Facebook shares surge as Zuck fends off senators
UPDATE: Facebook shares posted their biggest daily gain in nearly two years as chief executive Mark Zuckerberg put in an assured performance before a combined Senate judiciary and commerce committee hearing.
The social network's founder appeared to make a solid argument that his company was sorry for what it had done, and was taking enough remediation steps that further regulation was unnecessary. However, with a second day of the hearing to go, Mr Zuckerberg is not out of the woods.
Senators gave generally sharp, pre-prepared opening statements but, as the hours wore on, their patchy knowledge of the technologies and concepts involved allowed the Facebook boss to gain the upper hand, according to tech commentator Ben Kepes, and NBR's analysis. Wired called them "simple questions."
Facebook shares [NAS:FB] closed up 4.5% to $US165.04.
EARLIER: Facebook founder and chief executive Mark Zuckerburg is testifying before a joint meeting of the US Senate's judiciary and commerce committees.
Watch live here.
Download Mr Zuckerberg's testimony, which he read before facing a Q&A, here.
The Facebook boss faced hostile opening statements from both Republican and Democrat senators at the hearing.
Senator Bill Nelson of Florida was typical. The Democrat said Facebook had to do a better job at protecting its users' data or face regulation.
Mr Zuckerberg is facing questions over the Cambridge Analytica data mining scandal, plus fake news and fake accounts used by Russia in an alleged bid to influence the last US presidential election, and what's seen as a proliferation of inappropriate comment on the social network.
In his opening remarks, the Facebook boss humbly apologised for the Cambridge Analytica scandal and for being slow to identify fake accounts used by Russia. He outlined steps to tighten up on privacy, including "Much more regular spot checks and audits of apps."
However, he still faced tough questions over why it took so long for Facebook to inform its users about the Cambridge data breach (which also affected up to 64,000 New Zealanders; our Privacy Commissioner says Facebook still has to front up with a lot more information about the incident).
The Facebook boss said by the end of this year, his company would have 20,000 people working on security and policing content. He said AI tools often spotted problematic content first but added that his company was still largely reactive, following up on people's complaints about content or accounts. Some content, like hate speech, was so nuanced that it could be "five to 10 years," before AI could be used to effectively police it, he said.
He also said that the identities of political accounts and the owners of "major" pages would be verified, whether or not they advertised.
One notable exchange saw Senator Nelson raise the recent comment by chief operating officer Sheryl Sandberg that Facebook users might be offered an option to pay to avoid ads.
Mr Zuckerberg acknowledged that was a possibility but said there would always be a free version of the social network.
Democrat Senator Maria Cantwell asked the Facebook chief executive if he was aware of Peter Theil's company, Palantir, working with Cambridge Analytica, or Palantir scraping information from Facebook. Mr Zuckerberg said he was not.
Asked whether Facebook accessed messages on Android users mobile phones, Mr Zuckerberg said it could but only if someone actively opted in (social media posts indicate many who opted in were not aware of what they were opting in to).
Mr Zuckerberg did get a degree of support from Republican Senator Orrin Hatch, who said there was a danger that "over-regulation will stifle innovation."