Facebook and Google are facing their day of reckoning in Washington
Facebook and Google being called out for online ads, violent content and, in Google’s case, gender pay disparity
By John Shinal
When Facebook asked the Federal Election Commission for a waiver from disclosure rules on political advertising in 2011, its request was backed in force by Republicans and Democrats alike.
But six years after both parties’ national and Congressional leadership committees helped Facebook secure the exemption, the friendly landscape in Washington has shifted dramatically against the company.
What began with loud demands in Congress — to find out how much influence fake news and foreign-sponsored ads on Facebook impacted the U.S. 2016 Presidential campaign — has now spread to both ends of Pennsylvania Avenue.
And the growing number of probes portend trouble not only for Facebook but also for its chief rival, Alphabet’s Google unit, which previously has also benefited from the disclosure waiver for online political ads.
Both companies have grown to extraordinary size thanks to software that helps online marketers advertise products and services to very specific audiences.
The have become favourites of investors and are among the five most valuable publicly traded companies, with Google parent Alphabet worth US$659 million and Facebook valued at US$487 billion.
But as their stock prices have risen, so have the number of investigations into their business and personnel dealings. Here’s a rundown:
•President Trump weighed in, tweeting that Facebook has always been “anti-Trump” and represented “fake news.” The allegation was enough to prompt a reply from Facebook CEO Mark Zuckerberg who argued that the company’s help in registering 2 million voters made it an overall force for good during the campaign.
•A report out of Washington said that the Senate Intelligence Committee will call Google, along with Facebook and social media rival Twitter, to testify concerning how political advertising may have impacted last year’s election. The report said the companies will be called to testify on November 1. Phone calls to Google and Facebook seeking comment weren’t immediately returned.
•And earlier on Wednesday, a member of Congress from Texas said he will call Facebook, Google and Twitter to testify about social media ad campaigns that pushed for a ban on the oil- and gas-extraction process known as fracking. These anti-fracking ads may have been purchased by Russian agents, according to the letter by Rep. Lamar Smith.
•Earlier this month, the Federal Election Commission said it may call the internet companies in to testify in its own hearings, after voting to begin a process that could revoke the above-mentioned exemption on political ads.
•Lastly, Google still faces an investigation by the U.S. Department of Labour, which has accused it of extreme pay disparity based on gender.
And to add to Google’s bad month, the company was also hit with a class-action lawsuit by three former employees over the gender pay issue.
To find out why the two internet giants have become such high-profile targets in the U.S. capital, the letter from Rep. Smith provides a good clue.
Smith’s statement explains that Google and Facebook are now de facto media companies and, in a sense, victims of their own success in developing sophisticated digital-ad technologies.
“Social media platforms...have the ability to serve as an effective propaganda arm conveying specific messages,” Smith wrote.
With the American electorate sharply split along partisan lines, companies that can quickly spread political propaganda are going to face a reckoning.
As the events of this week have shown, such a reckoning in Washington for Google and Facebook has arrived.