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Libra and a digital wallet, Culebra raised many concerns relating to privacy. Trading risk discrimination, opportunities for diversed owned financial firms. National security. Monetary policy and the stability of the global financial system. I and other Democrats have called for a moratorium on Facebooks development of his digital currency, Libra and Digital Wallet Culebra until Congress can examine the issues associated with a big tech company developing these digital products and take action. As I have examined Facebooks, various problems, I've come to the conclusion that it would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra Project.


Let's review the record first on diversity and inclusion. Facebook has utterly failed. The Facebooks executive ranks and workforce continued to be mostly white and male since Reverend Jesse Jackson and the Rainbow Push Coalition called upon Silicon Valley companies, including Facebook, to release its diversity statistics more than five years ago. The representation of African-Americans and Hispanics has increased by less than 2 percent. Facebook also told us that they have zero dollars managed by diverse firms on fair housing. Facebook has been sued by the National Fair Housing Alliance for enabling advertisers to engage in discrimination on its advertising platforms.


The US Department of Housing and Urban Development has also filed an official charge of discrimination against Facebook for its advertising practices, including the company's own ad delivery algorithms, which were found to have a discriminatory impact when advertisers did not target their audience in discriminatory ways. I understand that Facebook has refused to cooperate with Heard's fair housing investigation by refusing to provide relevant data on competition and fairness. Facebook is the subject of an antitrust investigation by the attorneys generals of 47 states and the District of Columbia on protecting consumers.


Facebook has was fined five billion dollars by the Federal Trade Commission for deceiving consumers and failing to keep their data private on elections. Facebook enabled the Russian government to interfere with our election in 2016, with ads designed to pit Americans against each other, suppress the vote and boost Trump. For example, Facebook allowed a counterfeit Black Lives Matter Web page to operate with the Globe goal of discouraging African-Americans from voting. Three years later, these activities are still continuing on Facebook.


We learned just this week that Russia and Iran are using the same tactics to meddle in our next election. Now, on political speech last week, you announced that Facebook would not be doing fact checking on political ads, given anyone Facebook labels a politician a platform to lie, mislead and misinformed the American people, which will also allow Facebook to sell more ads. The impact of this will be a massive voter suppression effort. That will move at the speed of a clip.


Your claim to promote freedom of speech does not ring true. Mr. Zuckerberg, each month, 2.7 billion people use your products. That's over a third of the world's population. That's huge. That's so big that it's clear to me and to anyone who hears this list that perhaps you believe that you're above the law. And it appears that you are aggressively increasing the size of your company and are willing to step on or over anyone, including your competitors, women, people of color, your own users and even our democracy to get what you want.


All of these problems I've outlined and given the company's size and reach, it should be clear why we have serious concerns about your plans to establish a global debt digital currency that would challenge the US dollar. In fact, you have opened up a serious discussion about whether Facebook should be broken up.


The chair now recognizes the ranking member of the committee, the gentleman from North Carolina, Mr. McHenry, for five minutes for an opening statement.


Thank you, Chairwoman Waters. Thank you, Mr. Zuckerberg, for your appearance.


Today is a trial on American innovation. There's a growing concern about the role that technology plays in our lives that's warranted, that's necessary. Yes, technologies led to greater prosperity, more freedom of expression and the ability to transcend the limits of space and time to connect us with one another.


It's a powerful tool, powerful tool for our society developed here in the United States. Gone global. But we know there's also a downside to all of this. The vitriol in social media is frightening. The growing inequality between those who have access to the latest tech gadgets remain on the coasts. While folks living in rural America are still trying to get the same connectivity necessary to compete in a global marketplace. Not to mention the anxiety of the age. That's a deep cultural moment for us, not as politicians, but as Americans.


That nervous feeling that you need to check your phone throughout the day. That's something that is now a cultural occurrence for all of us, especially members of Congress, most of whom in this room are doing that right now.


There's a lot of anger out there. And now it's being directed at the architects of this system. That's why you're here, Mr. Zuckerberg. That's why you're here today. You are one of the titans of what we call the digital age. Enormous amount of responsibility and enormous weight based off the innovation you've wrought. And maybe. It's not about Libra. Saw just about some housing ads, no. And maybe it's not really even about Facebook at all. It's that larger question.


And fair or not fair. You're here today to answer for the digital age.


But of course, you're not America's first innovator. And we hope you're not America's last. This is not the first time that America's face difficult questions about technology. Sadly, throughout the history of innovation, a major theme is the exploitation of fear. Politicians enabled by special interests and a lack of understanding of new technology use fear to justify what is ultimately a power grab. New laws, new regulation, but ultimately old and tired ways to centralize power. Here in Washington or other systems of government, some of this has led in the past to comical results and we hope to avoid it now.


But just as one example, there was a time when legislators pushed for what was then called red flag laws.


