A harshly critical independent audit of Facebook's civil rights record and contentious meetings with the organizers of a growing advertiser boycott are signs that the company's strategy of prioritizing free speech may be unsustainable, Axios' Sara Fischer and I report.

The big picture: CEO Mark Zuckerberg's policy of making small concessions to those who demand that it curtail hate speech and misinformation on its platform while otherwise giving users a much freer rein than other platforms allow is facing tough challenges, as U.S. public opinion shifts strongly towards civil rights and the 2020 presidential election is fast approaching.

The audit: Some of Facebook's choices have constituted "significant setbacks for civil rights," according to the most recent audit that Facebook itself commissioned, obtained overnight by the New York Times and set for full release today. (See story below.)

The meetings: Facebook's leadership tried to placate the organizers of a burgeoning ad boycott Tuesday during two tense video conferences, but the civil rights leaders say Facebook offered platitudes rather than action.

Between the lines: It's the second time in two months that top civil rights leaders emerged dissatisfied and frustrated from meetings with Mark Zuckerberg and his lieutenants. The failure of a previous meeting in June led to the boycott, and it seems likely this meeting will only but widen the gulf between the social network and its critics.

Details: In the first of two Tuesday meetings, which civil rights leaders say was called for by Facebook, Free Press co-CEO Jessica González, NAACP CEO Derrick Johnson, Color Of Change president Rashad Robinson and Anti-Defamation League CEO Jonathan Greenblatt met with Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg, chief product officer Chris Cox, as well as other Facebook policy and product executives.

What they're saying: The four boycott organizers spoke Tuesday night with Dan Primack for a special edition of the Axios Re:Cap podcast. They confirmed that the boycott was the outgrowth of long-simmering frustrations that only intensified following the June meeting with Zuckerberg and Sandberg.

• "For us it's been building and building," Greenblatt told Primack.
• Greenblatt said that the final straw was the company ignoring the fact that white nationalists were organizing on Facebook in the wake of the killing of George Floyd.
• "We had tried everything," Robinson agreed. "For a number of years, we have planned and thought about boycotts and pulled back."
• Johnson of the NAACP noted that his organization had led a "log off Facebook" campaign back in 2018 after word broke that Russia had used Facebook to subvert the 2016 presidential election.

Facebook, for its part, offered a tempered response. "This meeting was an opportunity for us to hear from the campaign organizers and reaffirm our commitment to combating hate on our platform," a spokesperson said.

Boycott organizers also complained that Facebook didn't meet any of its list of 10 demands, like "creating an internal mechanism to automatically flag hateful content in private groups for human review" or "create expert teams to review submissions of identity-based hate and harassment."

The bottom line: Facebook isn't likely to report material revenue losses from the boycotts when it announces its second quarter earnings in three weeks, but the saga has weighed heavily on the firm's reputation and morale.

Our thought bubble: It's going to be a lot harder for advertisers to come back to Facebook while boycott leaders are still urging them to keep it up.

The findings from a new civil rights audit commissioned and released by Facebook show that the tech giant repeatedly failed to address issues of hatred, bigotry and manipulation on its platform, Sara reports.

What they're saying: "Unfortunately, in our view Facebook's approach to civil rights remains too reactive and piecemeal," the auditors wrote.

• "The Auditors do not believe that Facebook is sufficiently attuned to the depth of concern on the issue of polarization and the way that the algorithms used by Facebook inadvertently fuel extreme and polarizing content."
• The report is especially critical of Facebook's policy of giving politicians extra rein.

Ahead of the 2020 election, the auditors slammed Facebook for not doing enough "to limit misinformation and voter suppression."

• "With less than five months before a presidential election, it confounds the auditors as to why Facebook has failed to grasp the urgency," according to the report.

Details: The nearly two-year long audit was conducted by civil rights veteran Laura Murphy and Megan Cacace, partner in the civil rights law firm Relman Colfax.

• Facebook COO Sheryl Sandberg said in an online post: "We have made real progress over the years, but this work is never finished and we know what a big responsibility Facebook has to get better at finding and removing hateful content."

The CEOs of tech's four leading giants will defend their industry's growing concentration of power from critics on both right and left who view them as monopolists when they testify, most likely virtually, before Congress on July 27, Axios' Scott Rosenberg and Margaret Harding McGill write.

Why it matters: The joint appearance by Facebook's Mark Zuckerberg, Apple's Tim Cook, Amazon's Jeff Bezos and Google's Sundar Pichai will mark a historic collision between the leaders of an industry that has changed the world and political leaders who believe those changes have harmed democracy and individual rights.

