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Why This Facebook Scandal Might, Might Just Be Different

Frances Haugen, the Facebook whistleblower. Photo: Robert Fortunato for CBS News/60MINUTES

Facebook and its associated properties were down for several hours on Monday in one of the company’s worst technological failures ever. But that’s hardly the only problem Mark Zuckerberg is contending with this week. The whistleblower who leaked damning internal documents to The Wall Street Journal has come forward, drawing even more attention to Facebook’s lack of interest in curbing its worst aspects. On the latest Pivot podcast, Kara Swisher and Scott Galloway break down the latest crisis for the company and whether this one might end up actually mattering.

Scott Galloway: This week’s big story: We know the name of the Facebook whistleblower. It’s Frances Haugen … She was a product manager at Facebook working on election interference. On 60 Minutes, Haugen said that Facebook relaxed its standards on misinformation after the 2020 election, shortly before the January 6 insurrection.

Haugen has filed complaints to the FCC claiming that Facebook misled its investors. Nick Clegg of Facebook sent an internal memo ahead of the 60 Minutes episode, calling the claims misleading. Haugen is expected to testify before Congress today. What’s your take here?

Pivot

Twice weekly, Scott Galloway and Kara Swisher host Pivot, a New York Magazine podcast about business, technology, and politics.

Kara Swisher: “What-the-living-hell fuck?” is what you want me to say, right? So they dissolved her team. They had the civic-integrity team, which a lot of people thought was great. And she thought they dissolved it too quickly after the election, while Trump was still disputing it. They shut that down. She’s very well spoken. She’s very clear. She also doesn’t seem crazy — it’s hard to attack her. She seems like, “Hey, I just want the world to be a better place.” She’s very reasonable. She says she’s not in favor of breaking up Facebook. So it’ll be interesting to see what happens. I think nothing’s going to happen from this — I think it’s going to be the same as the last six things. What do you think?

Galloway: Well, I’m famous for predicting Facebook’s ninth life, but I think this is big because she’s Edward Snowden but more attractive and more likable. She’s the daughter of two professors, from I think Iowa, who also ended up at Harvard Business School. She’s obviously pro-tech — worked at Google. She does not come across as having an ax to grind, and also — give me a minute here.

A bunch of our children were dying in auto accidents because of drunk drivers. And then, basically, moms banded together to start this organization called Mothers Against Drunk Driving, and it basically put pressure on Washington to withhold federal highway funds such that every state raised its legal drinking limit to 21 despite the alcohol lobby and a lot of powerful people. I think this may be big because, quite frankly, I think the cohort here that is going to save us from Facebook is moms. And I think when mothers have heard about anorexia and depression being caused by Instagram, and they read this research — it’s like, “You fucked with the wrong sheriff.” I think there’s going to be a group called MAMS, Mothers Against Mark and Sheryl, that is going to go after this mendacious-fuck organization called Facebook.

I’m serious. I think parents, and specifically moms, are probably horrified by this content, and I predicted this a few weeks ago — I think there is now cloud cover. There is now cloud cover to go after someone at Facebook with criminal charges. In addition, talking about incentives — the whistleblower act from the FCC now creates financial incentive for people to start dropping dimes. I think you’re going to have a half-dozen people …

Swisher: That’s what’s going to happen. I know a lot of people in research, and they were horrified by Nick Clegg and what he was saying, throwing them under the bus. I know a lot of people there, and they do great work, and they’re very civic-minded people who do this work. And so is she. She went there because she thought she could help, right? And so they’re very disappointed. And then when they get thrown out of the bus by this British guy, it’s not good.

Now what’s interesting here is that she’s being represented by
the same people who represent a lot of Trump whistleblowers — but she’s not raising the same amount of money because everyone will contribute to Trump whistleblowers, but they’re very scared in Silicon Valley to support her. Someone who I know very well, a pretty high-profile person who supported her online, said, “Have you noticed no one saying anything about her?” She’s worked at Google, at Pinterest, at Yelp, and at Facebook. Very interesting to me, the lack of noise from Silicon Valley on this. So we’ll see if more people internal to Facebook or any of these tech companies start really starting to toss documents — because, you know, everybody’s got documents. And that’s what’s going to matter. If that happens, yes, I think you’re right. The other thing, the second thing, is whether they can find anything in these documents that show that Mark Zuckerberg or Sheryl Sandberg lied to Congress — that could be interesting.

Galloway: Did they have disclosure requirements around some of this research to investors? That’s an SEC violation. And it might be a mid-level person. They might go after a mid-level person, but the algebra disincentive here — we talked about this — or the algebra deterrence, doesn’t kick in until someone shows up on a perp walk. And I think it’s coming. I really do. I talked to Preet [Bharara] about this, and he said he doesn’t see it. And you can almost hear what Facebook is saying internally. They’re like, “Look, guys, we’ve been through this before. Thank you to Ms. Haugen again for highlighting where we need to do better. We’re doing the following things.” But I wonder if it’s different this time. I think they’ve pissed off moms.

Pivot is produced by Lara Naaman, Evan Engel, and Taylor Griffin.

This transcript has been edited for length and clarity.

Why This Facebook Scandal Might, Might Just Be Different