Which required vehicles, so-called horseless carriages of that age, to immediately stop on the side of the road and disassemble the automobile until equestrians or livestock was sufficiently pacified. But until but other times in history, the use of fear was not so funny. Our last hearing on Libra, for example, was a moment when members of Congress on this dais actually compare the technology, that technology of Libra. To the terrorist attacks of September 11th. Will the gentleman yield?


Look, I have my own games and face. Nice comment. Leave a job. And you. The time belongs to the gentleman from North Carolina. Thank you for taking the bait. Look, I have my qualms about Facebook and Libra. I do. And the shortcomings of big tech. There are many. Yes, there are.


But if history has taught us anything, it's better to be on the side of American innovation, competition and most importantly, the freedom to build a better future for all of us. Progress is not preordained in American progress, and American domination of free speech and global rights is not preordained. Let us not forget that the wave of innovation is spreading across the world with or without us.


So that's why I believe that American innovation is on trial this day in this hearing. And the question is, are we gonna spend our time trying to devise ways for government planners to centralize and control as to who, when and how innovators can innovate? Or will we spend time contemplating and leading the way on the question of whether or not it'll be American innovation that leads the next century? Being led by American values, the notion that we have the rule of law and free speech rights, an American driven jobs and innovation.


Are we going to spend our time building a brighter future for Americans or trying to tear each other apart? I yield back. I'd like to welcome today's witnesses. Oh, actually, you only have one. Mr. Mark Zuckerberg, chairman and chief executive officer of Facebook. This is Mr. Zuckerberg's first appearance before this committee. But I believe that Mr. Zuckerberg needs no introduction. Mr. Zuckerberg, without objection, your written statement will be made part of the record.


You will have five minutes to summarize your testimony. When you have one minute remaining. A yellow light will appear at that time. I would ask you to wrap up your testimony so we can be respectful of the committee members time. Mr. Zuckerberg, you are now recognized for five minutes to present your oral testimony. Thank you, Chairwoman Waters. Ranking Member McHenry and members of the committee. Thank you for the opportunity to testify today. As we sit here, there are more than a billion people around the world who don't have access to a bank account, but could through mobile phones if the right system existed.


That includes more than 14 million people right here in the U.S. Being shut out of the financial system has real consequences for people's lives. And it's often the most disadvantaged people who pay the highest price. People pay far too higher costs and have to wait far too long to send money home to their families abroad. The current system is failing them. The financial industry is stagnant and there is no digital, financial and architecture to support the innovation that we need.


I believe that this problem can be solved in Libra, can help. The idea behind Leber is that sending money should be as easy and secure as sending a message.


Veber will be a global payment system fully backed by a reserve of cash and highly liquid assets. Now, I believe that this is something that needs to get built, but I get that I'm not the ideal messenger for this right now. We faced a lot of issues over the past few years, and I'm sure there are a lot of people who wish it were anyone but Facebook who are helping to propose this.


But there's a reason that we care about this. And that's because Facebook. It's about putting power in people's hands. Our services already give people a voice to express what matters to them and to build businesses that create opportunity. Giving people control of their money is important, too. And a simple, secure and stable way to transfer money is empowering over the long term. This means that more people transact on our platforms that will be good for our business. But even if it doesn't, I still think this could help people everywhere.


Before we move forward, there are important risks that need to be addressed. There are questions about financial stability, fighting terrorism and more. And I'm here today to discuss those risks and how we plan to address them.


But I also hope that we get a chance to talk about the risks of not innovating, because while we debate these issues, the rest of the world is in waiting. China is moving quickly to launch a similar idea in the coming months. Lieber is going to be back mostly by dollars, and I believe that it will extend America's financial leadership around the world as well as well as our democratic values and oversight. But if America doesn't innovate, our financial leadership is not guaranteed.


I actually don't know if Leber is going to work, but I believe that it's important to try new things. And as long as you're doing so responsibly, that's what has made America successful and it's why our tech industry has led the world.


So we co-wrote a white paper to put this idea out into the world and to start a conversation with regulators and experts in governance, and today's hearing is an important part of that process. What we're discussing today is too important for any single company to undertake on its own. And that's why we helped to found the Libra Association, a coalition of 21 companies and nonprofits that are working to give everyone access to financial tools. But even though the Leber Association is independent and we don't control it, I want to be clear.


Facebook will not be a part of launching the Leber payment system anywhere in the world, even outside the US, until the U.S. regulators approve. Last time I testified before Congress, I talked about taking a broader view of our responsibility and that includes making sure our services are used for good and preventing harm, and I want to discuss that across other aspects of our work today as well. People shouldn't be discriminated against on any of our services. We have policies in place to prevent hate speech and remove harmful content, but discrimination can also show up in how ads are targeted and shown to is part of a settlement with civil rights groups.


