Transcripts For CSPAN2 Facebook Co-Founder Mark Zuckerberg Testifies Before House Financial... 20240713

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] the committee will come to ord order. [inaudible conversations] [inaudible conversations] [inaudible conversations] without objection the chair is authorized to declare recess of the committee at any time. This hearing is entitled an examination of facebook and its impact on the Financial Services and housing sectors. I now recognize myself for five minutes to give an Opening Statement. Today we are here to examine the act of facebook on the Financial Services and housing sectors. Our sole witnesses the facebook chairman and ceo, Mark Zuckerberg. Facebooks plan to create a Digital Currency, libra, and a digital wallet raised many concerns relating to privacy, trading risks, discrimination, opportunities for diverse owned financial firms, National Security, Monetary Policy and the stability of the Global Financial system i and other democrats have called for a moratorium on facebooks development of the Digital Currency and digital wallets until congress can examine the issues associated with the Big Tech Company developing the Digital Products and to take action it would be beneficial for all his facebook concentrates when addressing this many existing deficiencies and failures before proceeding any further on the libra project. Lets review the record. First on diversity and inclusion facebook has failed at the executive sand workforce continue to be mostlyin white ad male. The representation of african seamerican and hispanic is increaseds by less than 2 and facebook also told us that they have 0 managed by diverse firms. And the alliance for enabling advertisers to engage in discrimination on its advertising platforms that u. S. Department of housing and urban development filed a charge of discrimination against facebook for its advertising practices including the companys own ad delivery algorithms which were found to have a discriminatory impact when advertisers didnt target their audience in discriminatory ways. I understand facebook has refused to cooperate with the fair housing investigation by refusing to provide relevant data. The 47 states and the District Of Columbia protecting consumers facebook has signed 5 billion by the federal trade commission for deceiving consumers and failing to keep their data private. On election, facebook enables the russian government to interfere with our election system with ads designed to pit americans againstme each other, suppress the vote and boost trump. For example facebook allow the counterfeit black lives matter webpage to operate with the goal of discouraging africanamericans from voting. Three years later these activities are still continuing on facebook. He learned just this week that russia and iran are using the same tactics to meddle in the next election. Now on political speech. Last week you announced that facebook would not be doing Fact Checking on political ads giving anyone facebook labels a politician if platform to lie, mislead and misinformed the American People which would also o to sail more ads. The impact would be a massive Voter Suppression effort. Your claim to promote freedom of speech doesnt ring true. Over one third of the worlds population. That is so big that its clear to me and anyone that heres the list but perhaps you believe that you are above the law ands it appears you are aggressively increasing the size of your company. Ouall these problems ive outlid into giving the size and reach it should be clear why we have serious concerns about your plans to establish a global Digital Currency that would challenge the u. S. Dollar. The chair noww recognizes the Ranking Member, the gentleman from North Carolina, mr. Mchenry for five minutes for an Opening Statement. Thank you chairwoman and mr. Mark zuckerberg for your appearance. Theres a concern about the Role Technology plays in our lives that is warranted and necessary in. Its a powerful tool for our society the vitriol is frightening. The growing inequality between those that have access to the latest gadgets remain on the coast while folks living in Rural America are still trying to get the same connectivity necessary to compete in the global marketplace not to mention the anxiety of the deep cultural moment for us not as politicians, but ast americans. The feeling you need to check your phone throughout the day is something that is now a cultural occurrence for all of us especially members of congress most of whom in this room are adoing that right now. There is a lot of anger out there and now it is directed. Maybe its not about libra, its not just about some housing ads and maybe its not about facebook at all. Fair and unfair you are here to answer for the digital age. This is not the first time america faced difficult questions about technology. Throughout the history a major theme is the exploitation h of fear. Using fear to justify what isst ultimately a power grab new laws and regulation but old and tired ways here in washington and other systems of government and the results we hoped to avoid it now but just this one example there was a time when legislators pushed for whates ws then called the red flag of all that required them to immediately stop on the side of the road andv disassemble the automobile until equestrian or livestock were sufficiently pacified. But other times in history the use of fear wasnt so funny. The last hearing was element when numbers of congress on the dais actually compared the technology, the technology of libra to the terrorist attacks of september 11. Will the gentleman yield . The time belongs to the gentleman from North Carolina. Thank you for taking the bait. I have my qualms about facebook and libra. I do. And there are shortcomings. There are many, yes, there are but if history has taught us anything its better to be on the side of American Innovation, competition and most importantly the freedom to build a Better Future for all of us. Progress is not preordained id American Progress and americanor domination of free speech and global rights is not preordain preordained. Let us not forget the wave of innovation is spreading across the world with or without us. So, thats why i believe that American Innovation is on trial this day in this hearing. And the question is are we goig to spend our time trying to devise ways for the planners to centralize and control as to who, when and how innovators can innovate or will we spend time contemplating and leading the way on the question of whether or not it will be American Innovation that leads the next century being led by american values, the notion that we have been the rulin the rule of law e speech rights and american are then jobs and innovation are we going to spend our time building a Brighter Future for americans were trying to care each other apart . I was yield back. Id like to welcome todays witnesses, actually we only have one, mr. Mark zuckerberg. Chairman and chief executivchaif facebook. This is his first appearance before this committee, but i believe that he needs no introduction. She without objection your written statement will be made a part of the record and he will l have five minutes to summarize your testimony. When you have one minute remaining, a yellow light will appear in at the time i would ask you to wrap up your testimony so we can be respectful of the Committee Members time. You are now recognized for five minutes to present your oral testimony. Thank you, chairwoman waters, ranking number mchenry and members of the committee thank you for the opportunity to testify today. As we sit here there are more than a billion people around the world who dont have access to a bank account but put it through mobile phones is the right system existed and that includes more than 14 Million People right here in the u. S. Being shut out of the Financial System has consequences for peoples lives, and its often the most disadvantaged people that pay the highest price. People pay far too high a cost and have to wait too long to send money home to their families abroad. The Current System is failing them. The financial industry is a segment, and there is no digital stfinancial architecture to support the innovation that we need. I believe that this problem can be solved and libra can help. The idea behind it is that sending money should be as easy and secure asset in a message. It will be a global Payment System fully backed by the reserve of cash and highly liquid assets. I believe this is something i am not the ideal messenger for this right now. We faced a lot of issues over the past few years and im sure there are a lot of people that wish it were anyone but facebook helping to propose this. But there is a reason that we care about this and that is because facebook is about putting power in the peoples hands. Services that gives a voice to express what matters to them and build businesses that create opportunity, giving people control of their money is important and in a simple, secure and stable way to transfer money is an offering. Over the longterm this means more people transact on our platforms and that will be good for our business. But even if it doesnt, i still think this could help people everywhere. Before we move forward, there are in part and risks that need to be addressed. Reere are questions on Financial Stability, fighting terrorism and more inviting here to discuss that and how they plan to address them but i also hope that we get a chance to talk about the risks and not innovative because while we debate these issues the rest of the world isnt waiting. China is moving quickly to launch a similar idea in the coming. I libra will be backed mostly by dollars and i believe that it will extend americas Financial Leadership around the world as well as our Democratic Values and oversight but if america doesnt innovate on our Financial Leadership is not guaranteed. I actually dont know if it is going to work. But i believe that its important to try new things and as long as they are doing so responsibly that is what has made america successfully and why the industry has led the world. We wrotee a paper to put this idea out into the world and start a conversation with regulators and experts and governance and todays hearing is hidden within part of the process. We are discussing is too important for any Single Company to undertake on its own and thats why we helpedtapa to foua Libra Association of the the con of 21 companies and nonprofits hrking to give everyone access to financial tools even though the association is good and we dont control it, i want to be clear facebook will not be a part of launching the payment r. System anywhere in the world even outside of the u. S. Until the u. S. Regulators approved. Laste time i testified before congress i talked about taking a broad view of our responsibility and that includes i making sure the services are used for good and preventing harm and i want to discuss that across other aspects of the work today as well. People shouldnt be discriminated against on any of our services. We have policies in place to prevent paid speech and remove harmful content, but it also shows up in how the ads are targeted and are shown. As part of a settlement with civil Rights Groups and we then advertisers from using age, gender, zip codes to target housing and employment Credit Opportunities and ltd. Its part of our commitment to support the civil rights and to prevent discrimination. I also know that we need more diverse perspectives and the company. Diversity leads to better decisions and Better Services for the community. We need diversity a priority and we will submit a commitment that within five years more than 50 of our workforce will be women, people of color and other underrepresented groups. We have made some progress here. There are more people of color, women and technical roles and underrepresented people in leadership positions but i know we still have a long way to go. A chairwoman waters, ranking number mchenry and members of s the committee, this has been a challenging few years for facebook. I recognized we play an Important Role in society and have unique responsibilities because of that and i feel blessed to be in a position where we can make a difference in peoples lives and for as long aspo im here i am committed to using our positione to push for big ideas that i believe can help empower people. Thank you and now i look forward to answering questions. Thank you very much. I will recognize myself for five minutes foror questions. It is no secret facebook allowed russia to undermine and divide iae country through a device of online ad. The Senate Investigation discovered that africanamericans were targeted the most by a rush specifically in places where black wives matter groups were the most active despite all of your technological expertise, russia and iran are at it again with the upcoming election and then last week it announced a new policy that gives politicians a license to lie so you can earn more money off this division i suppose. Facebook changes the rules when benefit itself. Last year facebook banned all crypto currency ads on its platform because, and i quote, they are frequently associated with misleading or deceptive promotional practices, quote end of quote. Seems fair. An earlier thithen earlier thisk rolled back the crypto currency ativan but a blogging Company Announced its own crypto currency. So, tell us whats changed. How did the crypto currency go from being misleading and deceptive last year and then becomes the means for Financial Inclusion d this year . It seems to me that youve shifted your stance because you realized you can use your size and users data to dominate the crypto currency market. You changed your policy when it benefits you and reinstated the currency ads because you have plans to start your own so this brings me back to the new policy on the political speech. My question tor you is how does this new policy benefit you . Because it seems that a policy that allows politicians to lie, mislead and deceive would also allow facebook to sell more ads to those politicians thus making your company more money. But, you can tell me how does facebook benefit . Thanks for the question. Id like to address all the things youve mentioned. On elections, you are right that in 2016 we were on our back foot in terms of preventing russia from attempting to interfere. We spent a lot of the last few years Building Systems that are more sophisticated than any other company at this point and of governance, too for defending against interference in this monday we announced that we have proactivelymp identified a netwk of russian accounts and a few of the fake accounts that we proactively took down which tscertainly as you say signals that these nationstates are still attempting to interfere but i hope it will also give us some confidence that our systems are more sophisticated proactively address these things. On i your question about politil ads, look, from a business perspective, the very small percentage of our business is that is made up of political ads doesnt come anywhere close to justifying the controversy that this encourages for the company. So this isnt about money. This is on the principle i urlieve in giving people a voice. I believe they can be an important part of the voice and i think that especially in the political process for the challenger candidates and local candidates are advocacy groups whose message might not otherwise be covered by the media having ads can be an important way to inject your message. Lefty interrupt for a minute. Are you telling me i think as you said before your plan on doing no Fact Checking on political ads. Chairwoman of our policy is that we do not fact check politicians speech and the reason for that is we believe that in a democracy it is important people can see for themselves what politicians are saying. Political speech iss some of the most scrutinized speech already in the world. Do we have a fact check on any ads at all . Yes. Describe what you fact check on him. Thank you for the opportunity to clarify. Facebook itself does not fact check. What we do is we have feedback people in the community dont want to eatf my roll hoaxes orac kind of let meat be clear you do no Fact Checkingra on any ads is tt correct . What we do is work with a set of independent Fact Checkers who somebody checks on the ads. You contract with someone to do that is that right . Chairwoman, yes. And tell me who is it that they fact checkk on . Chairwoman, what we do is when the content is getting a ot of distribution and its flagged by members of our community or our technical systems it can go into a queue to be reviewed by a set of independent Fact Checkers. They do not check everything but the things they get to if they have something false. My time has expired and someone else will continue on this line of questioning and i will now call on the gentleman from North Carolina to Ranking Member to be recognized for five minutes. En as i mentioned in my Opening Statement i think there are bigger challenges and opportunities facing america than your ad models. Or even the question of libra. From before your speech on friday to what we read and heard from your speech on friday. Statii havent changed my viewsn the last week. Ten years ago versus today versus your speech on friday. I would have been more optimistic trying to work in china could have contributed to making a more open society and today it seems that in some cases not only does it do that but i think we have seen that in rothe last few weeks in a number of cases. Why are we seeing emerging technologies . Through the Digital Currencies being developed elsewhere such as the case of libra. Congressman, we have a lot of competition around the world and you are right over the last decade pretty much all of the major platforms have been American Companies with strong Free Expression values and i think there is no guarantee that it is the state of the world today. We are trying to set up a globac system. Switzerland is where a lot of the organizations are. The regulatory certainty in switzerland and here in the United States for this type of technology. I think switzerland has certainly been forward Winning Congress and one of the things i want to be clear on i just want to make sure it is 100 clear to everyone today my commitment running facebook is that we are not going to launch anything that is a product or part of this until we have the full support from the u. S. Regulators duregardless. The project internally before you would think of this. Why would you have a project like that is about competition globally . Is that a component . You have no payment platform on facebook. In seeking to develop a payment platform was that because of the examples globally of competitors creating the payment platforms . It was partially that and its partially because of i view the financial infrastructure of the United States as outdated one is building Payment Systems a lot of people spend money on top of the existing Financial System that exists. That work is relatively less controversial. We are doing it around the world in Different Countries on top of existing Payment Systems. We try to rethink what a modern sinfrastructure finance would be if you started it today rather than 50 years ago that on a lot of outdated systems. The fact that you can send a text message to somewhere around the world part of the infrastructure that they are building on his a lot more modern than some of what we would have toan go on here. As soon as we put forward the white paper around the project, china immediately announced a Publicprivate Partnership working with companiesr like tht to extend the work that they had already doneun and a digital isa part of the dog in the road initiative. The gentlewoman from new york on the investor protection, entrepreneurship and Capital Markets is recognized for five minutes. Thank you. You said on page three of your testimony facebook will not be a part of launching libra anywhere in the world until all the u. S. Regulators approve. So, which regulators are you talking about . There are actually many financialp regulators such as te fed, fdic, cftc, cfp b. , fhfa and many more, and to be clear, libra would affect all of those regulators. What kind of approval do you believe is necessary . Do you need to see written approval for the regulators are those approvals would they be public . Fighting crime and terrorism into different areas that are overseen by different regulators i think that the process with each of them might be a little bit different. But we are committed to getting all of the appropriate u. S. Approvals before launching the Payment System in any country in the world even where they might not be strictly required. Would you commit to waiting until you get the approval from every u. S. Regulator in the process before you will support launching libra, yes or no . All of the regulators that have jurisdiction over part of what we are doing we are working with them and we will seek approval from them. A bill of mine passed the house yesterday for the Terrorism Financing and criminal activity now with the creation of the various Digital Currencies we face a new challenge with Financial Transactions being anonymous. Thats why im concerned that they would make it attractive to those that are looking to longer money and its my understanding that it wont be anonymous but i havent heard anything about competing the wallets. Will you commit not to supporting any other anonymous wallet i consider this a National Security issue. Thank you for this question i think it builds on the question thof chairwoman was asking befoe as well as the position on the crypto currency b after all. We see a range of different projects out there from decentralized deregulated things to what we are trying to do is build a safe and secure and d regulated alternative rethink the digital Payment System means that to the same standard on Money Laundering with the anonymous wallet so i see this as a new loophole for criminals looking to hide and launder money otherwise we will face the problems that we have whereon ty are hiding trafficking moneyre Terrorism Financing, criminal activity of all kinds. Its a huge problem of safety for americans to look at facebook will do what you are saying. Our version of this come our wallet is going to have strong identity so we are at the standard that people expect or exceeded. I cant sit here and speak for the whole independent association but you have my commitment froman facebook. Pethank you very much and i will yield back. The gentleman from missouri, the gentlewoman from missouri ms. Wagner is recognized for five minutes. When libra was announced, 28 companies joined the founding members assigning a nonbinding letter to join the association but in recent weeks, many of the founding members have dropped out of the association. Perhaps they are not so sure that its going to work either. Paypal, visa, mastercard, youve lost these stable partners i would say and i find it highly concerning. What do you make of the sudden departures and why did a number of the body members have concerns whether you are up to the task of meeting the Money Laundering standards . It is too big for any company to do on its own which is why we set up this independent association with a number of other companies and nonprofits. It is a very complex project and as you said it is risky. Scores of stable partners have dropped out. Why . I think youd have to ask them specifically. Why do you think they dropped out of . I think because it is a risky project and theres been a lot of scrutiny. So, let me move on to something near and dear to my heart it is a legal offline and should be illegal online. Its overrun with images of child sex abuse and i would like this submitted for the record. These reports from last year included a record 45 million photos and videos. These are absolutely shocking numbers. Moreover it is estimated 70 of the valuable reporting to the National Center would be lost if facebook implemented endtoend encryption proposal. How much is this figure growing year after year and if you enact encryption, what will become of the children who will be harmed as a result that they are not reported . Congresswoman, thanks. Child exploitation is one of the most serious threats that we focus on. With this facebook doing, 16. 