Jan 23, 2020

Facebook's rising Democrat problem

Illustration: Sarah Grillo/Axios

One of Facebook's biggest headaches leading up to 2020 isn't election interference or fake news — it's worrying about what a Democrat in the White House could mean for the business.

Why it matters: The Obama administration's warm embrace of Big Tech is no longer shared by many Democratic policymakers and presidential hopefuls. Many of them hold Facebook responsible for President Trump's 2016 victory, assail it for allowing misinformation to spread, and have vowed to regulate it or break it up.

Driving the news: Democratic contenders responded with visceral dislike to mentions of Facebook during The New York Times' recent on-camera endorsement process.

  • Joe Biden: "I’ve never been a fan of Facebook, as you probably know. I’ve never been a big Zuckerberg fan. I think he’s a real problem," Biden told The Times.
  • Bernie Sanders: "You have Facebook and Twitter, Google, enormous amount of the advertising that is done online. These are very, very serious problems."
  • Pete Buttigieg: "[T]hat’s the problem with Facebook. No one company and no one person should have the kind of power that they’ve accumulated."

Between the lines: Tech issues have driven more campaign debate during this Democratic primary season than in previous cycles.

  • Antitrust: Sanders and Elizabeth Warren have called for Big Tech companies like Facebook to be broken up, and most of their competitors have suggested they need more scrutiny and regulation.
  • Content liability: In his interview with The Times' editorial board, Biden suggested that Facebook shouldn't be protected from liability for content users provide.
  • Privacy: Sanders told Vox Media in December that "there should be strict accountability and oversight over the collection and sale of consumer data, especially by major technology corporations such as Facebook."

Be smart: Criticism of Big Tech is coming from both parties. But Republicans and conservatives have historically opposed regulating industry and breaking up monopolies, while for Democrats, it's home base.

  • Congressional Democrats initially pushed for new regulations on digital political ads, but the law eventually fell through without enough Republican support.
  • Democratic FTC commissioners voted as a minority against the record $5 billion Cambridge Analytica privacy fine, arguing that the penalty was too small.
  • Democratic state attorneys general are taking the lead on investigating and suing Big Tech firms like Facebook and Google.

The big picture: Facebook has leaned on its conservative connections under the Trump administration, while its relationship with Democrats has become more hostile.

  • Facebook CEO Mark Zuckerberg has met with Trump on several occasions, most recently for a private White House dinner in October.
  • Facebook board member Peter Thiel spoke out for Trump at the 2016 GOP convention and has helped connect the company with conservatives, libertarians and the Trump administration.
  • Facebook's D.C. policy executive Joel Kaplan sparked a firestorm inside the company when he appeared at the contentious 2018 hearing over Brett Kavanaugh's alleged sexual misconduct to support his old friend.
  • House Speaker Nancy Pelosi last week called Facebook "shameful" and criticized the company for "shmoozing" with the Trump administration.
  • In leaked audio of a company meeting last year, Zuckerberg said an Elizabeth Warren presidency would be an "existential" threat to Facebook.
  • The company has dug in its heels on allowing politicians to say whatever they like in ads, truthful or not — a decision that continues to outrage many Democrats.

Yes, but: Facebook's Silicon Valley-based workforce almost certainly leans liberal, and its chief operating officer, Sheryl Sandberg, is a vocal Democrat.

Our thought bubble: Past presidents have shied away from criticizing or targeting specific U.S. firms, but Trump has erased that norm.

  • Presidents don't have the power to break up companies on their own — that's up to the Justice Department and the courts. But a president can certainly make a company's life miserable.

The bottom line: Big companies of a sufficient size generally avoid becoming associated with a political party because they want to attract customers across the political spectrum and they want to profit under presidents of either party.

  • But for Facebook, a Republican president has been a critical shield against angry Democratic policymakers — and a Democratic one could prove a nemesis.

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Europe nixes Facebook's plea for friendly rules

Illustration: Aïda Amer/Axios

Facebook is doubling down on its big pitch to lawmakers across the globe: regulate us.

Yes, but: Key regulators aren't buying it. Hours after Facebook CEO Mark Zuckerberg met with lawmakers in Europe to discuss the company's new proposals for regulation, a French commissioner overseeing the EU's data strategy rejected the plan, saying "It’s not enough. It’s too slow, it’s too low in terms of responsibility and regulation."

Facebook's decade of unstoppable growth

Despite an onslaught of scrutiny and scandal over the past few years, Facebook closed out the second decade of the millennium stronger than ever.

The big picture: The tech giant brought in nearly $70 billion in revenue for 2019, up more than 25% from the year prior and up more than 1300% from 2012, the year it went public.

Go deeperArrowJan 30, 2020

George Soros: Zuckerberg "should not be left in control of Facebook"

George Soros and Mark Zuckerberg. Photos: Sean Gallup/Drew Angerer/Getty Images

Democratic megadonor George Soros ripped into Mark Zuckerberg and Facebook's decision to not fact check 2020 political ads in a Friday morning New York Times op-ed.

"I believe that Mr. Trump and Facebook's chief executive, Mark Zuckerberg, realize their interests are aligned — the president's in winning elections, Mr. Zuckerberg's in making money ... Facebook's decision not to require fact-checking for political candidates' advertising in 2020 has flung open the door for false, manipulated, extreme and incendiary statements."
— George Soros