world. It also owns WhatsApp, Messenger and Instagram, each used by more than 1 billion people. Facebook bought Instagram in 2012 and WhatsApp in 2014. Facebook rejected Hughes’ call for WhatsApp and Instagram to be made into separate companies, and said the focus should instead be on regulating the internet. Zuckerberg will be in Paris on Friday to meet with French President Emmanuel Macron to discuss internet regulation.

“Facebook accepts that with success comes accountability. But you don’t enforce accountability by calling for the break up of a successful American company,” Facebook spokesman Nick Clegg said in a statement. “Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet. That is exactly what Mark Zuckerberg has called for.” U.S. Senator Richard Blumenthal, a Democrat, told CNBC on Thursday he thinks Facebook needs to be broken up and that the Justice Department’s antitrust division needs to begin an investigation. Antitrust law makes such a proposal tough to execute because the government would have to take the company to court and win. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being the two biggest examples.

Hughes co-founded Facebook in 2004 at Harvard with Zuckerberg and Dustin Moskovitz. He left Facebook in 2007, and has said in a LinkedIn post that he made half a billion dollars for his three years of work. “It’s been 15 years since I co-founded Facebook at Harvard, and I haven’t worked at the company in a decade. But I feel a sense of anger and responsibility,” Hughes said in the New York Times piece. Hughes also suggested Zuckerberg should be held responsible for privacy and other lapses at the company. “The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive,” he said.

https://www.reuters.com/article/us-facebook-cofounder/facebook-rejects-co-founder-call-for-breakup-senator-urges-u-s-antitrust-probe-idUSKCN1SF1HR?il=0

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Seven banks face EU antitrust fines for forex rigging: sources

BRUSSELS (Reuters) - Barclays, Citigroup, HSBC, JPMorgan and three other banks are set to be fined by EU antitrust regulators in coming weeks for rigging the multi-trillion dollar foreign exchange market, two people familiar with the matter said. The other three lenders are Royal Bank of Scotland, UBS and a small Japanese bank, the people said. The banks will see a 10 percent cut in their fines for admitting wrongdoing. In contrast, Credit Suisse, which has previously said it did not find any evidence of misconduct, is fighting the EU antitrust charge. It is not clear if the European Commission will be able to finalize the case in time to levy a fine against the Swiss bank in coming weeks. The EU antitrust enforcer, which has been investigating the case over the last six years and could hand out fines up to 10 percent of a company’s global turnover for breaching EU rules, declined to comment. Barclays, Citigroup, JPMorgan, Royal Bank of Scotland and HSBC declined to comment.

It is possible the EU could space out its rulings against the banks over several weeks rather than lump them together in one day, the sources said. Barclays, BNP Paribas, Citigroup, JPMorgan, Royal Bank of Scotland and UBS have entered related guilty pleas in a U.S. case, and been collectively fined more than $2.8 billion. U.S. regulators said the foreign exchange rate rigging was allegedly done through chat rooms with such names as “The Cartel,” “The Mafia” and “The Bandits’ Club,” through tactics with such names as “front running,” “banging the close,” “painting the screen” and “taking out the filth.”

https://www.reuters.com/article/us-eu-antitrust-banks/seven-banks-face-eu-antitrust-fines-for-forex-rigging-sources-idUSKCN1SF1VJ?il=0

Explainer: What would it take for U.S. regulators to break up Facebook?

WASHINGTON (Reuters) - Facebook Inc co-founder and Mark Zuckerberg’s former college roommate Chris Hughes urged U.S. regulators to break up the social media company in a New York Times opinion piece on Thursday. But antitrust law makes such a proposal tough to execute because the government would have to take the company to court and win. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being the two biggest examples. Hughes’ call to split Facebook from WhatsApp and Instagram followed a March pledge by U.S. Senator Elizabeth Warren, who is running for the Democratic presidential nomination for the 2020 election, to break up big tech companies.

Facebook rejected Hughes’ call for a breakup. “Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet. That is exactly what Mark Zuckerberg has called for,” Nick Clegg, Facebook’s vice president of global affairs and communications, said in an emailed statement. What is Hughes’ argument? Hughes called for the Federal Trade Commission, working with the Justice Department, to force Facebook to undo its purchases of Instagram in 2012 and WhatsApp in 2014. He said the three could become separate publicly traded companies. Facebook CEO Mark Zuckerberg and other Facebook executives would be required to divest management shares. Hughes’ criticisms of Facebook focused on its massive power over speech, and the fact that it was a tool that Russia used to manipulate U.S. voters in 2016 with false news reports. He also expressed concern that Zuckerberg had outsized power in such a dominant firm, saying: “Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks.”

How could a breakup happen? To force a company to break up, the government would have to file a lawsuit demonstrating that the firm has market power in the industry and that the deal has hurt consumers by pushing up prices or reducing product quality. This could be particularly hard in the case of Facebook or other technology companies, especially those that provide a free service to users. “The case law as it stands today would make the structural breakup of any of these companies very challenging,” an antitrust expert based in Washington said. It is rare for the government to seek to break up an existing company, but it has been done.

Famously, the United States sued to break up Standard Oil, accusing it of being an abusive monopoly. The case was fought all the way to the Supreme Court, which ruled in 1911 that the company should be broken up. In 1974, the U.S. government filed an antitrust lawsuit against AT&T Corp because it had a monopoly on telephone lines. After eight years of litigation, the two sides reached a settlement that led to AT&T giving up control of its regional operating companies, or Baby Bells. Perhaps the most famous case is the government’s effort to break up Microsoft. The Justice Department won a preliminary victory in 2000 but was reversed on appeal. The case settled with Microsoft intact. There are recent examples with smaller companies. The Justice Department forced consumer review website Bazaarvoice Inc to undo a 2012 merger with rival PowerReviews in 2014. The FTC this week won a victory in trying to break up a merger of two prosthetic knee makers: Otto Bock HealthCare North America, Inc and Freedom Innovations. An administrative law judge ruled in its favor on May 6.

What about privacy issues? U.S. lawmakers are also considering privacy legislation that would weaken companies like Facebook by reducing the amount of personal user data they control, thus reducing their value to advertisers. Senator Mark Warner, a Democrat, said in April that the was considering legislation that would focus on data portability, so users of one social media could take their information from one site to another.

How powerful is Facebook?

Congress held a series of hearings last year looking at the dominance of major tech companies, including their considerable political heft. Facebook has huge global reach, with 1.56 billion users daily as of March. It had 37,700 full-time employees as of the end of March spread around offices in 20 U.S. cities and dozens more around the world. Tech companies are among the biggest U.S. political donors. Google spent $21 million to lobby in 2018 while Amazon spent $14.2 million and Facebook spent $12.62 million, according to their filings to U.S. Congress.

https://www.reuters.com/article/us-facebook-cofounder-breakup-explainer/explainer-what-would-it-take-for-u-s-regulators-to-break-up-facebook-idUSKCN1SF261

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