8. Congresswoman, those reports come from facebook. The reason why the vast majority come from facebook is because i think we work harder than any other company to identify this behavior. What are you doing to shut down . These accounts peddle illegal content that t exploits women. What are you doing to shut this down . Congresswoman, we built a sophisticated systems to find this behavior. 15. 8 million growing . Congresswoman, i dont think facebookok is the only place on the internet where this is happening. The fact that the majority come from us reflects the fact you have said that you want to end encryption. What is going to happen to these children . You are responsible, facebook is responsible for 16. 8 million of the 18. 4 that areib out there lt year alone. Again, i believe there are probably a lot more than 18 million we are doing a good job of finding this. But, i think you are right what are you going to do to shut it down . We are working with Law Enforcement and building technical systems to identify. Well, you are not working hard enough and ending encryption isnt going to help the reporting process over my time i have many more questions for you that i will submit for the record that we are going to talk about this and i will yield back. Thank you. The gentlewoman from new york is recognized for five minutes. Thank you madam chair. Libra pledged it will not share account information or Financial Data with facebook or any thirdparty without customer consent. However, facebook has had a history of problems safeguarding user data. In july, facebook was forced to pay a 5 billiondollar fine to the ftc and by far, the largest penalty ever it is a part of the settlement related to the 2018 Cambridge Analytical scandal. Let me start off by asking you a very simple question, why should we believe what you are saying about protecting customer privacy and Financial Data. The order in the ftc will help us set a new standard for the industry in terms of the rigorous Privacy Program that we are building a. We are now building of a Privacy Program for peoples data that is parallel to what Sarbanes Oxley requirements would be for the Public Company on the Financial Data in terms of the audits internally any manager who is overseeing a team that handles peoples theater has to certify quarterly that they are meeting their commitments and that was all the way up to me and i will have to certify that. Thank you for your answer. We have been publicly reporting that when you require speed to facebook officials coached the Company Founders to tell the European Union regulators that it will be, and i quote, really difficult to merge or blend the data between facebook and websites and other was no desire to integrate the two systems. 18 months later, the platforms were linked. The European Union fined facebook for providing incorrect misleading information. So, let me ask, do you understand why this record makes us concerned with facebook entering the crypto currency r space . Do you realize that you and facebook have the credibility issue here . Congresswoman, i understand that we have worked to build trust on this and that means making commitments, and even if we learn new things in the future that it could change our mind on how we should operate and that i think we are going to need to make sure the commitment have you learned that you shouldnt fly . Congresswoman, i would disagree with the characterization you say you went to the european regulators and you said that i will not link, but it will be impossible and yet a few months later, it happened and you were fined for that. Lets continue. I hope that you learned something about that, about not lying. Facebooks internal model was for a long time. We do not want to break the International Monetary system. Last week the g7 released a report stating global stable coins could have significant adverse effects both domestically and internationally under the Monetary Policy as well as Financial Stability. Given the g7 concerns into thee concerns voiced by all of us here today, would you commit to a moratorium on launching libra until congress can develop, you said before you will not move until all of the regulators sign in to end support for you to move forward. Here, congress, the peoples house have the opportunity to work on a Legal Framework so that we provide the guidance to the regulators would you commit to that, yes or no . My understanding is that congress exercises significant oversight over the regulators through these committees, so that would seem to me like the appropriate way for that to happen. So that is a no. Thank you. The gentleman from oklahoma is recognized for five minutes. Think you madam chair. The problem of addressing under banked and unnamed individuals as both real and important. However, significant portions, and i know the libra project intended to reach this population, however, a significant portion of the under banked simply do not trust banks. I suspect they may not trust capitals of industry or members of congress either for that matter. Do you see this as being a major hurdle in the option of libra . Congressman of the people that you are trustworthy and to use the system. Congressman, weve certainly had a lot of issues over the last few years, but i think that its worth remembering that every day billions of people come to our services because they trust that they can share content messages, photos, comments with the people they care about and more than 100 billion times a day, people do that. They share something with a set of people because they know that content is going to reach the people they wanted to. So, i think if we are able to move forward on this project, there may be some people who dont want to use it because they dont trust us or dont like us and that is one of the values of having an independent association where there will be other competitor wallets and other approaches, but i think that this is an area where being able to put ideas out into the world and letting the market work and letting People Choose for themselves what they trust and what services they want to use is probably the right approach. I just suggest it will take a lot of energy and time to reach that group, under banked, un unnamed its growing and is real substantially but lets shift focus for a moment. I also serve on with the congressman the science space and Technology Committee and those of us that worked on that committee know as all of us do that the digital images can be altered to make it nearly impossible to distinguish between what is real and what is not. Facebook recently launched a deep fake detection challenge in collaboration with microsoft and others to address this problem. This seems like a step in the right direction on behalf of the Technology Companies involved. From your perspective, how great is the deceptive use of the deep Fake Technology and in what ways do you anticipate that the challenge will be successful . Thank you, congressman. I think they are clearly one of the emerging threats that we need to get in front of and develop policy around to address. We are currently working on what the policy should be to differentiate between the media that has been manipulated by the ai tools like deep fake with the intent to mislead people and compare that to normal content that might have been just cut differently and someone might not like the way that its cut, but its not a deep fake and kind of misleading manipulative content that way so we are working on i the policy and this is a very important area. The deep fake challenged how to identify these things and we will certainly help inform the policy and thisep is one of the areas i think is quite important goingil forward. One final question many experts suggest that we need to educate the public on how to consume a trusted information. Facebook recently announced initiatives for projects on media literacy. To elaborate on these and what you see as facebooks role given youru critical position within the industry . Yes, congressman. This question may be premature to ask all the later this week we actually have a big announcement coming up on launching a Big Initiative around the news and journalism. We are partnering with a lot of folks to build a new product that supporting highquality journalism. Theres an opportunity within facebook and or services to build a dedicated surface for example where people who really want to seeil highquality curad news, not just social content, but from highquality publishers can go and consume that content and thatus could create a place where we can form new Business Partnerships to help fund highquality journalism as well. So im looking forward to discussing that at more length in the coming days. I will yield back the balance of my time that a chair. The gentleman was also the chair for the subcommittee on Consumer Protection and Financial Institutions is recognized for five minutes. Thank you madam chair. You came in in your Opening Statement sounded great. I thinkca that you gave the adve as to what we wanted to hear and what you think the members of congress on various sites want wanted. But, words are different than actions, sir. One of the first things i heard you say when you were testifying is that yoas if he were interese un banked and under banked. I chair as the co chairwoman said the financial subcommittee. We had a hearing yesterday dealing with minority depository institutions. Facebook is a multibillion trolley and dollar company. You are concerned about the under banked and unnamed. How much of facebooks money would provide services and health . Have you invested in any of the minority developments, depository institutions in america or any place else in the world . Is any of your money sitting in those banks . Congressman, i am not sure if that. But what i do know is if of the people that we serve around the world were under banked. I understand it is beyond the u. S. , butr we are here right n. And you just indicated that you want to work and will not go any place else unless you are in compliance with u. S. Regulators etc. And what i am saying is that for example, i dont even know, you talk about internationally whether or not going after the under banked, un banked whether or not you intend to have the digital wallets registered in each of those countries so there would be a Regulatory Oversight because what we found is we have payday lenders that say we are interested in the under banked and those that are not banked. And those individuals are supposed to be helping more than anybody else. Youve got institutions here, minority, depository institutions and if you want to show that you are doing the right thing with all of the money that you have coming you can do it here in the United States and other places also. So there is an answer that you should know and i would urge you to go back and find out. And i would almost guess that its 0. And you should look at your policy and change it because actions speak much louder than words and you do have a trust factor. In mean, i met with your investors are all pulling out of libra. Look at the news. What is most important to me is our democracy. The democracies around the wor world. You tell me when you look around the world it seems to me facebook with many other destructive politics of today. For example, 2016, russia interferes with u. S. Elections. You admitted into the question is what has been and what will be done . Another big issue around the world, misinformation and division. And misinformation across north america and europe. Facebook has been systematically found at the scene of the crime. Do you think this isis a coincidence . Congressman, we operate in almost every country in the world except for china and north korea, so i think we would be in almost every country where the different activities are happening. One thing you mentioned before that i agreeee with his there ae a lot of predatory financial organizations. We banned payday lenders and a lot of folks like that from asng our platform for ads well but certainly we are not interested in. Of but you have the a wherewithl because if these had the money they would be able to put the wiproduct because these folks nd access to capital and Financial Institutions. I believe facebook has created an innovation that we welcomed and together with the controversy that it has spawned. Those that see to censor its use or speech i was disappointed in facebook to restrict free speech rights i support vaccinations of childrens and adults with the communication risk effects of vaccination there has been a vaccination trust fund that has paid out over 4 billion to compensate those that have been injured by vaccinations there is no more clear or persuasiveve statement than the payment record of that fund. From time to time medical research has established in context of specific risks associated with vaccinations. You and another member say that those risks do not exist then you testified that you believe in giving people a voice in Mister Zuckerberg can people support users fair and open discussions of Communications Related to risk related to vaccinations quick. Thank you for the question. We do care deeply about giving people a voice and freedom of expression those of the founding values of the company. At the same time we also hear consistently from our community that people want us to stop the spread of misinformation. So what we do is we try to focus on misinformation that has the potential to lead to himminent harm. That can include especially Misleading Health advice there was a hoax going viral a number of months back. Ci sick stick to the subject are you 100 percent confidenth that vaccines pose no injury to people on the planet quick stomach and dont think anyone to be 100 percent pt . Fident but my understanding of the issues is that it is important that people get theirr vaccines. But you said you are platform you believe in giving people a voice. Shouldnt somebody have the opportunity to express their opinion different from yours . Over 4 billion has been paid out by the firm for thousands ov b do you think people should have the information to make an informed choice . Congressman i do. We dont stop people from posting on their page something that is wrong but if they want to post anti vaccination content or want to join a group where they discuss that content we dont prevent them from doing that but what we do we dont go out of their way to make sure the recommendation systems encourage people to join those groups. We discourage that. How do you discourage that quick. There are a number of different tactics if somebody types into the search results or the search box something that may lead to anti vaccination content we will not recommend those. If you name the Group Exactly you could get it we will not prevent you from joining it but we will not recommend or go out of our way to show people content that gowould encourage people to join those groups. Maybe the people harmed by the policy our appearance and disabledis children. If you look at the statistics i think youre making a bad mistake. My time is expired. The gentleman fromk california. Today is his birthday. Happy birthday bricco you are recognized for five minutes. You dont get more because its your birthday. [laughter] donald trump said assets can facilitate unlawful behavior including the drug trade. I ask unanimous consent put in the record a report talking about cryptocurrencies used by terrorists. Hopefully without objection. Without objection. W i appear to be anti facebook but i was anti cryptocurrency back when you were. Cryptocurrency either doesnt work your investors lose a lot of money or it does achieve its objectives perhaps and displaces the us dollar or interferes as the sole reserve currency in the world. That role saves the average American Family 1000 in interest cost because money pours into the United States. The federalfaly reserve can turn up to 100 billion of profits to the u. S. Treasury that we spend because of the power of the us dollar. The us dollar is an excellent currency as a means of account and it serves all the needs exceptpt its really bad for drug dealers tax evasion and that unmet need can be met by a new currency. If we make drug dealers just 10 percent more effective, how Many American deaths is that over the next decade . Does it compare to the death we experience fromri terrorism . We have to see. But those who are introducing cryptocurrency have got to pause and wonder what effect they will have on the power of the United States to impose sanctions right now turkey is stopping at 20 miles into syria not because of us troops. We are out because of sanctions due to the us dollar. We stand to lose all of that because cryptocurrency is the currency of the cryptopatriot. As pointed out you will wait for regulators to sign off. They are working with old statutes. There will be a loophole in the 1940 Investment Company act to get you where you want to go in the regulators cant stop you and they call that Regulatory Approval is if those in 1940 new what you had in mind which made clear that you will go forward unless donald trump appoints regulators stopde you and you will go forward if you can find loopholes in statutes that you will employ a horde of lobbyists from passing a new statue. You are asked a question that you forgot and still forgot to answer it but lets be clear. You will be making powerful burglary tools and letting your Business Partners commit burglary. With all the power of facebook to create a new currency you will call it libra but you are the person behind it thats why call it doese suck buck. You will create it with Business Partners your white paper says the Business Partners will use your tool to have anonymous accounts and then to say you will follow up customer how do you know your customer with an anonymous account quick. To call your bluff this is a Payment System for the poor and unbaked. The poor and un banked need pesos, dollars so they can buy something at a local store. You have made no effort to help the un banked anywhere else at any other time. And you should create a Payment System close at zero fee but the real monies the tax evaders and the drug dealers. I know you have at least 100 lawyers i will tell you what you are doing is legal and you will be safe. But given the harm that this can do the they can be very wrong and if this explodes the way it might, especiallyd you cannot hide behind the idea that you did not create the Libra Organization that its just your Business Partners that have wallets designed for drug dealers and terrorists. I have a few more things to say but for the richest man in the world to hide behind the poorest to say that you are trying to help that you are trying to help those that the dollar is not a good currency nrr dealers and tax evasion. The gentleman is recognized for five minutes but i thank you madam chair welcome Mister Zuckerbergrg certainly i admire you as an innovator and as an entrepreneur you have taken advantage of the Economic Freedom of this country and i admire that. Its fantastic. But now you are getting into a different world withh libra experience. In the past you have been dealing with Communication Systems where people can Exchange Everything from retail and personal information but people will transact business because they trust that the transactions will be secure wherever they state law exchange their money the secrecy of thea activity Consumer Protections and not being able to do things in a legal fashion. It takes a lot of regulation and that you are findingng out that is an important part of the Financial Services world to give people those kinds of protections to earn that trust. You know you want to conform to those regulations to do this and earn that trust can you continue to innovate and make the changes to this product as it needs to conform to the regulation . Do you believe that can happen i currently do. We will have to see how the process plays out. But i do sitting here today. Are you willing to stop the project if you see it cannot go forward anymore quick. Congressman i certainly wills top the facebook part of it Libra Association is a separate thing that exist if i feel like facebook cannot be a part of it with those principles that i have laid out then facebook will not be a part oft it. I want to follow up on the line of questions of the reserve currency. What effect do you think if libra is implemented it will be on the reserve status of the us dollar quick. Congressman becausea the reserve is primarily us dollars i think a project like this could be important for extending americas leadership to the contrary of the risks that are being pointed out. We have to be careful about all the risks onre financial stabilit stability. There are some regulators that oversee that. But i just think we cannot sit here and assume that because america is today the leader it will always get to be the leader if we dont innovate. Innovation means doing new things and that does mean new things have risks and we need to address those and be careful in doing that. I personally worry if we dont do things like this whether its this project or others like it we lose our leadership. I appreciate the fact that china is already doing this so if we allow them to play in this area then we need to look there as well. I think by now 6 percent of the currencies in the basket that they used to set the value is one dollar quick. I dont know if that has been fully finalized. My concern is thats good for the United States but what happens if libra decides now the chinese want because of the economy looks to have importance in the world that could diminish our amount to one third of the value of the basket of currencies and now the chinese currency is one third so now we have a problem with the standpoint that the currency that is utilized most around the world is libra and now we are only one third of that. To me that is concerning. Does that concern you at all . That they could set this and it would be a negative effect on our position. Certainly that is something i thinknkd we should look at up front. I cannot speak for the independent association on this but i think it would be completely reasonable for our regulators to put a restriction that says it has to be primarily us dollars. One more quick question so what is the advantage of facebook and libra . What is the endgame for you to realize a benefit quick. Congressman we build some of the most widely used messaging services around the worldwe that is Facebook Messenger. The vision is to make it so people can send money to each other as easy and secure as they send a text message. Sending money is very useful utility to for people around the world in addition to the product that we have. The results of this chair on theou subcommittee and you are recognized for five minutes. The Housing Rights Initiative a Watchdog Group has recently found human rights in dc and maryland against seven major Housing Companies who are accused of housing facebooks ad targeting tools to deny prospective tenants the ability to see the housing ads based on their age which is ay protected class under fair housing laws. And then to disproportionately show those ads. Do you agree facebook could receive seeking information about how Housing Companies have discriminated. Congressman i imagine we will certainly comply. But will facebook agree to produce information about the algorithm that uses . For a bit of background for us to use our products to discriminate. Weve entered into a settlement with the aclu to remove certain targeting features so if you are targeting for housing or employment you cannot target based on age or gender we also limited the number of interspace targeting as well. That for so many years , your company engaged in that conduct is that because it was a lack of awareness . And have any sensitivity to inclusion. Its always been a grants dour policies to discriminate and we enforce those through those technical systems. When the complaint was filed by the aclu we were able to reach a settlement and help uphold those principles that we care about and weve always been committed to. Also agreed to study further of how the algorithm works. We dont collect data on the