A whistle-blower standing before the US Congress. A global scandal involving Facebook, with CEO Mark Zuckerberg missing in action and a series of lesser executives spinning wildly on US television networks. So far, so 2018 — because on Tuesday last week, we had 2018: the remake.
This week started for Facebook with a six-hour global outage and ended with one of its most trenchant critics — Filipino-American journalist Maria Ressa — being awarded a Nobel prize. In the middle of it, a whistle-blower captured the attention of America.
“How is your PTSD [post-traumatic stress disorder]?” I texted Chris Wylie, Cambridge Analytica’s former director of elections.
Three years ago, he was the whistle-blower in the spotlight in the Observer’s investigations into Facebook.
Last week, it was the turn of Frances Haugen, a calm, articulate, authoritative voice from inside Facebook’s civic integrity department whose testimony has proved devastating to the company. She not only spoke compellingly about Facebook’s lies and deceptions, its harm to teenagers and devastating impact on democracy, she backed up her words with hard evidence — in eight complaints to the US Securities and Exchange Commission (SEC) and documents handed to five attorneys general.
She is to testify in the UK parliament later this month.
If there is one thing last week has proved, it is that nothing beats a human face telling a human story. There was much of Haugen’s testimony that was already known or at least glimpsed. Every day for the past three years has brought a fresh tide of Facebook-so-toxic stories — they have just lost their ability to shock.
This is a tale of two testimonies: two testimonies that bookend the first chapter of the beginning of the end of Facebook. Because that is what we are seeing, playing out, in slow motion: the Fall of the House of Zuck. It will not happen today and it is not going to happen tomorrow, but last week the cracks in its foundations became deepening crevasses. It is coming.
Wylie’s testimony in 2018 set the hares running. It precipitated numerous investigations into the company, investigations whose failure explains why, three years on, we are here again. Haugen testified to problems that are a direct result of a corrupt and corrosive internal corporate culture exposed then. Facebook’s executive suite should have been burned down three years ago. It was not.
In 2018, the mask came off — but the authorities failed to hold a single person to account. And we, and our increasingly fragile democracies and fraught teenagers, are living with the consequences.
When the US Federal Trade Commission (FTC) fined Facebook a record US$5 billion for its part in the Cambridge Analytica scandal, the only outcome was to send Facebook’s stock price even higher. After all, what is US$5 billion to a firm worth US$1 trillion?
Moreover, although the SEC found that Facebook had made “misleading disclosures,” including lying to journalists, it allowed the social media giant to settle its suit with a US$100 million fine. No executive was harmed in the making of these penalties. Zuckerberg was not deposed. Chief operating officer Sheryl Sandberg was not forced to account for her actions. Everyone got away with everything.
But now Facebook is in trouble. It is facing many legal and regulatory challenges, all the while in a weakened and bloodied state with its workforce shaken and disturbed. Because its greatest point of failure, at the moment, is itself. One of the most striking differences between 2018 and now was how incredibly organized and supported Haugen has been. An entire industry now exists to welcome and support tech whistle-blowers. More will surely come. Striking, too, was how expertly briefed and informed were the senators who questioned Haugen.
All this has happened in three years. But there is more. There are existential threats to Facebook’s business model, not the least of which is the FTC’s suit to break the company up. State attorneys general, many with cases already proceeding, are scenting blood. A Texas lawsuit names Sandberg for possible market rigging.
Perhaps most toxic of all is the radioactive waste left by the Cambridge Analytica scandal. A new shareholder lawsuit, filed in Delaware, based on freshly disclosed internal documents, claims it can prove that Facebook senior executives and board members lied to investors.
If it can do that, it will set in motion a chain of consequences that will make Enron look like a teddy bears’ picnic.
Three years ago, Sandy Parakilas, an earlier Facebook whistle-blower, explained to me the power of the SEC, which regulates the financial markets, by telling me that in the US, money will enable you to get away with most things.
“But the one thing you can’t do is to fuck with our capitalism,” he said.
The UN found Facebook helped facilitate a genocide in Myanmar. We know that it helped foment an insurrection at the US Capitol, and its own research says it is harming teenagers (A 2019 Facebook presentation slide, just revealed, said: “We make body-image issues worse for one in three teenage girls.”)
That is all fine, it turns out, but if this suit can prove it has lied to investors, someone is going to jail. If I were a Facebook employee, I would be browsing the whistle-blower section of the SEC’s Web site, which grants immunity from prosecution, very, very carefully.
Three years ago, it was Wylie who was caught in the firestorm and, as one of the journalists who put him there, I have had my own strange and unsettling flashbacks over the past week. However, what recent events have reminded me of most forcefully is a judicial report published after the murder of the Maltese investigative journalist, Daphne Caruana Galizia. It described a “culture of impunity” that had allowed those at the heart of the government to believe they could get away with anything.
That is what corruption does — and a similar culture of impunity exists at Facebook. But the gig is up. No one is immune. Not even Mark Zuckerberg.
Carole Cadwalladr led the Observer’s investigations into Facebook in 2018 and is a founder of the Real Facebook Oversight Board.
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