Facebook Deals with Criticism, Marketers Mull Over Options

In a conference call with reporters, Facebook chief executive/chair Mark Zuckerberg defended his company against charges that he and chief operating officer Sheryl Sandberg hid problems regarding Russian interference and other issues. Politicians have discussed opening a federal investigation into possible campaign finance violations and creating competition laws to curb the company, while shareholders have called for Zuckerberg’s ouster and activists have complained to the Federal Trade Commission.

The New York Times reports that much of the outcry “followed a NYT article that raised questions on Wednesday about Facebook’s tactics in dealing with disinformation and other problems on its site, as well as the way it treats competitors and opponents.” Since Facebook was accused of playing a role in influencing the 2016 presidential election in favor of Donald Trump, the company has “faced a succession of crises.”

“Facebook cannot be trusted to regulate itself,” said representative David Cicilline (D-Rhode Island), the top Democrat on the House antitrust subcommittee. “This staggering report makes clear that Facebook executives will always put their massive profits ahead of the interests of their customers.”

The earlier NYT article describes how Zuckerberg and Sandberg “passed off many critical security and policy decisions in recent years and delayed responses to abuse on Facebook or played down its significance.” To defend itself, Facebook even hired opposition research firm, Definers Public Affairs, “to discredit protesters by trying to link them to George Soros, the liberal financier.”

The company’s board admitted that the two executives “responded slowly to Russian interference” on the site but added that it was “grossly unfair” to accuse them of willfully ignoring or preventing investigations into Russian interference. Zuckerberg “acknowledged missteps, including the use of Definers Public Affairs,” but said he was “not willing to step down as chairman.”

According to another NYT article, “several top marketers were openly critical of the tech giant” after the newspaper’s initial report, which also “spotlighted a lobbying campaign overseen by Sandberg, who also oversees advertising, that sought to shift public anger to Facebook’s critics and rival tech firms.”

Publicis Groupe chief growth officer Rishad Tobaccowala deemed these revelations as possibly “the straw that breaks the camel’s back.”

“Now we know Facebook will do whatever it takes to make money,” he said. “They have absolutely no morals.” Advertisers have complained in the past about placement of their ads and how the company measures them, but “the lure of Facebook’s vast audience” has been strong.

Industry trade group 4A’s chief executive Marla Kaplowitz pointed out that, “agencies can make recommendations, but marketers need to decide at what point is this going to be a liability for them.” Few have left thus far. At GroupM, which represents the media-buying arm of WPP, senior adviser Rob Norman suggested that, “Facebook should establish an ombudsman role to assess its societal risks, with reports in its regular financial filings.”

“The business should be obliged to report its risk to society versus just financial risks to the business,” he said. Simulmedia founder/chief executive Dave Morgan noted that, “what I hear most are brands saying that time for just talking is over: ‘It’s no longer about what Facebook says, it’s about what they do and what they stop doing’.”

With Facebook at ‘War,’ Zuckerberg Adopts More Aggressive Style, The Wall Street Journal, 11/19/18
Damage Control at Facebook: 6 Takeaways From The Times’ Investigation, The New York Times, 11/14/18
New York Times Update, Facebook, 11/15/18
Facebook Says it Removed 1.5 Billion Fake Accounts in the Past 6 Months, VentureBeat, 11/15/18
Washington Pummels Facebook: ‘Big Tech Can No Longer Be Trusted’, Recode, 11/15/18
The Millionaire Funding the Campaign to Break Up Facebook, Axios, 11/15/18
‘I Don’t Really Want to Work for Facebook.’ So Say Some Computer Science Students, The New York Times, 11/15/18

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