thnicity of people who use facebook so that is somewhat of a challenge whether a disparate impact and its an open question from my perspective on those who use ourpe services. And then despite facebooks commitment there is no one in Senior Leadership was substantial civilrights experience. And then to care about a lot working on civil rights. And then to start the civilrights audit by very established folks in the Civil Rights Movement and Sheryl Sandberg is personally leading a task force inside the company to make sure we implement suggestions. Is the odd independent or from within the company quick. Yes it is independent. It is being done by laura murphy who is an established leader in this space. And to publicly report whatever problems they find. Yes as part of the audit will be public. What you say publicly about audit at a high level the answer is no but there may be specific things of individuals private data or Something Like that where they might not publish it but broadly speaking they will publish but they find. Thank you sobr much you are recognized for five minutes. You have accomplished something that nobody that wasas possible. Many on other side of the hesle agree with and actually use tweets by the president to support their position. I never thought i would see the day. [laughter] your br. You have taken the public pieces of politics shaken them in a box and throwing them on the table everybody tries to figure out where they fit when it comes to facebook and this technology. I dont fault you for what your tool has become because i do believe it is a tool. But what share of libra is facebook . The association that you have referenced do you own half of it . s equal shares among all partners . One who was at facebook up libra is it the same quick. There are two organization there is the independent libra. Thats what i want to get to know. It is a nonprofit. It is not a forprofitntra enti. So how does the voting go . What Facebook Says or the market or the association quick. There are 21 companies andru nonprofits that each company a nonprofit has one vote right now there are five a Board Members david is one but is not running it. He sat where you sat. He is not running libra but he is running the facebook side of it. But he is not even on the search committee. So switzerland is where your are going to domicile this. He was talking to swiss regulators and that the association was talking to them. And misunderstanding and that he and the team were working with the primary swiss regulator and working with the data regulator. Working with those jurisdictions and examining this what about those you have talked to quick. Thats not the question. Also which us regulators you have been talking to. Are you talking about me personally or our team quick. You use the royal we on page three of testimony i assume its not you specifically i assume it is you and your team but i want to know who have all been talking to in the us because one of the questions ian have is why switzerland and why not here as the Ranking Member started to ask . Can you give me a list of those regulator. Yes. T so what happens if the association decidesha to launch despite that . Then i believe we are forced to leave the association. I hope if it will weigh our recommendation and what we say publicly what we think should happen but at the end of the day if we dont receive the clearances we need to move forward and then to be in a osition to not be a part of that association. Facebook is a tool Cryptocurrency Libra is a tool it is neutral just like a car or a plane or a gun or a knife theyve all been used for nefarious and for good tools are in society to regulate. Whether it is the concern of Child Sexual Exploitation or others you need to help us understand where the line First Amendment rights and of all of society lie and the safety so would like to continue that conversation at some point. During the sixties and seventies Congress Passes a series of laws intended to stamp out discrimination in lending and housing. Working to pass legislation. And the fair housing act. All of these laws were to target to stop the sale of advertising of housing. It is a series of practices. And by the geographic area. And systematically refusing to lend to those communities. And as my understanding Mister Zuckerberg and through they can target their messages and their users to go directly to identify their race, gender or age and indirectly targeting taeir interest and the location and the federal housing agency. In your platform to allow advertisers to restrict certain users from viewing ads on your platform and you even enable the practice to redline certain communities in housing and employment opportunities. You were charged with this by a federal agency that protects our housing and lending laws. And for the past 50 years to eliminate the very Racial Discrimination practices that your platform is guilty of. Such as sex and Drug Trafficking and even as you mentioned payday lending terrorism and illegal drugs. Why dont you prevent redlining which is also illegal and criminal as well. Congressman, we do now. Its always been that discrimination is not allowed we reentered into a settlement with civil Rights Groups of the aclu and others and f h on ts fha im sorry but to remove certain categories like age and gender and zip code. You said tocl remove. You said we have removed. M understanding is this is already implemented. If i am incorrect i will get back too you quickly and update you. Understanding it is already in effect. Mister zuckerberg i have the report that it clearly says that your platform allows advertisers to restrict certain users from viewing ads on your platform and you have even enable the practice of redlining certain communities. What is your answer . What is your response to head t 14 . At the beginning of the discussion with t 14 and these groups that i just referencedr referenced, we entered into a settlement that is separate with the civil Rights Groups to create a new standard where we block thatt targeting it is worth noting that the standards that we set our industry leading i dont think any of the other internet platforms restrict that targeting that we do for these categories but in doing so helps us uphold the principles around preventing discrimination. So im glad that we are doing that. Thank you Mister Zuckerberg. Thank you madam chair good morning Mister Zuckerberg. How are you. Im doing okay. [laughter] that was honest. Thank you. Th innovation and we need innovation in america. And to those questions the gentle man was just asking let me clarify if i want to advertise today can i use age or sex or zip code to target people as we sit here today quick. Congressman i believe the answer is no. Okay. I just confirmed with my tea team. Those options are no longer in the system for credit or housing or employment opportunities. I want to talk about calibra because it does undermine other currencies. Those that are sovereign countries have currencies 193 that you open yourselfov up to regulation. Why not just take another currency quick says facebook you will make money through the transmission why do you thank you haveh to create . So i would ask you to go back to your folks and ask the pain yourere going to have. Why not just pick a currency and use that as part of the Payment System . Sure. The gold love libra is to have a globall Payment System rather than a currency. Because its global in nature, nature, we figured it might be better not to solely rely on one countrys currency. But because we are an American Company and the American Economy is the strongest in the world that make sense for any reserve to be primarily us dollars to extend americas Financial Leadership in that way. But we clearly have not locked down exactly how this will work for guy personally and much more focused on being able to help innovate and build a global Payment System then i am of eddie specific makeup of what a currency or reserve might look like. And i think theres already discussion it might make sense to build a digital Payment System we are talking about based on individual sovereign currencies rather than a combination of these currencies with new ones. That something already considered. You will see the Bank Secrecy Act that will be hard with the Digital Currency. And ultimately you may find a sovereign country that you could use or based on several stable currencies around theyo world. But there are a lot of people around the world with this cross border opportunity to send money back and forth in countries where there is no Stable Currency. Think venezuela the currency is worth nothing and less now that it was a second to go. So there are countries where there is no Stable Currency and there are millions of people in the world who are hoping your innovation works. But you may have bitten off more than you can chew by trying to create private currency. I know you are looking at it but i hope you think about that because you can make a difference and frankly you can system without creating the private currency and i thank you will find the hacompliance with the individual laws sanctions, all of that is easier if you use an existing sovereignn currency. I would ask you to think about that and you can comment if youou want. But i wanted you to think about those things. Thank you. My understanding some of those discussions are already happening some of them are publicly. I want to reaffirm what you sayer about how this could be valuable to people around the world. We serve more thann 2 billion people and a lot of people in the United States but they are not 2 billion here so most of them are in countries that have developing economies that could really benefit fromre thi. I yield to Mister Greene who was also the chair and i thank you madam chair in the Ranking Member as well and thank you to the witnesses for being here today. Is it true the Libra Association oversees the libra prospect quick. Yes. Is it choose Global Corporations make up the association quick. The association is made of 21 companies and Nonprofit Organizations as well. Of the 21, how many are headed by women quick. I do not know the answer to that off the top of my head. I believe that you can but i would assume that you would know who heads the corporations that are going to be running this global company. How many of them are minorities Mister Zuckerberg quick. Mister congressman i do not know off the top of my head. Are there any members of the Lgbtq Community associated with the associations, Mister Zuckerberg quick. Congressman. Or those that acknowledge they are part of the community. You do not know. Mister zuckerberg is it true the overwhelming majority of persons associated with this endeavor are white men quick. Congressman i dont know off the top of my head. Is it trueun that one would have to have 10 million to become a part, aside from other qualities to become a part of the association quick. I believe that was the initial idea but i dont think that has been locked down yet. Isio it true persons of already bought into the association and paid 10 million quick. I do not believe that has happened yet. I spoke to your person who manages calibra and he indicated he is one of the holders of the association. Is incorrect quick. You are right Mister Marcus who runs the calibrara subsidiary is the facebook delegate to the independent association. The question i am answering is i dontel know if the organizations that are members have yet contributed any oinancial support for the organization. I must say i would assume you would have the answers but i would greatly appreciate it if you would share this with me because i plan to share with the public. The public needs to know if this is an organization that is truly diverse or if ithe is an organization that is owned and operated a small group of persons, all of whom have similar characteristics for lack of terminology. This does not apply to you Mister Zuckerberg but you need to know why there is a good deal of consternationac. Man whose name was bernie made off. He was the chair of the nasdaq and had all of the trappings of being a successful and responsible person. He is now serving 150 years in prison his ponzi scheme 64 64. 8 billion. The people that are for free 6markets were not in this ponzi scheme they were last a fair but once they lost their money they made their way to us. And they wanted us to make them whole. This is why we have to be concerned not that you are bernie made off. I want the press to clearlyer understand that these can go wrong and when they do we are the people who have to make them right. Reyield back the balance of my time madam chair. The gentleman from kentucky is recognized. Welcome to the Financial Services committee. Criticism isis cheap. Anybody can criticize because you can see politicians in washington are pretty good at lodging criticism. But creating something of value is significantly more difficult. I commend you for being an innovator trying to create something of value it seems never the private sector produces an innovation or new advancement politicians and bureaucrats rush into criticize or regulate. In an era when some politicianssh are openly embraced socialism and Central Planning it seems the presumption it is a bad thing i think it shouldpl be reversed it should be for the potential opportunities with Financial Inclusion reducing frictionn any Small Business to bring that to un bank and under banked communities. That doesnt mean we should ask questions but in america a country built on Free Enterprise we should always place the burden on the government to justify regulationon and intervention. Was very interested in your testimony when you alluded to the risks of not innovating in the danger of going behind other Foreign Companies that have similar platforms. Elaborate on the initiatives of those other countries quick. Yes. Thank you for the opportunity. Today as soon as we put out the white people are on libra especially with china the white paper kicked off a Publicprivate Partnership with their Biggest Companies to race to build a system like sothis quickly. That they could use as their initiative to put out in africa and otheran areas. And they will launch in the next few months. There are issues. It is important talking about libra and calibra but the american competitiveness angle in competition with china is a National Security issue and the fact that facebook and the Libra Association is launching into innovation is positive for National Security. I do want to commend you on statements you made recently about free speech and the First Amendment i was happy to hear you say you will continue to stand for Free Expression understanding the messiness but the long journey toward greateron progress involves what challenges us i am reminded of what was wrote on liberty i will commend it to my colleagues. All mankind minus one and only one person of contrary opinion to be no more justified to silence that one person than if he had the power to be justified to silence mankind. This is important and relevant to facebook with the accusations of offensive speech and the dramatic polarization of our discourse. I do find it highly troubling politicians are trying to bully you to be a fact checker and the Speech Police especially in politics at the core of the First Amendment. So whatever Fact Checking board you are delegating, will you commit that facebook will not censor any political ads placed on your platform or in support of President Donald Trump quicks. Congressman my commitment on this that the principle is that we believe people should see for themselves what politicians are saying. That doesnt go forbe trump or any candidates or any national office. People need to see for themselves to make judgments on what the candidates are saying and their character. I applaud you for that but i dont want you to be bullied by politicians to relinquish our treasured free speech under the First Amendment. Protect that and dont be bullied by politicians you want toby censor politically incorrect to speech. I yield back. This chair for the subcommittee of subcommittee Monetary Policy is recognized for fivee minutes. Thank you for being here today in response to a letter on fsoc i was told it is unclear if us and foreign regulators will have the ability to monitor libra and require any type of corrective action. And then at the same time if us and International Regulators are unaware to have the ability to your net worth ur protect against Money Laundering, how will you get over thehe regulatory hurdles if they are already sitting there. And whatow happens if regulators throw up their hands to say we cannot guarantee the soundness of this product quick. Thank you congressman. There are two parts of the process. What we are trying to do to design a system so theres no risks in the process of working with the regulator of questionserns and to make sure it meets approval. The key part is the system will be fully backed one one in the reserve of highly liquid assets. In contrast to the way most banks work whether there is a run on the bank if people want to withdraw from the system. In theory it should not be possible. Now in practice it should be on beyond that theory with their questions and concerns and make sure we operate at the highest level of rigor for Financial Stability so my commitment is we will not launch the libra Payment System here or around the world until we get the approval from fsoc and the other relevant financial regulators. Im pleased to hear you sayod that. There is a mechanism that you talkeday about that you wanted to rule out. Which would be some kind of a review mechanism. That would in some ways tell the independent group what they believe to be violations of human rights quick. Thank you congressman. I believe you are talkingh . About hate speech and areas like that. This is an area where our principles we want to give people as big of a definition of freedom as possible but of course there are some things that infringe anothers rights or can cause harm. One of the things we have atruggled with is how do you develop a nuanced set of policies that can identify all the different types including erterrorism or Child Exploitation or hate speech or Health Misinformation there 20 different categories and we develop policies that are more than 35000 network on safety and security. We spend billions of dollars per year on this. The budget is now greater than the whole revenue of our company was when we went public ina 2012 prickle its a big effort it shouldnt set on annies company shoulders so one of the things is to build an independent Oversight Board that will consist of people with diverse backgrounds and views and is global the value of freedom of expression. This group can make final binding decisions and how much content goes up or comes down or that i or the team cannot overrule. It is a check and balance and oversight of our companys operations. You are removing yourself from the body it is created quick. The way we set this up we will appoint the first set of cochairs in the next few inths and then they will nominate another set and once the board is up and running it will refill it self so we are not part of the selection that. S after. Mister zuckerberg a number of my colleagues have leexpressed consideration that needs to be taken in with regards of thees prospective payments with the Libra Association you are well aware they have had experience of International Payments mastercard and visa haveus pulled out do you look at facebook as it expert in the payments industry quick. We are not traditionally a Payments Company but the person running the calibra subsidiary was president of paypal before which is a Great Company and wed certainly have otherer financial experts. You also noted in your testimonyy today you are looking for usmp Regulatory Approval to make sure that they look for their part to continue to participate. If the Libra Association cannot satisfy those regulations with us will calibra pullout of the association . This short answer is yes. If we dont come up with a solution that gets the us Regulatory Approval then presumably we will work on the proposal until we can but we will not launch anything that doesnt have approval. But you would pull out on the wallet portion with calibra . That case i referred to before where we could be required to pull out is if the association decides to move forward with what we are not comfortable with. But right so now everyone is aligned to make sure we have us Regulatory Approval to launch anywhere in the world and thats the goal and thatsat the plan. Is there an internal can describe . Ou there are multiple levels of the work there is some work at the Network Level. That supersedes all the individual work the companies are doing to implement this. Of course those that are members of the association or are transacting this system is responsible for themselves to implement and to follow those rulesbe so within facebook theres a big effort to verify peoples identities and this predates calibra. I appreciate that but one of the concerns with facebook and with libra and calibra you have had major hacks losing personal information. What assurances are in place that those with the most Sensitive Information will be protected and moneylaundering . The paymentng information that people share is stored separately and all of our information we are working hard on security. And we havent had an issue with this to date. Even though we havent launched calibra as a product we do take payments ranging from fundraisers to people buying ads. Ye and we do have a secure tear focused on Payment Information. You have had no data breaches in that field. My understanding we have not had any issues in that area. Thank you. One of the issues i amhe concerned about is can we use it to buy anything that is legal in this country . Would youg support that . The intent to give people as much control as possible. Of course there are certain types of goods that are regulated there would be an additional process to allow that the and certain content policies that we havent developed yet. And then with that appropriate Regulatory Approval. We will now take a five minute recess. Minute recess. [inaudible conversations] the committee will come to order a recognized for five minutes. The other coloradan. Thank you for appearing today and for your testimony today. I just want to block one thing down where i heard two answers earlier. Going through a list of regulators. We went through a whole laundry list of them in your answer was for the parts that apply from this standpoint are you willing to seek the approval or are you going to wait for the approval before anything is launched . Is the letter thank you for the opportunity to clarify that. We are not going to launch anything until we get thee approval. As long as it doesnt take too long. Youve got 30 seconds. With a bunch of interest categories inet the housing and credit opportunity ads and the answer is weve implementedte a change in the primary surface for buying ads on facebook that covers 80 of the ad and is part of the agreement in the settlement we have agreed to a timeframeis for the other 20 by the end of the year which we are on track to do but havent done yet. Thank you for that answer. The reason you are in our committee we may have issues about the ads that you have allowed into the disinformation. You are here because of libra, the Financial Services committee, and mr. Marcus was here to testify and really we want to understand what this is. Is it a currency, are you a bank, what is this association, and so i appreciated mr. Mchenrys question is. We all like innovation but it seems like this innovation is going to be housed in an association in switzerland, not in america. The constitution is the one that starts all of this with article one, section 8. 