Facebook CEO Mark Zuckerberg is in the hot seat this week, facing dozens of Congressional lawmakers over his company's handling of users' private data. And of the hundreds of questions Zuck has fielded these past several hours, perhaps the most telling came from Senator Dick Durbin (D-Ill.,) who late yesterday afternoon leveled: "Would you be comfortable sharing with us the name of the hotel you stayed in last night?"
The executive's drawn out "Uh, no"--which incited giggles from the audience--actually underscores the vulnerable position his company is in, and the impetus behind the #DeleteFacebook movement, which has led many users to delete their social media accounts in recent weeks. High-profile tech entrepreneurs, including Tesla's Elon Musk and former Facebook executive and WhatsApp co-founder Brian Acton, are meanwhile influencing more Silicon Valley startups to follow suit, and analysts say it's not unwise for other entrepreneurs to do the same.
Seeds of Distrust
Facebook, which long denied having influenced the outcome of the 2016 U.S. presidential election, has come under major scrutiny in recent weeks. Last month, it surfaced that the British political data firm Cambridge Analytica harvested information from more than 87 million Facebook users to create psychological voter profiles, which it allegedly handed over to the Trump campaign. And although Facebook had vehemently denied any legal wrongdoing--the customer data, it says, was made readily available to third-party developers, and the onus is on those developers to use it appropriately--Zuckerberg now acknowledges that more should have been done to safeguard users' private information to begin with. "We didn't take a broad enough view of our responsibility, and it was a big mistake," Zuckerberg told senators in a prepared statement ahead of Tuesday's session. "It was my mistake, and I'm sorry," he added.
The signal point for tech founders, however, may be the distrust that the Cambridge Analytica scandal has sewn for Facebook users. Indeed, as many as 56 percent of Americans say they now trust Facebook the least out of any major tech company, according to a recently-conducted Recode survey, and that's not a figure to ignore.
Rob Enderle, a technology analyst with the San Jose, Calif.-based tech consultancy Enderle Group, suggests that brands should think twice before advertising on the social network, or otherwise deepening their presence on Facebook's platform. "When you have that amount of distrust connected to a brand, whether you are an influencer or an advertiser, that will carry over to your own brand," he says. "When customers don't trust the source, they're probably not going to trust the content."
To his point, Apple co-founder Steve Wozniak recently went so far as to leave Facebook full stop, citing the company's carelessness with user data. "Users provide every detail of their life to Facebook and... Facebook makes a lot of advertising money off of this," Wozniak told USA Today. "The profits are all based on the user's info, but the users get none of the profits back." Wozniak stopped short of deleting his username, however, insisting that he wouldn't want someone else posing as him on the social network.
To be sure, Facebook does not directly make money from selling user data. Instead, it claims to sell targeted access to its users. If you want to, say, broadcast an advertisement to mothers in North Carolina, advertisers can use Facebook to do so.
Enderle, for his part, suggests that it may not be necessary for entrepreneurs to delete their profiles--but that they should nevertheless be smart about how much they use the platform. "If Facebook goes south, you don't want that to reflect on your brand or identity," he tells Inc.
Over the course of his nearly five-hour testimony yesterday afternoon, Zuckerberg deftly fielded questions about an ongoing internal investigation into third-party apps; a recently-introduced "bug bounty" program for finding and eradicating security flaws on the platform; and he expressed remorse, time and again, for his failure to act more quickly in the wake of the Cambridge Analytica scandal. Still, he was careful not to commit to supporting sweeping legislation to regulate the technology industry, and--while he suggested that Facebook might offer a paid tier in the future--he declined to discuss if the company's primarily ad-based revenue model would be shifting.
His coached and occasionally roundabout responses irked several of the senators, including Lindsey Graham (R-SC,) who at one point pressed Zuckerberg as to whether or not the firm had a monopoly. (Zuck's glib answer: "It certainly doesn't feel like that to me.")
Although analysts generally seem to agree that Zuckerberg held his own, Enderle warns that the testimony is only symptomatic of more trouble yet to come for the social network. The way he sees it, Facebook is an easy target for Democrats and Republicans alike as voters head to the polls in the November mid-term elections.
"The indication is that this is going to be an election issue," Enderle says. "Zuckerberg did as well as could be expected, but I don't think anyone in that situation would come out clean. Given the problems [the company faces,] the end result is going to be that things get worse, regardless of his performance."