This quartet of CEOs has never shared a stage — and thanks to the pandemic they are unlikely to do so when they answer questions from members of the House Judiciary's antitrust subcommittee.

• The medium of the event itself — it's expected to take place via internet videoconference — is a sign of how profoundly the tech industry has reshaped public life.

Background: The last time Congress took on Big Tech at this level was in April 2018, when Zuckerberg appeared before committees from both the House and Senate to defend Facebook in the wake of the Cambridge Analytica data privacy scandal and questions about its role in the 2016 election.

• Pichai also testified before House Judiciary in December 2018 about charges Google is biased against conservatives.
• Cook testified about Apple's taxes before the Senate's Permanent Subcommittee on Investigations in 2013.
• Bezos has never appeared on the Hill.

These CEOs follow in a long line of powerful industry leaders who have volunteered to take their lumps before lawmakers in hope of forestalling punitive legislation and winning over the public.

• Bank CEOs and pharma CEOs both testified before Congress in group panels in 2019.
• In 2008, CEOs of the big three U.S. automakers showed up for several hearings related to financial-crisis bailouts, and faced criticism for flying in on private jets.
• Oil CEOs defended record profits at a 2005 hearing.
• In previous eras, Congress hauled in John D. Rockefeller, J.P. Morgan and Andrew Carnegie.

The appearances don't always pay off.

• Bill Gates' defiant, sometimes contemptuous Senate testimony in 1998 helped ensure that Microsoft would end up targeted with a federal antitrust lawsuit.
• When seven tobacco company CEO told Congress in 1994 that cigarettes aren't addictive, they cemented a reputation for deception.

How it will work: The format for the tech hearing has not yet been finalized, according to several sources, but the most likely scenario right now is testimony from all four CEOs on the same panel, rather than one after another.

Of note: Microsoft, the target of Washington's relentless scrutiny 20 years ago, is no longer grouped with the other companies as a target for inquiry.

• This is either a sign of Microsoft's latter-day success at finding accommodation with regulators and the public, an indication that the company isn't the dominant force it once was — or, most likely, a bit of both.

Our thought bubble: Steve Jobs never testified before Congress.

As the pandemic continues to reshape office work, Microsoft is adding new features to Teams that aim to make video calls more human and less exhausting, including a new "together mode" that puts all participants in a single virtual environment.

Why it matters: Millions are stuck with video conferencing as a key work tool for the next many months (and possibly longer). That creates a huge incentive for tech companies to create a better experience in a market currently dominated by Zoom.

How it works:

• Teams' Together Mode displays the images of the user and all the other participants in a video conference against the same backdrop, ranging from a coffee bar for a couple people to an auditorium for larger gatherings of up to 49 people.
• Since users are in a fixed place relative to others (rather than in one of many boxes moving around in a gallery), they can point at each other and make eye contact.
• The effect is like sitting in a barber chair, seeing yourself and others in the mirror and having a conversation with them.
• Under the hood, the technology draws on understandings from virtual reality applied to a traditional 2D video chat. Indeed, one of the key collaborators on Together mode is Jaron Lanier, a researcher known as the father of VR.

Between the lines: Microsoft-commissioned research finds that people are more stressed out over video calls than over other types of remote work.

• Lanier said that early testing shows those using Together Mode are more calm and retain more than those using traditional video calls.
• "It makes pandemic-era meetings less miserable, less isolating, less fatiguing (and) less weird," Lanier said in a briefing with reporters — although he also acknowledged that the Together Mode setup is still weird in its own way.

Beyond Together Mode, Microsoft is adding other features to Teams, including meeting transcriptions, improved whiteboarding, emoji-based reactions and its Cortana voice assistant.

Trading Places

• Carl Sullivan is joining Flipboard as managing editor for the U.S.
• Simone Ross is now tech curator for TED.

ICYMI

• Walmart plans to launch Walmart+, a $98-per-year service that includes free same-day shipping and other perks. (Recode/Vox)
• ARM is spinning off two units related to IoT devices which will become part of corporate parent SoftBank. (TechCrunch)
• Spotify and Omnicom struck $20 million podcast advertising deal. (Axios)
• AWS pushes into the final frontier with new space division. (Axios)

There are a lot of streaming video services out there. But I wager Comcast NBCUniversal's Peacock is the only one with a cake recipe in its terms of service.