5. We are given, the country is giving the obligation to claim money and regulate. So, do you consider libra to be money . I consider libra to be a Payment System, and i admit those are two ideas the u. S. Dollar is very strong as we talked about today and a number of places. We want to extend the american Financial Leadership around the world. You dont consider it to be money. To coin money lets go to the next step which is the wallet that in my opinion is the bank. Libra is that not right . The currency is in the wallet you can think about it that way. Although we are not a bank. We are not playing for a bank charter. Thats the problem. Thats what we are facing here and that is the same place i am in to kind of the try to understand what this thing is that you all are creating and i appreciate creation and would like it to stay in america and not go to switzerland. As i have been thinking about this, if you want to talk about either one of them i am happy to do it, that the president s analysti was everybody have information or the full company had information on everybody and wanted to take over the world. So, we need to know what this is and regulate this. The gentleman is recognized for five minutes. Thank you for coming before the committeems today. Your biography is a textbook example of the power of capitalism to have a company in your free time after years of hard work and i dont agree with everything theyve done in the past, but that doesnt diminish what you have filled and it makes me proud to live in a country where this work is rewarded and we even talked about that a little bit. I want to ask you a very simple question. Are you a capitalist or socialist . I definitely consider myself a capitalist. Thank you for that. Its always great to hear that. The loss of scrutiny for taking on something as bold as the Initiative Come of this project is understandably drawing the attention of pretty much every banking regulator in the world and i dont think that there is anything wrongs with asking question to ensure that it will not be used for illegal activities however i said this when david marcus came before this they shouldnt discourage the private sector from y,investing their own time and money to research these new technologies. Private sector always seems to get it right most of the time. There could be benefits to bringing the product to market. No matter what policies we enact up here in congress that private sector will be the engine that brings the Game Changing technologies into existence. Can you explain where the private sector is better equipped to develop a currency than the Federal Reserve for another Government Entity . Im not sure that im here to say that others shouldnt try to put their own ideas forward. I just think that part of the american system we should encourage more people and companies, Small Businesses, Large Companies can even efforts from the government to try new things. This is an area that our system has been stagnant and isnt serving a lot of the people that it needs to and when that is the case, this is an important areas of there will be risks to any project and we need to make sure to address them and that is why the regulations are in place but there are risks to not try new things im not saying that my approach is the best one. I wish others were trying to do Different Things. Some of my colleagues on the other side of the isle which you have heard today have come up with legislation to prevent Technology Companies from offering Digital Currency. I feel like this is extremely shortsighted and it would put a selfimposed handicap on American Companies and entrepreneurship like we talked about which makes ato country great compared to our neunterparts around the world. Youve already touched a little bit on this with the congressman but i think we need to repeat it. What other countries are dealing with this space . Right now, Chinese Companies would be the primary competitors. There is an Ongoing Partnership between where they are very busy on focused building this and i know there are a lot of questions that are completely valid questions about how a project like this would impact we need to trade off and think about it any risks of a new system. That is something that i worry about. For the past few years im sure people wish that it was anyone but facebook and i appreciate that you addressed this head on and im probably running out of time so i will stop right there. Thank you for being here. I want to take a slightly offtopic today because i sit on the Intelligence Committee and i will never forget looking at the thousands of facebook ads and twitter posts that they purchased on the exclusive positions in the society race, gender and division i will never forget in particular a post in spanish that urged people to vote on their cell phones and i wonder how many actually did. Ii read a recent speech at georgetown couple of times and celebrate your commitment but if you dont mind my saying it came across as onesided. They were opposed to organize a. Ob it is really hard if it means anything. It means that the government will defend the right of nazis to march through and we will spend our taxpayer dollars it will defend the right of an american burn the American Flag with the passions and anger and emotion that that would generate. So, back in 1788 we didnt just say freedom of expression is a goodio thing. We put in place and committed the resources and invested in those things that would make it worth living in the context of freedom of expression. He established regulation through a democratic and transparent process and we spent a lot of resources to regulate the commercial speech and most importantly we invested trillions over the years and educating american so that when they see something that they hate instead of picking upam a n or knife, they actually formulate a rebuttal. The town i live in just about half of its tax revenue on education so my question is simple. Its more like a country in my opinion and lik than like a com. Tu have global reach apparently half of americans get their news from facebook. So my question is simple given the investment that we need in establishing the context for the freedom ofof expression, but cod wind be because the sixmonth commitment will you make with almost 50 billion of cash in your books tell us what investments you are making so that this freedom of expression that you enabled is a good thing rather than a bad thing so that the good side of the freedom expression overwhelms all that can be bad coming out of the freedom of expression. I talked about the number in the speeches youve referenced but i think that you are right when you serve millions of people even if only a small percentage of them use our services to do harm, that can still be a lot of harmony and we certainly have a big responsibility to make sure that we address all of the new threats that come from internet as well as existing threats that have been there all along so this is something in terms of resources and what we are doing weve built much more sophisticated systems to proactively identify harmful content for the categories of the harmful content. I get that and its important but what im really looking for is what is the parallel tcommitment facebook will make with its half trillion dollars and 50 billion in cash was itinvestment will you make in education in the Public Discourse and basic decency . Im looking for a commitment for what you will do to help make the society worthy of the Free Expression. One is on the safety side. It is a major investment and practically eliminating harm and on the proactive side we will be investing a lot more in the partnerships with highquality journalists and publications to foster that kind of content but as i mentioned earlier, we dont have more than 35,000 network on the safety and security. We spend billions of dollars a year on it and its his second portion of the budget and expenses we spend more money now on safety and security than the whole revenue of the company at then time he went public earlier this decade. A lot of things we are doing now simply wouldnt have been possible even in the six or seven years ago for uss to do are a big company and have the responsibility to do this. I think you have the responsibility to do more. You have a responsibility to invest but thank you. The gentleman from arkansas is recognized for five minutes. We are glad to have you in the house Financial Services committee as a former startup investor in on entrepreneur. I congratulate you in creating facebook and in native also add people in our capitalist system here that arera disruptors to fd a gap and weakness and try to exploit it with a new product for consumers. If we hadnt done that over the past 50 years in finance we wouldnt have atms or credit cards or debit cards or free checking or securitization so working down there on the task force this is important and supported by innovation on this committee. I dont want to punish the association for a product that hasnt even existed yet but ih was reading the report. Its adequate appropriat apprope designs adhering to regulations that are clear and proportionate to the risks. Is that a statement that you agree with . I havent reviewed the report in detail, but in general we understand that working in Financial Services and payments this is an area that is very sensitive and peoples money is extremely important to them and there are good regulations in place to make sure that all services basically protect aeople and i want to make sure that we do the same and we are at the same standard or higher and everything that we do. I think youve made it clear libra will not go forward in the world in any country unlessr it beats an adequate standard in the United States and what i am saying is i the announcement lat week the country is beyond the United States agreed with that view as well. Lets talk about privacy for a minute. Cythere is a great book life afr google and sure youve read if not i can recommend it to you. A quote that i am paraphrasing they arele held by human beings, not by governments and david and parenthetically notify facebook. Do you support the idea that we each control our data and exchange its only when necessary to conduct a particular transaction is that a world you acknowledge as the future . It might be a little more nuanced. Iwo certainly think that there should be private tools people can use to Exchange Messages and information privately. That is why we are moving to a messaging toolthemessaging tool. At the same time as the content gets to be morea publicly visi visible, the equities and values and balance shift towards upholding Public Safety in addition to privacy and i think if someone is sharing something very broadly we need to make sure that it is an inciting violence. It is theirs to share as they deem fit. Let me move on. Lets talk about the Digital Currency. He also sent a letter to the chair man with the Federal Reserve about the idea of a digital color. My interest and that wa in thatd by mr. Marcus and his testimony. Wouldnt it be easier if it was a digital token that was a u. S. Dollar fodollar forgot to simple digital token that you are looking for as it is noted here that you dont go and try too create some in separate . Wouldnt that need all the standards you need to help lower the cost and create a a differet rail for payments wouldnt that be successful in doing that . L my understanding is the community is fairly split on thisss point. I think from a u. S. Regulatory perspective it would probably be significantly simpler but because we are trying to build something that can also be a global Payment System that works in other places that may be less welcome than other placesbu its only 100 based on the dollar. The y gentleman from illinois is recognized. To join as the other half of the chairman of the task force that we are working on and maybe the other programmer so i have to admit that i play around more so i apologize for that. Introducing with senators warner and holly it provides transparency to consumers and regulators about the data that is being collected and also how it is monetized and c it also provides limited rights of deletion and i wondered if he would be willing to comment for lthe record what you think is e technical feasibility of that as well as any policy concerns you might have. Could you clarify which part talks delete the the specification collection, delivery to consumers, theres lots of details that have to be filled out in any project like this. How would they authenticate themselves to make sure that they are looking at his data and so on . And also if you have the right to the delete key will so have the right to authenticate yourself appropriately. Have your staff take a look at that and if you see any problems with the implementation i think it is a good step forward. Youve been asking whether or not they will allow the anonymous transactions. Can we have a statement on that, what would be possible to conduct the anonymous transactions will they allow anonymous transactions . It is an open question whether we allow from my looking at the discretion of the code, if you have to private key you have control of that libra balance. Have i missed something . This is probably more of a policy issueus and question it wouldus be possible to bud a system that allows that and i think there is a policy question about what the restrictions are that need to be placed on it. The equity is on both sides. If the goal is to enable inclusion in the companies where i understand. Im asking as you currently plan sand as it exists, it seems to e that the anonymous transactions are not allowed if theres something wrong with that i understand you can change the way it operates but as it currently exists, i believe it is impossible. If im wrong about that, please get back to us for the record. The second thing you have to come up with an answer to is under what conditions fraudulent or mistaken transactions can be reversed. You mentioned in your testimony that calibra intends to authorize transactions but what are the limits to that . For example if there is a Million Dollar ransom where payment is no that something tht you are going to refund . What are the limits to that . I dont know if we had worked out what those policies policies yet but the principle here is to be at the level of or exceeding the level people expect from other payment instruments whether its credit cards or fraud protection. But you have to charge something dependent on what class of fraud you are insuring against you have to charge or it wont be a profitable product. Theres no details you can give us on what the current plan are . Im not saying that we havent thought about it but we havent gotten the policy is. T. E specific policies in calibra go downstream to working out the architecture for the overall project. At the very start to understand is there a mechanism to reverse the transactions. All of these billionaires go around with big security details it isnt a reversible transaction. And so i dont think people want to live in that kind of situation to try and to understand who will provide what guarantees to allow you to reverse. Figuring out the right policy on that there may be restrictions. We havent nailed down all of the policies, but the goal is like when you are using a credit card, you expect the Credit Card Company to pay. Despite those are so long and nots one needs them. Thank you. My time is expired. It the gentleman from georgia is recognized. Thank you madam chair and mr. Mark zuckerberg. There were leaks of information that were interesting and below l the headline was a caption that said democracy dies in darkness and i want to thank you for holding the hearing today in light of the public not in the basement of the capitolro complex behind locked doors there are some other hearings being held today and i thank you for that because i think its important that the American People be able to see what we are doing here in congress. He is a student of criticisms here today and a lot of it was in the sector and ive seen it when people shake up the status quo they get criticized some of your harshest critics today i would venture to say if theyhe havent already they will post their comments and maybe even videos of questioning on facebook. Not only on the American Culture but on the businesculture, busid technology. And it doesnt come easy. Much of the criticism that i have seen because i am one of those and i love innovation and finding a place that technology can fit. You share that as well. I hope you take this in a complementary way that i mean it. You challenge the status quo. This town is intolerant to shaking up the status quo. Bureaucrats, politicians were to manipulate the system to their advantage and when you bring in new ideas it is hard for them to rdderstand. Some of the questions have been indicative Everyone Wants to put what you are doing in a box and when think outside the box there isnt a box to put it in. I think we should advance and seek innovation. I am not opposed to some of the things you are doing. I am concerned about the implications they may have had operation of it but we need to do consideration so theim questn is around how this is going to operate and how you see it operating because they do not see it sitting in a box. The reserve chairman told us earlier this year that if it causes problems related to Money Laundering and terrorism were Consumer Protection they would rise to these levels due to the size of the facebook network. Now david marcus said if it isnt done right it could systemic risk. Do you think that it is important especially since the Payment System that is done by central banks, do you compare what you are doing with the bang and should you be regulated as such a a big part of that is the scale and i think it is worth noting just because they serve a lot of people around the world that doesnt meang that if we roll out a product on the number one all of those people would be using it. Like any of the things we do we would have to experiment and make the product work overtime and that would be risky. I think there is other risks it takes a long time evenor to make that work. If the plan works over time it could rise to the level someone might determine and systemically important. I will defer to the regulators judgment oni when that is but i do not think that its automatically the case something launches into the small subset of the people that have to meet that on day number one. It is systemically important based on the previous statement that you will work with regulators are you prepared to meet the requirements and regulations that cometa with ths systemically important Financial Service we would be and that is where we are working on this project because we believe in addition ot the other currencies having a Payment System that is based on some of those technologies that is regulated at the highest levels and uphold the highest standards in areas around safety and security whether it is Financial Stability or fighting terrorism or crime or fraud we think that can access exist and that is what we are trying to create. I see that im out of time and i will yield back. Thank youou for being here. The gentlemanan from ohio is also the chair th of the subcommittee on diversity and inclusion recognized for five minutes. Thank you, chairwoman. Pretty diverse asset management, housing issues, inclusion in privacy and security it is very important to me. Ive been here before you and have discussed this with your company over the past years. The vice chair of the Congressional Black Caucus for the record has had multiple meetings and here we are again. Let me get into the asset management. That is a large industry as we know Something Likeet a 70 trilliondollar industry. Facebook has more than 46 billion on the record in cash or cash equivalent and marketable securities. Are any of these firms managed by the companies, yes or no . How many diverse owned or women womenowned law firms were contracted byun facebook . Just give me a number. I will take that as you dont know. How many women or minority part work on use cases . I dont know the answer. Did you review the packet that went out in the notification to you and your team about what was included today in the diverse asset management, did you read that . The legislation did you or your team review that when we talk about the scholarly resume did you review the packet was sent to you before the committee that is a no so that we could do something you introduced, youve introduced laura murphy. You know who that is because you said her name. You hired her as a consultant and in the Opening Statement you talked a lot about civil rights. I think we should phrase that a little differently that you worked with civil right civil ra member of the lawsuits that youve had. Itntnaacp. Theeven the secretary filed a lawsuit against you for violation. So, let me ask you this, do youu know what redlining is yes. Maybe if you had real diversity or inclusion, somebody in that room would have said what you are doing how you were redlining or using zip code to eliminate people from getting information. Now, have you read the report that was sent to you . You talk a lot about diversity and introduced her name. Have you read it and do you know what the recommendations were, do you know when she issued the report, yes or no . Tell me what the top three things were because i have it right here. One of them was around housing ad that we talked about and another was setting up the civil rightse task force. And who is on the civil nerights task force . Sheryl sandberg we know she isnt really civil rights, so im trying to help you here. She is the coo and i dont think theres anything in her background. If we are going to talk civil rights. Its an internal task force. Do you know who the firm that view and play for civil rights . How could you not know when you have employed the most historical largest civil rights firm to deal with issues and this is what is so frustrating to me. Its almost like you think this is a joke when you have ruined the lives of many people think discriminated against them and you know what percentage of africanamericans are on facebook in comparison to the majority . Do you know what the percentages are . Of people using facebook . Yes to you know the percentages for africanamericans . We dont collect their races. It came out in a report that was sent to you so maybe you just dont read a lot of things that deal with civil rights for africanamericans. I have a lot of questions c im going to send that im not going to be able to get through and i would like you to answer because this is appalling and disgusting and i yield back. The gentleman from ohio is recognized for five minutes. Think you for coming and talking with our committee. Iz i appreciate your presence and testimony. Frankly, i go back to when i first saw facebook and i said why would anyone put this on the internet. Obviously you had a vision for this company that frankly is an earlystagee Venture Capital companies took a pass on and missed it and im sure they are kicking themselves today but youve pulled off a truly Innovative Company that while we have not yet captured you hit a spot inat as a capitalist use scaled it up as a founder you are still in large measure in control o of that organization o though it is publicly traded so congratulations. And i just want to get your insight about where technology is headed. So, prior to facebook talking about libra or the digital wallet, calibra, there were people saying its an interesting name, listening to how some of my colleagues have addressed you may envy. Its hardol to subpoena or ridicule, but no more control. Theres no more headquarters or anything else. So, clearly making it synonymous early on that block chain itself with the distributed technology is going to be substantially bigger, and i think a lot t of peoplers took injury in this spe inas a sign that you and others view this as a much larger space for the emergings technology. Can you tell us about your views on that . Sure. I think that there needs to be a number of approaches here. Some of the innovation in the crypto currencies in the decentralized nature can be very valuable. That just is not what the big ay like facebook can addhe the industry. Once we are in the position we are and we will not create some biggest decentralized but cant hold up the highest standards of protecting against the risks we are talking about today. His Financial Stability or fighting terrorism or crime or fraud. We want to work with regulators to build something that is at the highest standard. I am generally in favor of the ideas and innovation all acrosst the space. I think that the u. S. Financial industry on top of which