[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 wi