to build Financial Services is behind where it needs to be to innovate and continue the Financial Leadership going forward. Inh when you talk about calibra, i get your idea of that because as a company deciding the scale of facebook you certainly have your customer provisions and requirements and have appropriately proposed to regulate calibra as a Money Service business including all the things people have to do in compliance with that. However, when you are proposing libra, the crypto currencies you are talking about creating money and many of the things in this space that are proposed we have been very sloppy with our language collectively to call everything in the space crypto currencies when they just represent a good or service and in some cases a commodity and they are not trying to be. So, that lack of clarity is driving the american innovators offshore not because they are avoiding the mall but they have regulatory certainty in other jurisdictions. Frankly switzerland is one of the leaders in this space. But when we think about libra. Highlighting an important point hertheres a big difference betn trying to create a new type of digital Payment System. I think that it is the key and i apologize i would like to talk to you about this but i only have ten seconds left. It is the key because if you can distort or change the value of the effort in American Securities depend on the central actor and in america currently that would be regulated as a security. My time is expired. Pe the gentleman from california is recognized for five minutes. Im almost tempted to ask you since you cant write to congress did you take that as a complement it was a joke. [laughter] but i do want to compliment you. Make sure you dont answer not even with a smile. The question i was going to ask you is this. I have heard a lot of your testimony. You said you will not go forward with libra i must get approval from the regulatory agencies that are required in the United States. Before you got here used with david marcuyou sentdavid marcust exactly the answer he gave. I think that he was a little more aggressive in wanting to move forward to what you say supersedes what he said if there is any conflict between the two. I also think that our views on what we should do have been clarified. Through the public discussion that is happening i think we felt he wasnt able to provide enough clarity to congress when he was here and we wanted to make sure that we came with a more clear answer. Thank you for doing that. One of the things i think you are probably something from us is that it very important as a tool of American Power and american values. We would much prefer to put the sanctions on the country than to send our soldierspo as you know. The power that we have because of that, because the Banking System is significant. You can see some of the outlaw states were able to work with our colleagues around the world to do something about what they are doing because of the power in the dollar. So, when something threatens the dollar we get very nervous and we should be because this is something that again has been very useful for protecting the american values. Do you understand all of that . I think you do. We have been hinting at that but i want to make sure you understand that because you are playing in this delicate space. At a high level i certainly understand it and that is why part of what we are doing is trying to create a system from we ground up so that it can enforce the sanctions, travel rule, a member of the regulations that are important for creating stability and security around the world. Ihat is some of what is at stake. I think if we dont innovate there is no guarantee that we will be able to extend the same rules and project that influence around the world going forward. We need to innovate as a country in order to keep ensuring that we can do that. I think we want you to innovate and ura disruptor in a positiveh way that when we see that you want to go to switzerland, it gives you regulatory clarity. I would quote james henry it is the grandfather of th both secrt and tax havens and also the leaders in places you hide your money and do all sorts of other notorious things. Are starting to loosen up because of that history that i would give c you some advice and say stay here in the United States. If youre going to follow all of our rules why do you want to switzerland . The independent Association Falling apart without you. They dont seem to exist without. You are the big dog in this fight if you decide to bring in. You can hide behind that a little bit. I believed you up until now but now i think if you wanted to bring it to the United States, you could. If you are trying to paint a global system i think there is some value in housing the independent association in the country and in the place where a lot of the Worlds International institutions are based. Which would be the United States. And i will work on this through calibra. We are doing it here and thats why i am committed to that no matter where we are working around the little dweeb will follow the u. S. Regulations. I hope you take a look at that once again because i think it was relieving for fear. And again my time is almost up. I appreciate its good to have someone sturdy and resilient and you are probably the right person at the right time to take this. Thank you. The gentleman from North Carolina is recognized for five minutes. Welcome. I appreciate your time and example as an entrepreneur. You are not a securities attorney are you . Im not. We have several draft bills before this committee and is a part of this hearing which including the securities act of 1933 and Securities Exchange act of 1934 before the Committee Takes any action on these bills. M hoping we can receive testimony from various experts to provide their views on whether the bill might have llpacts that reach beyond. Its crucial members of the committee be able to differentiate between libra which isnt a crypto currency and actual crypto currencies like bitcoin and before that we discussed in the draftes legislation. Many proposals would stifle financial innovation and if we are to remain a world leader in Financial Technology it is vital to the committee cannot embracee reactionary laws against crypto currency. V so, libra has been in the works for the past year and since the announcement of the potential members, paypal, visa, mastercard, walked away from the associations due to various regulatory and political concerns. It is notable every u. S. Processor has exited the association. Unlike the Current Association members with capital firms, payment processors were given one of the most difficult tasks when it comes to Digital Assets and that is antiMoney Laundering and knowing your customer, your clients so it ifo major processors how do you see the Association Building a Compliance Regime that adheres to the antiMoney Laundering provisions that this body has worked hard to put into place. My understanding is there are still Payment Companies that are part of the association and of course david marcus who runs the subsidiary for facebook has some large Financial Service companies and was the president of paypal before coming to facebook so i think we have the rvght expertise to work through these problems and we will work with regulators to come up with solutions on them an demand we e big securityem efforts in facebk so that certainly isnt going to be the first time in our history that we need to fight against the sophisticated threats or people that are trying to defraud others are other types of harm and we felt quite sophisticated systems in order to work on some of those things. Would you say its almost worth starting from scratch now but some have left the association . I dont believe that is the right characterization. A company is joined because they were interested in exploring what we were doing. A lot more companies are interested in joining in the future and i wouldve been a lot more to join. The association was just officially incorporated, just kind of officially formed in the last few weeks after months of planning and there is a lot of work ahead. Given its centralized nature, how does it align with the earlier claims of building a future and how would you guarantee privacy and data during the initial phase . Thank you for the opportunity to talk about the privacy vision. In a highlevel a way to think about this is inbo our lives we have public spaces like town squares and private spaces like our living rooms and we have the digital equivalents of theva ton square at the facebook and twitter and youtube try to be. A dont really did they have a digital equivalen equivalents oe living room where you can interact in all the ways you would want to in an intimate and secure space. Our text messaging apps today are still primarily just text messaging but there is an opportunity just like we have done with facebook to build a lot of the different utilities and tools for how you would want to interact with people in a broad space whether its joining communities, starting fund raisers, businesses, all of these broad utilities. There needs to be Something Like that in private spaces and one of a the most important ways is through payments so we are working on a number of different approaches, some that work on top of the existing Financial System that has a limitation of the existing Financial System that are easier to implement and some that are more ambitious like what we are trying a to do here where we are trying to do a more thorough system. Thank you and i would heal back. An you are recognized for five minutes. Thank you madam chairwoman. Thank you for coming today to address our concerns. Yesterday i wrote to twitter about this letter that they sent to me and other members of congress allowing the Foreign Terrorist Organizations to have a presence on the social media platform between the good terrorist actors that have been elected and bad terrorist actors. I ask unanimous consent to enter this butter into the record, please. Without objection so ordered. This is particularly troubling to me because they recently found in my home state of new jersey. Do you agree with twitter that this Foreign Terrorist Organization belongs on a social media platform or should twitter have to take down their affiliated accounts and content . Congressman from its a oflittle hard for me to commentn what twitter should do but i believe that we take down those accounts. You are a leader on this issue and chairs before him which twitter is also a founding members of this is a Pretty Simple yes or no should twitter to comply and take down the official twitter accounts do you think they should have twitter accounts . Welcome a congressman as a principle i think all American Companies should comply with american law. It sounds like you believe yes, hezbollah and other terrorist groups should have to take down their content just like you have taken steps to facebook to do so. Its really not for me to tell twitter what to do but certainly our policy is that we do not allow them on our services. And i hope twitter will also follow suit as the steps you have taken into google as well and we appreciate facebook has taken steps to remove the from the platform i am still concerned the violent extremist content still exists h parts of the platform for example today theres still circulating on facebook the horrific shootings at the christchurch in new zealand. I assume that troubles you . Of course that would trouble me. We build systems to detect all these different types of harm and take action very quickly. Din general this is an area whee we have invested millions of dollars, tens of thousands of people working on this. We will never do a perfect job but a lot of what i am committed to is every six months now we publish a transparency report on how we are doing, proactively identifying each of the categories of harm that exist ed with the prevalence is on the service and what percentage of the content system proactively identified versus someone reporting up to us and our goal is to in her of every period until we can drive that amount. These are sophisticated nations state actors from russia and iran and china and very sophisticated but we can build systems that proactively can identify at this point and if we can do that its a good example to address these challenges. P as much part of an ecosystem as we establish in switzerland with highly intelligent citizens to be employed to do everything humanly possible to keep our jobs in the United States of america to grow the space here for go how do we maintain this competitive advantage and continue to doai that here congressman most of the work will still be done here in the us. Clearly there were very real risks of Financial Services of all the risks we talked about today we just need to make sure we balance and get answers while still enabling innovation. You are recognized for five minutes but i thank you madam chairwoman. I appreciate you calling this important hearing today. We have all heard loud and clear what you said about the renovation in this area especially highlighting the challenge in regard to china and in this space as we compete with china. When you come up with this idea and went to your board of directors how did you tell them that facebook could monetize her profit from the use of libra and calibra . How did you explain that quick. You may not believe this but we focus on building the services create value in peoples lives and we believe if we do that then we can get the value downstream spirit but eventually did. We had a need for Financial Inclusion and the way this helps facebook over time isnd that basically in the ad system that if you are a Small Business you bid and tell us what they are worth to you if you can get a new customer to your store. So what we basically see is when we eliminate friction for customer buying something from a business they and the value of advertising goes up so that they bid more. So if we can make it that they also want to transact directly i would expect over time that higher prices. So then they bid more in the ad system but for that to happen and then to build a system that passes the regulatoryry approvals to be successful and useful for people and then the third step if that plays out then it positive business impact. It also comes with a currency is traded for goods. Thats correct and thats a separate area we work on already we distinguish between aservices of payments and other payment efforts that we have from facebook marketplace which a lot of people use to buy and sell things that they have made or secondhand goods that are sold. Hundreds of millions of people. Instagram shopping is a new way for people to basically connect with the creators and influencers and our brand to buy things in line thats a useful product foror people as well. The and banked that some of those also live in areas without broadband service. Does facebook have a planal to address those areas. We do but we worked on this in 2013 before we launched the project also facebook conductivity where we build technology and open Source Technology that mobile carriers can use to decrease their cost in a competitive market and we pass along to consumers. And as these are implemented around the world with the cost of delivering for broadband to go down and the amount of the population the connectivity issues to have 100 million access the internet that were not there before. These are concerns on both sides of the aisle of the operation locating in switzerland. With all thatf considered would you consider locating in the United States versus switzerland quick. Congressman at this point we do not control the independent Libra Association. I dont think we can make that decision but we are certainly an American Company based here in our base will largely be here. The gentle man from guam. Also chair for the committee of Financial Services but good afternoon thank you for being with us today. With the amazing platform that you have built congratulations. To allow facebook to allow challengers to get their message out there versus relying on traditional a media i wouldnt be sitting here today if not for facebook my committee on guam is small i could reach a vast majority of my residence by going to facebook. But facebook has lot has brought a lot of opportunities for change with the power behind the platform. Did you ever imagine it would get this big quick. No. I was building a service for my community in college. Im sure you would never after about housing discrimination or child traffickingrr or political. You are right the scale has grown quickly and to address proactively and to have content policies but we use to enforce them reactively. And of course starting in your dorm room you cannot have tens of thousands with content but we became a big company that has the resources of all these folks doing content with the Ai Technology and that we have a responsibility to do that. You will do the best job that you can and no doubt your Business Model depends on that. Facebook started off as communication and the idea behind it to grow to scaler these problems. And while it is a sharing platform libra is a payment platform that is a whole new level what we may not be able to foresee in the future and thats right very concerned. But this rest in the fact it is an asset backed currency i heard you mention earlier that you will have libra convert on one one basis and to take a dollar out but knowing how currencye markets work and is supposed to be backed by currencies in the fluctuate it is virtually impossible to have one one ratio of money going in versus out whether its a single currency versus a basket that has to come out is that been something you have factored in quick. There is not a queer one a clear point but to use a combination of currencies rather than relying on any single one. You have less volatilityti hat if you have a basket of currencies with the euro and the yen its very unlikely thats what they use a lot of leverage to use that arbitrage but when it comes to libra there is no singular entity responsible to make that one one ratio. So the association would strive for that and use leverage to meet that one one demand. And where we are no longer sustainable at the end of the day who is responsible if libra fails quick. The point of the one one reserve backing is the traditional banking industry. But this wouldnt be possible with a basket of currenciesra but if libra fails who was responsible quick. The Libra Association will have a reserve but i understand this is an important question that we will work with other regulators to make sure we have a solution that meets their standard. The gentleman from ohio was recognized. Thank you Mister Zuckerberg for being here. As i have said many times Block Chain Technology has the opportunity to change the Digital World in positive ways i want the country to lead but i believe its a different statement from what libra is that i think has a number of contradictions. But when your colleague was here p talking about the transition to block chain is that still the ambition because it seems like it may not be anymore. Congressman i think that is the aspiration over time. That as a yes. It is an aspiration. To fulfillme that mission there have to be some people. I will reclaim my time its a goal but not written in stone brick i dont think youll ever get there for quite dont thank you have incentive to frankly. But that being the case, in ththe current world the claim has been made we dont have to trust facebook or anybody similar to a claim of google currency which i think is valid what is inherent in that is that we do is controlled by a centralized organization. So how can you make the claim that Libra Association will adhere to all regulations at all places but that will enforce the law quicks. Im not sure i understand. The Libra Association regulates libra. Presumably or code of regulations. It will also adhere to regulations and the currents loan countries of jurisdiction. How can you make that claim that we can have two different sets of the us versus the eu and one central structure. I need to clarify the distinction between facebook and the independent Libra Association i am speaking forla facebook and what were going to do we will comply with us regulations we will not launch anything anywhere in the world until we have those. Will you disassociate from libra entirely if libra goes on a path against us regulations quick. Congressman i have testified that we would. Another big concern is you mention about payment data and thats important to keep that distinction. I am trust but verify so what Regulatory Oversight are you willing to sign up for to make sure thats the case quick. This order that we just entered into to be certified at each level of the company. And with to certify on a quarterly basis to the best of their knowledge their team upholds those privacy commitments we have to certify that through the company and i have to certify as well. You are satisfied with that. I think that is a pretty robust framework. I didnt mean to criticize i am just sincerely asking. So we paint this as if we dont do it china will. But trying to find somebody else who is more of a hawk on china i agree but what i dont think is the right frame that if Mark Zuckerberg doesnt do it isnt you versus president xi so that is somewhat misleading i want us to innovate an oral line owned the future of the space but to have a centralized organization through facebook frankly i dont trust it and i dont think the American People trust it. I would encourage you to work on ways to decentralize so there is no control whatsoevero. I yield back. The gentleman from michigan. Thank you for being here. This is hard in this setting but try to see me beyond a congresswoman but also a mother of muslim boys in this dark time in our world. Advocacy organizations to prohibit hate groups from using the event page which fuels violence against africanamericans jews and Lgbtq Community and you claim your serious about addressing this and before congress you stated we do not allow hate groups on facebook at the primary purpose or a large part of what they are doing is spreading hate we will ban them from the platform overall. Is it still your policy to ban hate groups quick. My understanding is yes. Facebook Community Standards says we are committed to making facebook a safe place. When it has the potential to intimidate and they will not be allowed on facebook i want to show photo of a man showing a rifle outside of a mosque. Does this meet your Community Standards quick. Congresswoman im not sure if i am in a position right now to evaluate any given post against all the given standards that we have. So do they regularlyny use the pages to organize threatening protest and they are often armed the rally in this picture was planned on the Facebook Event page. I do want to submit for the record press release from civil rights advocates that facebook has failed to stop anti hate groups despite your pledge. So why havent you stop them from using the events page or way do you leave that page up quick. It is very important and i take very seriously its very hard to police every instance and a lot of the content i would personally condemn this is of the type of thing i want on any platform. And i want to do a better job here. We are not perfect. We make a lot of mistakes. People share more than 100 billion pieces of content per day. Even if we make mistakes at a small percent of that is still a lot off mistakes things that we take down that shouldnt be are things that we miss that we leave up that we should have gotten to. This is a constant effort to do better. As Technology Improves certainly in the state of ai to identify Different Things it so much better than five years ago. This is hard stuff. If you assume that the photo is against the policies even within that we have nuances that you might be able to share which it seems important if there is a racist attack but you want people to those that try to copy it. So with that nuanced to linguistic analysis more than 100 companies around the world this is one of the areas its hard to execute as well that we are improving in the area take very seriously. Recently facebook has taken the steps further by permitting politicians to violate Community Standards. Why should the very politicians leader country be held to a lower standard than the average american quick. Congresswoman its not about helping the politicians its about making sure people can see for themselves. But it is hate speech and it is leading to violence and Death Threats in my office it is not truthful. I understand your folks are working on it on your team but it is violence to two people that are innocent it is a dark time to reduce violence. Do you mind if i add some chcontext quick. Time has expired. But we would like you to answer in writing. The gentleman from tennessee is recognized. Thank you for being with us today. I am reminded of a quote from the great entrepreneur by the name ofhe cal turner and that you have criticism because of that platform and that is synonymous with the social media and for those financial instruments. And with the libra project i can appreciate how you and your team have tried to convey your intent to work with regulators before launching calibra. I applied you for releasing the white paper back in june but i am trained as a lawyer so it does raise concern that it is not dated in any way. So as time goes forward they ian have that as a reference point. To say i dont control the Libra Association but i definitelyly agree that would be a good addition. It does carry some stremendous risk with the risk facebook carries itself and that distrust and with those Financial Services industry how do you plan to launch calibra and libra in a way that they will trust the technology cracks it has been documented that calibra will be a regulated subsidiary it is just that. And for better or worse even other is a consortium to launch Libra Facebook still associates with this new financial instrument. How do you launch it in a way that consumers will trust technology quick. A big part ofho this is the Regulatory Framework. Earlier this year i wrote an oped calling for clear rules for the internet in this area there is already clear rules but with the other areas we talked about today like more guidance on electoral advertising and privacy and data portability. We are add a moment where too many important decisions are being made by the Big Internet Companies i feel like we make too many important decisions its better off if we have clear rules around these things. In the area of Financial Services there are already some clear regulations that people just dont need to trust what they are doing but that the government and those rules that are established are being followed. There is tremendous work left from the reputational standpoint. I do wonder how successful libra and calibra can be while facebook tries to gain its reputational flooding. Like many colleagues i have concerns about cryptocurrency like bad actors and networks and terrorist we use the product. I want to ask you about some cyberrisk and what you would do if things go wrong. If they find a way to hack the technology he was liable . That depends on where this security vulnerability is if it is within our services and i assume we are liable that this is something they will review with stability or other types of concerns this is why i am committed until we have ytclearance from all the regulators. I hope you wont exclude congressmen and where it isth appropriate to revisit that Regulatory Framework and i back. To recognize for five minutes. Can we have a break after this round . If we could stop here. I am drinking a lot of water. [laughter] [inaudible conversations] we will start the clock over. We will allow ms. Porter for her questioning that we will break right after that for quite understand there is a vote for go thank you. Mister zuckerberg sometimes facebook can be an unkind flace and today apparently toward your haircut as a mother of a teenage boy thank you for modeling the shortcut. [laughter] that we have responsibility to protect our data do remember making a statement quick. Yes. And those privacy principles you can own and delete your information and we are accountable for go today you can affirm that facebook cares about your privacy to those standards of the Public Policy quick. We certainly care. If that is true and adhering to the principles then why are you arguing in federal court they cannot hold you liable for any of these promises because as they admit every user bound by the terms of service that releases facebook from liability for contract and commonlaw claims. I am not familiar with that specific legal argument. It is up there for you. You are arguing in federal court the Consumer Data Privacy lawsuit that the information was stolen has failed to articulate any injury. No harm no foul but it doesnt matter. Is that your position . I amm not sure of the context so its hard for me to weigh in. As ceo and im responsible for everything that happens in the company. All that i am saying is that i imagine that there are more pages in this document im going to take that as a no for right now. I think the American People are tired of this hypocrisy. Ive been in congress ten months and ive already lost count of how many people have sat in exactly that chair and said one thing to me and congress and did another in federal court. Another issue, facebook is a great place to work, great employee benefits, but it doesnt use its employees for the hardest jobs of the companies. You go out to contractors, watching murders, stabbings, suicides, other gruesome videos for content moderation. Correct . I believe that is correct. You pay many of them under 30,000 a year and have cut them off from Mental Health care even if they have ptsd because of their work for your company is that correct . Congresswoman, my understandingea is we pay everye including the contractors associated with the company at least a 15dollar minimum wage. There is a high cost of living as a 20dollar minimum wage. Wage. We go out of our way to reclaiming my time. According to one report i have come and this is from an episode ef black mirror, they get nine minutes of supervised wellness time per day that means nine minutes for crying in the stairwell while somebody watches them. Would you be willing to commit to spend one hour a day for the next year watching these videos and acting as the content monitor and only accessing the same benefits available to your workers . Congresswoman, we work hard to make sure we get good benefits to all the folks reclaiming my time would appreciate a yes or no, would you be willing to act as the content moderator and Life Experience . Are you saying you are not qualified to be a content monitor backs how many lobbyis lobbyists . I dont know the answer to that. Five dozen lobbyists, and i wont ask about the timing of your announcement too invest 1 billion into the housing chair a day before the testimony before the committee. You may respond in writing. My time is expired. The committee will recess for five minutes. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] recognized for five minutes. Thank you, mr. Mark zuckerberg. Thanks for being here and i also want to thank the chairwoman for having us here. You said a lot of the day i dont think could have been set isaidin the last hearing so it s important to have you here h and your responses to the questions have beent very direct and helpful so thank you for that and very much for being here. I just have a few quick questions about the Libra Association. On the website, one of the benefits before mr. Marcus appeared before the committee was that those contributing who joined the association could derive dividends from the coinvestment tokens and that has since been taken off. Could you elaborate on that . Sure, congressman. There has been an idea that in order to encourage marketing of the Payment Service that there might be some investment other companies could make into this and some return that they could make, but that idea has either morphed or been abandoned at this point. Im not sure exactly the current state that is what you are referring to. Do yoto. Do you think that is a reason some of these bigger players pulled out of the association or do you have a theory on that . I dont think that that is related would be my guess. I know that they could have invested if they wanted to under ththat program, but im not sure that they were planning to. And so i kind of want to close on this line of switzerland. I traveled with the chairwoman to switzerland and we found an environment of air that seemed to be very pro bringing the association to switzerland and one of the things that was troublingro to me was this idea that weve got a great American Company like facebook and a Great American Success Story like yours solve this pushing this idea on foreign soil and in testimony one of the things you said i believe this looks at americas Financial Leadership as well as the Democratic Values and oversight around the worlds. If america doesnt innovate on our Financial Leadership is not guaranteed. Those are your words and i agree with you, but why not bring this to the United States even if it means saying we tried this. We couldnt get our fellow americans are congress on board, but we think we will have more success here at home. Why not give that a shot . Congressman from our subsidiary involves a lot of the other organizations. A lot of the work that we are doing is happening in america. Areplatforms that we Building People might be able to use it as the project moves forward and those are American Products that have carried our values and is contemplated that the reserve, the independent association with the primarily american dollars, so weve talked at length today about some of the reasons why it might make sense to headquarter International Association and a place a lot of other International Associations are headquartered, but i wouldnt take away from that but this isnt still going to be an American Innovation extending americas Financial Leadership around the world. I would just say this before the hearing i had two issues one with some of the issues facebook has had over the last few years a lot of them have been placed in this hearing today and the other was the whole issue of moving us to switzerland, and i just would say i think youve done a good job in answering our questions today. Any company as large as yours is going to have problems and will continue to have problems and so i am not so much against the idea of facebook pursuing an innovative ideas but perhaps i would have inp the past. Its difficult for me to get onboard witonboard with somethio big being in another country and i would employ you to consider bringing this home perhaps as things move forward. You said i you would pull out of the association efficacy direction you dont want to go. I would argue that you have enough influence to bring this home and keep this american and i would ask that you consider that and i will yield. The gentle woman from iowa is recognized for five minutes. Think you chairwoman and for being here. I asked my constituents what they would like to ask you and the chairwoman, i would like to introduce into the record. Without objection such as the order. Im going to think about privacy in a second, but i want to start by reminding everybody here of facebooks mission. It says the mission is to give people the power to build community and bring the world closer together. If your goal is to bring the world closer together, i believe that requires you taking your response ability for our elections very seriously. Y. I know yesterday there were new attacks from russia and iran many of them targeting swing states, and i take this very personally because those are my would likes and i you to keep that in mind when etyou are thinking about people who are being targeted. I dont want to spend too long makes it a target for those kind of attacks and a facebook is going to remain essential to help americans communicate, i need you to work tharder to prevent these kind f attacks. But moving on, lets start with a couple of basics. How Many American adults have a facebooks account . Actually, i dont know the exact breakdown of the top of my head. They believed u. S. And canada combined his 240 million or 85 of the adults at the second question would be i know substantially all of the facebooks 55 billion in revenuehe last year came from advertising is thatkn correct . The vast majority comes from advertising that is correct. So 50 billion at least you advertising. Rom and i believe this year you said you want to make sure that folks have an opportunity to control their data privacy. I believe you said this last year that you are going to make sure folks hav have that opporty come even when they are not logged into facebook is that correct . Lk congresswoman, im not sure what you are referring to, but in general, yes people should have control over all their information in all forms. Do yoforms. You collected data on people that dont even have an account with facebook . Congresswoman, there are a number of cases where a website or app might send a signal to things they are seeing and we might match that on our services or somebody else might send us information, but somebody that isnt on the service in which case we likely wouldnt use it. So you collected data on people that dont even have an account, correct . Im not sure that is what i just said. You are loading some of these contacts and ready about somebody that might not have a facebook account is that correct . Congresswoman, if you are referring to a person uploading their own contact list and saying that the information on their contact list might exclude people who are not on facebook, then sure, yes in that case. So, facebook then has aon profile of virtually every american and your Business Model is to sell ads based on harvesting as much data as possible from as many people as possible. So, you said last year you believed there was a reasonable principle consumers should be able to easily place limits on the personal data that Companies Collect and retain. I know facebook users have a setting to opt out of the Data Collection and they can download their information, but i want to remind you with a us what you sn your testimony. Itsebeb about putting power in peoples hands. If one of my constituents doesnt have a facebook account, how are they supposed to place limits on what information your company has about them when they collect information about them but they dont have the opportunity to opt out because they are not on facebook . Congresswoman, respectively i dont agree with the characterization saying that if someone uploads their contacts that is just one example. Acknow theres multiple ways you are able to collect data for individuals, so im asking you for those folks that dont have a facebook account, what are you doing to help them place limits on the information your company has about them . Congresswoman, my understanding is not that we build profiles for people who are not on our service. There may be signals that others send to us that include people who are not in our community, but i dont think we include those in any kind of understanding of who a person is or isnt on our service. I appreciate that. What actions specifically are being taken so that people that dont have a facebook account have the power to limit debate about your company is collecting . Congresswoman, what i am trying to communicate is that i believe that is the case today. I can get back to you on all the Different Things that we do in terms of control. That would be great because we absolutely need some specifics around that t to makee people can protect their data privacy. To conclude, facebook is now tracking peoples behavior in numerous ways whether they are using it or not. Its been used to undermine our elections and i know you are to aware it is the most trusted name so im asking you to think about what needs to be fixed before you bring the currency to market. Thank you. Re the gentleman from virginia is recognized for five minutes. Thank you madam chairwoman and mr. Mark zuckerberg for appearing today. It seems facebook is somewhat of a regular fixture that the committee these days, so my first question is simple but very thoughtprovoking. How realistic is a trail was the social network . By the way and the reason i ask that question i think we are getting to the beginning of social Network Number two and i want to be in charge of my own testing. So as we go forward. I think your life story is impressive. I think the ingenuity and hard work you can aspire to have the american dream, however, i was part of the r d infrastructure at the office of secretary of defense and i had to do a lot of Rapid Reaction or Quick Reaction capability development, so i know the difficulty of trying to do Something Like this especially in a process like you are doing. So i have some real questions. When i was in the dod they played this thing for me when i was trying to get a Technical Briefing and they will not do that today ihe promise you that. I want to ask some real questions here. First though, you talked about the many countriess and i have got a question i looked it up, you know the power of google. 170 million or sohi u. S. Users, 2. 2 billion worldwide for facebook. First question is if that happens, and i know that calibra is a sort of substantiation of facebook and a wallet to hold the independent currency is how i understand it. If you are in all these separate countries and this is a technical question to you believe it is possible to build an algorithmic rules that were some kind of a Machine Learning thing where you can comport or have a m. L. The antiMoney Laundering sort of rolled into the algorithm and in that geographic entity or from that portion, so i was wondering if thats something possiblits sot they could have filled in automatically when you are actually logging in or building your account through a wallet that might not be calibra . Congressmen, this is a good question and we are certainly looking at whether there are elements of the regulations that can be encoded at the Network Level and not just the level of thee individual bullet or paymet companies involved. In terms of how this works in Different Countries around the world, what we find is that the American Standard and regulations they have to be pretty strict and if we can build similar tools for verifying peoples government ids across the world in different places and you can make a centralized investment in that and then have it applied in a number of places and i think that if we comply c with americs laws on this then we will largely be in compliance with most of what needs to happen aroundin the world. There may be some specific things that need to be done differentlyn in some places but the technical complexity would be relatively similar. We have usually prepared questions but now im just going in because you talk about digitizing and we talked a little bi bit of the digital dollars so my question is this. When it comes to the sort of antiMoney Laundering or militia trafficking my background was and followy the money, do you believe and again this is a technical question and not a how far can we go into this, do you believe that its possible you can thank the actor because the entity itself to see if theres any serious activity in that specific token in other words by not going into the privacy portions of this, can we actually track what is happening with the token and at that point may be look as if it is doing something wrong without sort of identifying with the user is where the owner is for the transaction. Congressmen, i think we likely will explore security measures like that just to analogize to another area of our work preventing nationstates from trying to interfere in the democratic process that type of thing that just looking at patterns of activity that kind of accountants are making so we can build these systems that can find among the billions of people using oure services whea group isnt behaving in a way that a human would then we can pass that along to the fbi or the relevant Law Enforcement to help figure out what the right actions to take is, that has certainly been one of effective enforcement measures you would be able to take, so i would so e well explore that here as well. Is it possible to tag a portion of the adjectives rather than the people that actually bought the laboboth the labor ay token itself were i have 15 seconds left, so next week we will be talking about the locations. Im excited about seeing how this goes along. We are concerned based on the aml and where we are going to do with this and i just want to add him tom cruise will be playing oume on social network too. I yield back my time. The gentleman from illinois is recognized for five minutes. Always a privilege to follow you, mr. Cruise. [laughter] thank you mr. Chair and mr. Mark zuckerberg. I understande about a month ago you had a meeting in the oval office with the president and several senators is that correct . Thats correct. Was very notetaker present at the meeting . Congressmen, i dont think there were no takers in any of the meetings. So you are not going to veto aware that anything was discussed at the meeting . Im not aware of any formal record. If yodid you or the president that meeting raise or discuss the antitrust investigations are underway at of justice, federal trade commission or the attorneys general . I dont think so, but the meaning was private overall. I understand there was no record that im asking whether the subject came up. The subject didnt come up, but in general i dont feel like it is appropriate for me to comment into much detail on the private conversations. We are in a public office. Did anyone discuss the policy change allowing the exemptio exf the political figures and parties from the misinformation on facebook in the course of the meeting . Congressmen, no, that didnt come up. I want to dive into that in a little more detail out in the context of your meeting. I understand the testimony here today, you have an aggressive posture against essentially allowing free speech, but blocking the speaker. So, for example if Jenny Mccarthy were to post something saying dont get your kids take that, would you down . Congressmen, we probably wouldnt take that down but its hard to comment on hypothetical without actually looking at the post. Someone with a large part from spreading misinformation on your platform youre saying you wouldnt take it down or you would . I thought you said earlier congressmen come in general our policy is not to ban people from posting things that are false. It is to you can Say Something on your page ifr you want it is an independent fact checker marking it as false we will put a label on it that says independent fact checker marked this as false and we will work it through the network. What we follow with my you were trying to block hate crimes and hate speech and somebody posted affordable antisemitic messages on facebook would you block that . Congressmen, our policy against hate speech do lead to us taking down content completely. Misinformation okay so now let me follow in the last election, art jones ran against illinois a member of the american nazi party. Would he be allowed to speak on your platform in a different fashion than a member of the nazi party that wasnt running for office . Congressmen come im not familiar with who this person is. Im asking whether you can spread hate speech if you are an elected official that you wouldnt be allowed to if you were notr enough capacity. Congressmen, i think that depends on specifics im not familiar with in this case and cant answer to. Thats rather shocking. I dont think it is that is a d question, but fair enough. Let me just ask you some totally hypothetical questions. You dont have to answer any of them and frankly i dont think you want to answer any of them whether or not the First Amendment allows you to scream fire in a crowded theater is an open question that we struggle with and how you would define that whether or not the libra is a Credit Rating system and what it sits under is a hard question. You have the luxury and privilegeen not to have to ask those questions are have to answer those questions. None of us on this side of the aisle have that luxury. We have figured that out. We would have to sort through and you are a smart guy. I have tremendous admiration for what you felt that i would remind you of the wisdom of one of our Great Supreme Court justices, Louis Brandeis is that ulthe greatest danger to libert, the greatest dangers to liberty in the encroachment by wellmeaning but without understanding. Justice brandeis of course also described some of my colleagues like to ask everybody if they are capitalist or socialist. The justice pointed out when we have tremendous concentration of power in the country we only have three choices we can allow the concentration of power to take over government which is to embrace fascism. We cannot allow the government to take over the concentration of power to embrace communism or we can embrace competition. Your luxury, your privilege comes from the fact as a country those of us on this side of the dais have always chosen door number t three. And i hope you have the wisdom to appreciate that. Thank you and i will yield back. The gentleman from minnesota is recognized for five minutes. Thank you madam chair and mr. Mark zuckerberg for being here and staying throughout the entire process. Since i have the opportunity to help close out the hearing i think i can safely say that this t at least the second time youve testified before congress where members and up looking like they have invested absolutely no time learning about new technologies in order hto responsibly question tech companies. I think that is a fair take away from this hearing. Congress is nowhere close to catching up with some of the most basic changes happening in our society. Id like to think the republican leader to Financial Service committee for the recent opportunity to serve as thepe Ranking Member of the Financial Technology task force. In this role i look forward to working with my colleague to foster competitive environment in which American Innovation can flourish. This includes crypto currency come up with Chain Networks in every area. I have serious concerns about the structure of libra to establish outside of the u. S. And i think its incredibly important to distinguish libra from crypto currency and a truly decentralized open Public Networks that wha but what i amt concerned about is congress and american regulators. Unfortunately, my call colleagues have offered what could have a harmful impact on innovation in the United States. A few of these provisions could employ security regulations beyond the actual securities. As the cochair of the caucus i would frequently meet with entrepreneurs to follow the rules and neve never receiving clearance from the regulators that what they are doing is legal and it hasnt been clear whether they are played by the rules of the road whatever received the assurances that the u. S. Government will not come after them. As lawmakers it is our responsibility to explore all aspects of a platform like libra that has the impact to determine what should be passed to have consumers in the American Economy if we dont lead in this area others will. And to address this issue with a curious and open mind to have an exciting opportunity we all understand any new innovation presents risks. With the various risk that should be considered looking at Something Like libra platform to be viewed as a potential global method of payment. But we need to work through that. We should look at these issues intelligently with experts in each of these areas but not band them the legislation identified would do just that and with that testimony you present serious concerns with chinas action and i share this concern but is not one single right of americans especially freedom of speech and due process we can compete not despite our freedoms for because of them apart from private claws closed meetings what is facebook done to engage the entire cryptocommunity to understand and why it should be supported domestically . Al this is why we are organizing where we help to start the independent Libra Association. It can just be one copper on Company Operating by itself and those that are part of the Libra Association are those that have been involved in the cryptocommunity and products for many years before we got into the space. So some of them have talked to you about the work they are doing giving a diverse opinion and representing my views. And leading to more Financial Inclusion. But over time we will want more members of the Libra Association whether or not they want them to or not that help them to educate as well. I look forward to continuing the discussion. The gentleman from massachusetts. I have always maintained those that should be closest to the power to inform policy making. What is clear to me you are close to power and the powers growing. Although there is a disagreement who created facebook you have near unilateral control of the company and because of thatwh 90 percent of shares even if ofl other shareholders would vote the same way it would still fail if you dont supported. Facebook is you and you are facebook. You understand the technological basis but i am not certain you know the stories or that you understand the source or the pain that millions are experiencing with credit and visibility. So in your adult life have you everer been. No. You said that you believed identity is a big problem do youid agree authentication is the major hurdle to access the Financial System quick. Im not sure i think its different in different places around the world. Those that talk about the white paper almost two thirds of one. 7 billion people who dont have Bank Accounts because they lack enough money to open one. This is not valid authentication or banking caused but a tsunami of hurt millions are experiencing with the student debt crisis because of rising healthcare cost and to go find me page to pay medical bills and the racial engine or the wealth gap. You represent the power but i dont know if you understand the pain. People are broke. Is it free to use the calibra wallet quick. That is not a service that is available today assuming we could launch it, it will be free. So there is no fee. That is the goal to make it. So there is no fee. Congresswoman the goal. So if it cost money to buy libra and cost money to use the calibra wallet how does this help people with virtually no money cracks you want to use technology to solve which inherently is an issue of wealt wealth. At the end of the day you are a business. So what is in the business interest for you here . And do you believe in what you are building . Do you . . Ardo you . When you leave behind your childrens inheritance in libra . You believe in what you are building quick. Yes i do. When you leave behind your childrens inheritance . I think that is a fair question because you have proven we cannot trust you with ournc emails or our phone numbers. So why should we trust you with our hard earned money . If you cannot answer yes or no if you are the viewerth childs inheritance quick. I would it is backed. Running out of time. L your recent speech at georgetown talks about how you affected about the start of the iraq war and of more people had a voice to share their experiences maybe things would have gone differently earlier this year now to join as generalcoo counsel the chief deputy if the legal policy and in the fall 2001 daytoday management of the patriot act of the earth off of the torture memo. On that mass surveillance and now she is advising you how to do ithe again is the patriot act reflective of your views or privacy of free speech . Ten seconds lefts is it reflective of your views of privacy and free speech. No i do not agree with all of it. There is a lot in there. That is not what that indicatess maye angelou told us a long time ago when people show you who they are believe them. I yield. The gentleman from indiana. Good afternoon Mister Zuckerberg i appreciate you being here in your thoughtful answers to many of the questions that have been posed and that effort you have undertaken. I do thank you are sympathetic to a lot of the plates around the world including access to the Financial System in those cost with remitting money to individuals who may be farflung around the world. Zeal and passion for harnessing technology to deliver Better Outcomes for a vast number of people is truly inspirational and i appreciate the effortt that you take undertake every single day. So in concert with that i assume you and the others with you with facebook in the Libra Association have made conscientious choices and then to lower these transaction cost so can you talk about the technology . Of the choices that reflects your genuine desire . Not an investment or security. Re thank you congressman. There is an opportunity to build a new financial infrastructure if not completely from the ground up but take out what is been built up over the years. Having something not that that is bad necessarily. But it is in an environment far different from what we have today to make this is the way all systems work. And then you build more things. So were in a different state of technology where the advance advancements block chain and what could be decentralized to help facilitate with calibra. I think that allows a lot of the cost to be taken out of the system. If you look at it today you can text someone around the world it gets there in less than a second. Its easy to use for quite dont see why you shouldnt be able to send money in the same way they shouldnt take days to get ther there. It should be free or extremely affordable. Maybe not completelyk free because we have to comply with regulations but just like the cost of Text Messages used to be very high before there was competition i think the cost of Money Transfer should come down dramatically and enabling that competition with the new way of thinking about the space is what we are going for. I think thats right about those choices made without architecture reflects that as you have articulated with a basket of currencies to be stable and not volatile. It requires central component and you have built that uichitecture to empower these individuals its really easy to talk about those demons that have been unleashed by technology is it easy to forget those advancements as a cause of this technology i want this to reach more people around the world yorty have a tremendous network of two. 5 billion connected to that network. What else can we connect to make it more valuable for facebook but for each of those people that they felt disempowered and operate in a separate Financial Services system i believe in what you are trying to do and also at your word to say the goal is to comply to get the right outcome. Facebook has already done that it is it necessarily facebooks fault that we should reflect carefully to ensure we can develop this technology over time i appreciate that effort you have taken under time were recognized for five minutes. In addition to my job as a member of Congress Held the title of dad for children eight, 11 and 14 yearold twins and keeping themn safe not just for them but those that live in the district because the role social networks play causes me much stress to keep me up at night like you are my kids talking to online . Are they being groomed and what is the exposure to what they see for physical and Mental Health development clicks and with those questions and concerns want to discuss the role that facebook can play to make our kids safe i echo those points if you weeks ago the New York Times published a deeply troublings article on Child Sexual Exploitation that the Technology Companies including facebook recorded 45 million online photos and videos of child sexual abuse content last year. Facebook specifically was the mass reports and thank you for your efforts to crack down on that. That messenger alone was responsible for 65 percent of those reports of 12 million out65 of 18. Four. I know you are aware of that. Would also noted only halfway rethrough the year specialize team had 150 range across my state ofce utah in response to crimes against children they will expect to arrest twice as many this year compared to last year for crimes sexual abuse material. This is clearly a problem in utah and across thech nation and it isnt Getting Better but worse. Yes or no do you believe online social media platforms such as facebook have a role to play even an obligation that the platforms for the vulnerable populations for our children quick. Absolutely we do a lot of work on this as you pointed out and the reason why. So now lets begin with the challenges and the steps it is taking to make sure they will remain protected according to reports what sapp has more monthly usersco over messenger. That according to the New York Times report Facebook Messenger reports 65 percent of all sexual abuse whereas the data shows the companys encrypted messaging app so im curious as to why your most popular messaging app only has a fraction of those instances as messenger is this because it is encrypted and to end and messenger is not quick. Thats right when it is encrypted and to and we cannot see the content itself so we have to do other measures for those connections. That makes sense. You. As you plan to move your messenger to encrypt all communications and to end it is a delicate balance between privacy and child safety but this isnt either or facebook and other companies can have encryption and secure messaging that technology can play a role to keep our children safe even if it is encrypted for quite see great value with more secure data transmissions but it comes with some risk. I am concerned about the endtoend encryption with rocket fuel if we dont get it tright and those repercussions that take advantage of the children. I know you are using your technologies to delete explicit content facebook needs to be doing much more to protect our children moving a move will proliferate the danger if not done correctly. While giving you plausible deniability on your platform. You should prioritize child safety with privacy safeguards and urge you to work with child Safety Experts before taking any steps to put our children in danger. 45million videos of sexual abuse material and we must do better. Our children deserve nothing less. Thank you. The gentleman from new york is recognized for five minutes. Hello Mister Zuckerberg i thank you of all people can appreciate a persons past behavior is a predictor to mike decisions about future behavior with libra what we need to dig into the past behavior and facebook with to our democracy. What year and month did you personally first become aware of cambridgege analytic a. I am not sure of the exact time but it was probably around the time when it became public around march of 2018 i could be wrong. When did Sheryl Sandberg become aware quick. I dont know. Awof was or anyone on your Leadership Team know about Cambridge Analytica prior to 2015 some were drafted internally. I do think i was aware of Cambridge Analytica as an entity i dont know how they were tracking using space bar facebook specifically when was it discussed with your board member quick. I dont know that off the top of my head. This had that catastrophic impact on the 2016 election and you dont know quick. We discussed it after we were aware of what happened. The official policy of facebook now allows politicians to pay to spread information and in the future so i just want to know how far i can push this in the next year so under your policy can i pay to target black zip code and give them the incorrect election date quick. No. Even with these policies of the newsworthiness that they should stay with that general principle. But you said you will not fact check t your ad. If anyone including a politician says things that calls for violence or harm when we roll out the census suppression then we will take that content down. We so there is some threshold to fact check political advertisements. Congresswoman yes for specific things like that. Can i run ads targeting republicans in primaries to say they voted for the Green New Deal . If youre not checking and trying to understand the balance i. I dont know the answer off the top of my head. So you dont know. Do you see a potential problem with a complete lack of Fact Checking on politicalte advertisementsth quick. I think if lying is bad if you run an ad that is a lie that is bad that is different than in our position the right thing to do to prevent your constituents from seeing that you had lied. So you wont take down the lies or you will . That is a simple yes or no. Congresswoman, in a democracy i believe people should see for themselves what politicians. So you wont take them down for you may flag that it is wrong but you will not take it down quick. If it is an organic post. One question. In your ongoing dinner parties those that advance the Conspiracy Theory that White Supremacy theory is a hoax did you talk about social media bias against conservatives and is there quick. I dont remember everything. Can you explain why you named the daily caller a well documented and no official fact checker for facebook quick. Wewi dont independent Fact Checkers it goes through an independent organization that is the Fact Checking network that has a rigorous standard for who they allow to serve. So you would say white supremacist ties publications meet a rigorous standard for Fact Checking . Thank you. We are not assessing that standard the international Fact Checking network sets that standard. You are recognized for five minutes. Thank you for sticking around to answer our questions i know it has been a long day. The difference between libra and calibraj calibra is global Payment System is that correct. That is corrected is tied to a basket of commodities or currencies backed by assets of the Libra Association quick. At that is the current thinking. But it is still fluid. L right. It will be monitored and hindered by the Libra Association. Correct quick. The reserve for the libra Payment System will be handled. That is not for profit. Yes. Calibra is the wallet where you put the libra. That is a whollyowned subsidiary. Correct and calibra is a forprofit entity. Correct. So how would you make your many cracks do you anticipate you will collect fees from vendors like a credit card processor . Will you mind data and use that to monetize from their purchases or all of the above quick. We will not share Payment Information from calibra to the rest of facebook for personalizing services. There is a small number of limited cases we might have to share data as law requires it. How do you make money quick. The method is through advertising overall. People still use that data for advertising purposes. No. Givei w w me a moment. I y will reclaim my time its halfway up. A couple of days ago facebook release the 2020 elections i assume you are aware of this document to protect us election. Yes it does talk about the misinformation does deep fake fall under this umbrella of misinformation quick. It could we are also working on a separate deep fake policy as well make you understand the difference between misinformation and disinformation . Are you aware of the two concepts . Disinformation is deliberately wrong andg propaganda are you aware but is this your position to get into the intent of any type of post to put that information out there quick. Congresswoman its not that is not our responsibility are good to take into account but its much harder to determine intent of scale. I have an example we all saw the manipulated beta video of speaker policy posted on facebook and reposted by others obviously that was a digitally manipulated content. That came out before this policy started so did have a thirdparty independent review of that was manipulated quick. It do it did. I dont know how long the review took but there was an operational mistake on our side which took too long to flagstaff for the fact checker. Once it came out it wasnt altered video and fake, who made the decision to leave it up quick. Our policy with misinformation. That is the policy but what is the recommendation that it had been taken down at any point quick. Congresswoman the policy is clear how we should act with that. We were involved to make a decision if the video came down or stayed up . Congresswoman, yes and this is what the policy is now to recognize this example among others highlighted that we needed a separate deep fake policy that may be different how we treat ordinary misinformation that is what we are working on now with the deep fakeff challenge to work on solutions to figure out what they are and that is how we are proceeding. You are recognized for five minutes thank you for being here before our committee. Does facebook do any business with trump hotels here in washington dc quick. I do not know the answer to that. There had been public reports of enterprises doing business with the trump hotel to curry favor with the administration could you get ssthe answer if you have been doing any business with hotel quick. I will look into it with my team. And you can give us data and information quick. My team will follow up. Is there a chance it books blocks of rooms at Trump International and does not use them quick. I would be very surprised to hear if that is the case. Who in your company would be in charge of the people who would do such bookings quick. Im not even sure because i would be even surprised if thats the thing we would do. Not even sure of what team would be in charge of a thing that i have no idea we are doing. You have no idea. Ive never heard of anything like that happening. I will confirm that after this. But you dont know if facebook has booked for any occasion k a room or a block of rooms at Trump International hotel quick. I am not aware of that. I cant know of all the things the company has not done. You have no knowledge. Correct. Even though what you ared proposing libra will most likely be regulated by congress and the trump administration. Correct. Enterprises of even foreign governments have booked rooms at the trump hotel about currying favor with the administration by doing business there do you worry about that quick. I have seen the story. Are you worried about that too. I understand. To share the concern quick. Yes. Somebody triesou to inappropriately curry favor that is bad. I look forward to sharing that information with this committee. Lets move on to the role of trust. Federal reserve Board Chairman said libra faces many serious concerns regarding privacy come in Money Laundering , Consumer Protection financial security. Trust. So lets look back on the issue of trust and you and facebook. 2009 through 2011 there are many complaints and in 2011 you agreed to settle with the ftc regarding deceptive practices of eight counts of long wrongdoing or breaches of privacy. In 2012 there is a final settlement with facebook because it said you can keep your customers information seivate and you would agree to accept or require their express consent before sharing information. Correct . That was the 2012 agreement. That sounds roughly correct spirit that was Consent Decree with the federal government. Roughly correct spirit did you live up to that quick. That is up for a regulator to decide. Are you aware of the july settlement of a fine of 5 billion quick. Of course. You are 2009 through this very year while under a Consent Decree to clean up your credibility with your customers and protect their privacy and deceptive practices you failed to do that for ten years. Am i correct quick. I wouldnt agree with that characterization. But you settled for 5 billion in recognition of that failure. I will move on. Given your history why should congress and regulators and the public trust you to create the Worlds Largest bank which is a shadow sovereign government . Why would we want you to doouts that quick. We are not creating a bank helping an organization. A Payment System of shadow currency to operate more like a government. In a lot of ways facebook is more like a government than a Traditional Company we have a Large Community of people in more than other Technology Companies we are setting policies. We are like a government. That is facebook. I will and with an expression my son taught me that we earn credibility drop by drop but we pour it away in brackets. Myce hope is that facebook goes back to earning credibility drop bymy drop from those customers you profit from. We have asked a lot of questions. Facebook plays a game of catch up especially with the Africanamerican Community in the United States including theia senate Intelligence Committee and that election made an extraordinary effort with an array of tactics to suppress among democratic voters with that activity on instagram that you also own. It exceeded the reports that say no single group of americanso was harmed. As a black woman who has fought those tactics i implore you to share what ensure your platform does not become a darkk place to amplify hate and racism and bigotry or allow those that wish to do home on harm for those exist today so specifically how will facebook monitor those platforms to ensure youre not creating another avenue of bad actors and cyberterrorist currently using the platform to exploit those positions or interfere in the democratic system. Thank you congresswoman i will first address the election election. So on elections wepr were certainly on our back foot in 2016 while looking for certain types of security threats like hacking and found the russian government was engaged like the fbi and dnc but not to those coordinated operations. We have built very sophisticated systems that we believe are more sophisticated than any company is doing. This monday we proactively identified on our own a new and sophisticated set of attacks coming from russia and iran while these governments are still trying to engage in election interference i hope it gives us confidence we can now proactively identify these threats and dip them in the bed. The bed. So we are aware over the last few years weve had a number of challenges. But what we do is central to the democratic process and then show up and launch it. Thats i would libra we wrote a white paper to invite this conversation because we knew it was very sensitive with a lot of issues to work through openly. I will stop you there. With the recent settlement on the discrimination charges with international discrimination evidence indicating facebook and its algorithmst are still discriminating so why should members of congress are regulators or the public trust that facebook would not intentionally discriminate with libra . How can we trust that quick. On principle that is not something we would ever want to do or be in our interest to do but this is also why there is regulation. Nart of the challenge Internet Companies in particular there is not sufficient regulation in a number of areas. We need privacy legislation and updated portability legislation and there are clear rules on elections that would be helpful because its not clear to me that we want private Companies Making so many decisions on these important areas by themselves. What is the algorithm bias quick. Part of the settlement we made with civil Rights Groups we have agreed to study. We have to figure out the right way to study it because we dont know the race and ethnic background of the people in our community and people dont want us to track that we have to figure out the this researcho so we can understand if there impact. Parate amount of time. The d gentleman from illinois. Thank you mister chairman Mister Zuckerberg for being here today. When your representative from facebook was here a month ago , i heard three positive things about libra. Number one it is a Nonprofit Organization and the aims of creating this project included the banking or the a under banked or more stable system to transfer money and as an immigrant i appreciate all of those things. You have sta said libra and calibra will follow follow federal laws and regulations we have not been clear which apply. You said earlier today you are not seeking a charter so it should be regulated as a bank quick. I dont believe so. That said no. Questions have been raised securities laws apply to a stable coin like libra. Should libra be regulated by the Securities Exchange commission . The ftc is discussing this. You thank you should be regulated by the sec quick. Certainly they get to decide. You wont answer the question Mister Zuckerberg. Are you unable to give clear answers about which laws should apply to your project which is concerning giving your advertising monopoly and your corporate power. We have blurred the lines between commerce and banking in this country. We have run into problems. Thats why im introducing the keep big tech out of financed lot today i dont think we can trust you in 2012 the sec caught you brought breaking the law and told you not to do it again but then you did it again. You did not give a deposition to the ftc as part of that investigation the associate director of enforcementde has said you testified under oath that if you had would have opened you up to a huge amount of litigation outside the ftc maybe that understands the 5 billiondollar payment as part of that settlement that you and other executives were absolved of personal responsibility for all of the wrongdoing during thatce covered. You have the unilateral control over the Facebook Community was 60 percent of the voting shares as other colleagues have mentionedeb facebook as a de facto government with you at the helm you are not accountable even to your shareholders or your board and throughout the day we have heard how you evaded accountability even when the government has attempted to hold facebook accountable for its violations for co facebooks reach and power is now so significant that former un ambassador power pointed out that facebook is worth more than 137 countries in the united nations. How much wealth and power is is too much for a Single Corporation and how much is too much for you quick. R i thank you may have misunderstand my motive. Im certainly not doing this because im trying to make more money i have committed i will give 99 percent of facebook shares away during my life to philanthropic causes through the Zuckerberg Initiative with my wife. s making money is not my main motive. Im trying to use the position that i have to do things that will make the world better to improveo peoples life i think thats what you would want me to do. Thank you for your answer. From all that i have heard in the last month coming into this hearing and your testimony this morning, this afternoon, i think facebook has acquired too much power and has become too big and we should seriously consider breaking it up. Thank you and i yield back. The gentleman from texas is recognized for five minutes. Thank you mister chairman and Mister Zuckerberg for sticking with us for guy had a lot of questions on my list that others have asked so i will do follow up. Went to start by picking up on what my colleaguee asked. Do you agree that leave that one libra is a stable coin. You can characterize it at that. So at least we agree on that. Following up talking about anonymous wallets do you think they should be allowed to exist on the Libra Network quick. I think there are a competing equities and allowing some of that to exist to facilitate the goal of Financial Inclusion but i understand that increases some clrisk. The risk is high and you are asked that from one of my colleagues on the other side of the aisle in terms of compliance with anti laundering laws that is a huge concern. I do travel with the chairman abroad and we did talk to germany who has now said the same concerns the suggestion they also made to bar you from their countries france has already decided to do that. You may be right. It may not work. I am concerned i dont hear a Firm Commitment from you to work on some of theseon issues. Because this is a National Security risk. We cannot afford to have terrorist or Money Laundering made easier that would make it much easier for them to access and while i think the goal is laudable but i agree with my colleague so moving on do you think that the association will be able to work a ratio that is one one to ensure that it will always be stable . I think so. That is the default. But is not the full faith and credit of the United Stateses but a basket of euro and yen and dollar and they fluctuate so the impact isnt too just this country but others so do you have any idea how they plan to manage that quick. That is up to the Libra Association to manage. Thats not under my control but it is regulated. But he is under your control. I dont know if i would say that. But he works for you and in turn is part of the association is on the board so that is a big voice on the board even though you are very careful to call it an association i am suspect ofbo that. Both things can be true if the subsidiary and part of the executive team and also our delegate and a board member but only one. Is chairman of the board of the association. Congresswoman i am actually not sure. Otherwise its a bunch of people in the room discussing the agenda. Lets go wine you responded talking about the number of hewyers the 60 that are asntioned are they working for you quick. Im not sure what you are referring to. Y my colleague asked you about the lawyers litigation in terms of liability issues how many lobbyists do you have here working for you quick. I dont know the answer. You dont know how many you have working for you here in dc quick. I do not know the breakdown of our office here. Even trying to get the Federal Reserve to have a dollar quick. My understanding is we have talked to the Federal Reserve about of a number of things as they are a key stakeholder. It seems if you want to do the un bank that you would have an approach of the Us Government and what better partner could you have. The gentleman from minnesota is recognized. When you get to me you are almost at the end. Congratulations. I celebrate innovation and innovators i wish we had more of both here in congress. Have you read the book future shock quick. I have seen it i have a copy but i have not read it. It defines it as too much change in too short of a period of time it is fair to say regulation is not caught up with the Tech Revolution why we are heree today. A number of questions in 2017 congress released political ads on facebook by agents acting on behalf of the russian governmen government. Some of those were paid for with russian rubles. That is correct 2016 in general we were on our back foot and behind what we needed to be doing with election interferenc interference. And to play a role against foreign election interference and more than 200 elections around the world im confident didnt the systems are in a much better state to make so that prohibits foreign nationals from spending money. Correct that at that Time Facebook was aware precluded foreign nationals for spending money to influence election. Im sure the legal team is aware of that. Time we were not vetting the government id now today one of the measures we have taken to strengthen our protections against election interference is to require a government iad entity and to prove their location to run a political ad. Which i celebrate by the way. We are about to vote on the shield act it is the firewall act to make sure forward many cannot buy political ads. s and now moving to libra will facebook accept libra as payment for advertisements on its site quick. I imagine if it proceeds to that stage we would do that. But we have not developed the full set ofth policies or where that goes into different parts of our system prick of the priority right now is to help the Libra Associationdi to make sure thei subsidiary can design a system to comply with all regulations and secure Regulatory Approval. So what is a collective concern if you can use libra to buy ads onvall facebook and then you can be anonymous so the potential challenge that we fac face. I can assure you we will not allow any weakness to enter into the system that requires verification of peoples government ids to buy political ads. On the subject verificatio verification, i would love to hear your o thoughts if facebook would consider verifying its users so the transactions that we consider what will be a revolutionary initiative of libra to assure that they accounts are verifiable anquick. This is an area where i think we will do a lot more in the years to come we started with political ads and discourse but i do think what you are talking about will be a trend in the development of our systems anything people opare doing with sensitivity we will likely increase verification of government id we can have a clear sense of their identity. There is a cost to do that and introduces friction but there are some equities to balance whether people broadly want facebook to verify that many peoples identities but balance the safety and security question going in that direction is the right thing to do. Is that a competitive advantage or disadvantage to ensure all users are verified quick. I doubt well get to the place every Single Person is verified. But i think certainly if people have verified identities it creates a culture of authenticity and helps us with security across the platform versus those that are using the service on aa daily basis. I yelled back to the gentlemane from texas. Thank you Mister Zuckerberg for being here and i may be the last person. Earlier you mentioned facebook is working hard to protect 2020 elections however we have a major event which is the 2020 census coming up that is particularly important to our country into my district we had a Supreme Court case that they agreed not allowed the question to be asked of the citizenshipp question in the 2020 census. If an ad were to be run stating that democrats that participate the information is turned over to i. C. E. Which is a false statement would you allow such information to remain on the platform . Im not sure i caught the specific example. So if an ad says immigrants who participate in the census their information will be shared with i. C. E. Which is a false statement, would you take thisen down or allow it to stay on the platform if a upolitician hosted quick. Where we are right now we havey, in place a Voter Suppressionwh policy we are working on finalizing that. This isnt Voter Suppression. I agree im trying to answer your question we are extending the current set of policies around Voter Suppression to this policy also we recognize this is important and rises to a level above normal hoax or misinformation that we would just normally market as false by independent Fact Checkers we actually take it down it will do it for censuss suppression. We are working on finalizing the specifics what the policy would be and i suspect we will roll that out in the coming weeks so its hard to answer any specific questions or hypotheticals but the policy is coming we take it seriously. It is egregious and we will be watching out for this. This might be something improper, take it down or a system in place where you work on a system in place to not only take it down when reported but search and destroy this type of negative and improper information thats been disseminated out . In general for our content moderation, its a combination of ai and technical processes to do proactive scanning and then a combination of that and human review. What we found is for the stateoftheart, you want both. You want to use computers and ai to do what computers are best for, basically looking at a lot of things and making quick judgments and you want to use people for what people can uniquely do, make nuanced judgments and often judging l linguistic variations. For the importance of National Security to have a proper count of the people in our country, we would expect for you to be more proactive, i think. Facebook has been a major success, as you know, and i think its continued success will depend on what happens in 2020 because well be watching. I enjoy your platform. I think youve done Amazing Things for this country and around the world but we want you to be responsible and especially when it comes to National Politics and National Issues like the census and we think facebook has a responsibility to do so and i hope that you can follow through on this. Well be watching. Thank you very much. Thank you, i certainly care about this a lot. Now that weve exhausted our members present, i recognize the Ranking Member for five minutes for a closing statement. Thank you for your testimony, mr. Zuckerberg. Clocking at just over six hours, its not a brief hearing. Weve covered, i think, the full range of topics for the fullness of your cooperation, and so, frankly, im not sure that weve learned anything new here as policy makers on capitol hill. Weve covered a lot of topics, but my fear is that we still dont have a deeper understanding of how libra will work, how it might further Financial Inclusion, this question of Cross Border Movement of value and money. Or how it makes access to Financial Services for americans who need it most. We dont have clarity about that. And as i said earlier, have no real concerns about facebook and quite frankly, many of the Big Tech Companies and thats why i said that at the beginning of the hearing, youre here to represent not just your company but Silicon Valley in the biggest of Technology Companies. Weve had an opportunity for our members to express many of what i view as valid concerns about the pitfalls emerging from new technologies, particularly on the privacy front and youve heard it on both sides of the aisle in terms of privacy and the work you acknowledge that facebook needs to continue to do to regain that trust that your users expect. And members to express their anger. The commonalities of the digital age. Some of that fear is rightly directed at facebook, sure, but not all of it and again, there are real concerns about the digital age and about big tech. But make no mistake, for those of us here as policy makers, i think we should have a common understanding that innovation is coming. With us here in washington, dc, or in the United States or without us because there is a very competitive environment we have around the globe with enormous competition. You can just look at a couple of examples dealing with the chinese repression of free speech that gives us great pause as americans and that regime using technology, Sophisticated Technology to repress peoples freedoms as a disturbing sign of what Big Technology could do and could bring to bear on unwitting people. So i think its important we encourage responsible innovation in the United States and important we create regulatory certainty so that we can have innovation occur here, especially when it comes to Digital Currencies and new ways of transmitting moneys. But i think we need to ensure as policy makers on both sides of the aisle that we embrace that next wave of innovation and embrace it in a more fulsome way. And in closing, id like to insert for the records, mr. Chair, a letter dated from just a few days ago from senator rounds, the Senior Center from south dakota to Anchorage Trust expressing concern that innovation in the country is falling behind the rest of the world. And the key outlines, in a very solid way that we need to have some regulatory certainty in order to foster this innovation and so with that, mr. Zuckerberg, thank you for your testimony and i yield back the balance of my time. Thank you, mr. Ranking member, without objections, include that in the record of todays proceedings. Mr. Zuckerberg, i want to thank you on behalf of the committee for making the time to be here today. Id like to thank your shareholders. I think your time is incredibly valuable. I dont quite know how many millions of dollars your shareholders had to lose today for you to be able to spend the six plus hours here with us but thank you and them for making the effort to be here today. It is a heroic effort. Its been a very long hearing, but as weve commonly heard with the great power comes great responsibility and as the head of perhaps the largest Communications Network globally when you talk about interactions and likes and comments and shares and photos and all the different ways that your platform touches people, thats a tremendous amount of power that also comes with a tremendous amount of responsibility and one of the Amazing Things about this congress, we have 441 members to include our territories and that brings to the table the perspectives throughout the country from the great state of North Carolina all the way to the territory of guam in the middle of the Pacific Ocean and when you have some common themes of concern and hesitation and questions that kind of sound similar across this country, that is a responsibility that you have, given the power that you wield with the awesome enterprise that you run in this country. And so on behalf of the American People, i think its important that we factor in the concerns of basing this libra operation in switzerland outside of the legal ability of the United States to be able to so exercise and so regulate. I think its important for us to firmly consider that our concerns arent just limited to the United States of america but our responsibility as the reserve currency of the world to make sure were looking out for the overall currency impacts that a third Party Currency might so present and with that, i think that its very important for us to be able to reflect on those thing, not just as a body but the Libra Association in general and facebook and yourself in particular. And with that, id like to yield the remainder of our time to my. Thank you for coming today. When we talked about the possibility of this meeting, i indicated it may be uncomfortable for you but i also indicated im sure that you know how to handle. I hope you have learned today just how many concerns and questions members of congress and the public have, not just with the libra project. Facebooks diversity failures include an abysmal record of hiring and promoting people of color and women, contracting with diverse suppliers and investing in diverse managers. The Board Diversity numbers following facebooks example. Facebook failed to follow our fair housing laws as inherently discriminatory algorithms. Facebook repeatedly failed to protect consumer data. Facebook served as a vehicle for misinformation campaigns and election interference by malicious state actors and looking to increase massive size to now dominate the Global Financial system. Regarding the libra project, we heard concerns ranging from your failure to unequivocally prevent anonymous use, which means sex traffickers and child pornographers and other bad actors can finance nefarious activities. We also heard repeatedly this project poses a systemic threat to the u. S. And global economy. And i hope youve heard these concerns and will heed our warnings and i think theres a lot more discussion to be done about the way that you have framed your concerns about freedom of speech and the fact that politicians are isolated in your concerns about freedom of speech and youre opening up the opportunity for not only attacks that not necessarily, i guess, would be tolerated if you were doing something Fact Checking and suppression. Very concerned about suppressing the vote. Im pleased that you have information you shared with us about a civil rights awe did thats going to be done because they are going to tell you a lot about how politicians initiate the kind of Voter Suppression. Not simply concerned about Voter Suppression, by others, than campaigns. It is not that were only concerned about governments that are involved in Voter Suppression. Were concerned about democrats versus republicans and independents versus republicans. Independents versus democrats, et cetera, et cetera. This is serious stuff and weve been the victims for far too many years. Exercise in the most creative ways you can imagine and so when you talk about opening up the socalled free speech opportunity, i want you to know that i can envision certain elected officials with billions of dollars who can buy as many ads as they need to buy and that would take those ads to suppress voters in very creative ways. With that, i yield back the balance of my time. Forwarded to mr. Zuckerberg for his response. I ask you to please respond promptly as you are able and without objection, five legislative days in which to submit extraneous materials for inclusion in the record. This hearing is adjourned. A federal Appeals Court heard oral arguments in a case that determines whether an Accounting Firm must comply with the Manhattan District Attorney subpoena for certain financial records including president trumps tax returns berkeley threejudge panel with us court of appeals for the Second Circuit engaged with attorneys oth