We've banned advertisers from using age, gender or zip codes to target housing, employment or credit opportunities. We've limited interest based targeting for these ads too. This is part of our commitment to support civil rights and prevent discrimination. I also know that we need more diverse perspectives in our company. Diversity leads to better decisions and better services for our community.


We've made diversity a priority in hiring and we've also made a commitment that within five years, more than 50 percent of our work force will be women, people of color and other underrepresented groups. We've made some progress here. There there are more people of color, women in technical and business roles and underrepresented people in leadership at Facebook now.


But I know that we still have a long way to go. Chairwoman Waters, Ranking Member McHenry and members of the committee. This has been a challenging few years for Facebook. I recognize that we play an important role in society and have unique responsibilities because of that.


And I feel blessed to be in a position where we can make a difference in people's lives. And for as long as I'm here, I am committed to using our position to push for big ideas that I believe can help empower people. Thank you. And I'm looking forward to answering your questions.


Thank you very much. And now recognize myself for five minutes for questions. It is no secret that Facebook allowed Russia to undermine and divide our country through divisive online ads. The Senate's investigation discovered that African-Americans were targeted the most by Russia, specifically in places where Black Lives Matter groups were the most active. Despite all of your technological expertise, Russia and Iran are added again by the upcoming election. Then last week, you announced a new ad policy that gives politicians a license to lie so you can earn more money.


This division, I suppose. Facebook changes the rules when it can benefit itself. Last year, Facebook banned all cryptocurrency ads on its platform because and I quote, they are frequently associated with misleading or deceptive promotional practices, quote unquote. Seems fair. Then earlier this year, Facebook rolled back the cryptocurrency ad ban, bought a blockchain company and announced its own cryptocurrency. So tell us what changed? How did cryptocurrency go from being misleading and deceptive last year and then becomes a means for financial inclusion?


This year, it seems to me that you've shifted your stance because you realize that you can use your size and your users data to dominate the cryptocurrency market. You change your policy when it benefits you. You reinstated cryptocurrency ad because you had plans to start your own cryptocurrency. So this brings me back to your new policy on political speech. My question to you is how does this new policy benefit you? Because it seems that a policy that allows politicians to lie, mislead and deceive would also allow Facebook to sell more ads to those politicians, thus making your company more money.


But you can tell me, how does make Facebook benefit? Gentlemen, thanks for for those questions. I'd like to address all of the things that you mentioned in there on on elections.


You're right that in 2016 we were on our backfoot in terms of preventing Russia from from attempting to interfere in our elections. We've spent a lot of the last few years building systems that are more sophisticated than any other company has at this point. And frankly, a lot of governments, too, for defending against foreign interference. This Monday, we announced that we had proactively identified a network of of fake Russian accounts and a few networks of Iranian fake accounts that we proactively took down, which certainly, as you say, signals that these nation states are still attempting to interfere.


But I hope will also give us some confidence that our systems are now more sophisticated to proactively identify and address these things. On your question about political ads, I look from a business perspective, the very small percent of our business that is made up of political ads does not come anywhere close to justifying the controversy that this incurs for our company. So this really is not about money. This is on on principle, I believe, in giving people a voice.


I believe that ads can be an important part of voice. I think especially in the political process for Challenger candidates and for local candidates or advocacy groups whose message might not otherwise be covered by the media, having ads can be an important way to inject your message into the into may interrupt you for a minute.


Are you telling me? I think as she said to me before, you plan on doing no fact checking on political ads.


Chairwoman, our policy is that we do not fact check politicians speech. And the reason for that is that we believe that in a democracy it is important that people can see for themselves what politicians are saying. Political speeches, some of the most scrutinized speech already in the world.


Do you fact check on any ads at all? Up. Yes. Describe what you tactic on. Well, German actually is. Thank you for the opportunity to clarify. Facebook itself actually does not chat. It does not fact check.


Well, we do is we have feedback that that people in our community don't want to see viral hoaxes or or kind of.


Let me be clear. You do no fact checking on any ads. Is that correct?


Charwoman What we do is we work with a set of independent fact checkers.


Who somebody fact checks on ads. You have you contract with someone to do that. Is that right?


CHAIRWOMEN Yes. And tell me, who is it that they that checked on? Chairwoman, what we do is when content is getting a lot of distribution and it's flagged by members of our community or by our technical systems, it can go into a queue to be reviewed by a set of independent fact checkers.


They can't fact check everything but the things that they get to. And if they pass something as false, then we. All right.


My time has expired and someone else will continue on this line of questioning. And I know. Call on the gentleman from North Carolina, the ranking member, Mr. McHenry, to be recognized for five minutes. So as I mentioned my opening statement, I think there are bigger challenges and opportunities facing America than your ad model or even the question of Leber.


So let let's start with your speech last week. Have you changed your view in terms of technology and China from before your speech on Friday? To what we read and heard from your speech on Friday?


Congressman? No, I have not changed my views in the last week. I don't know, 10 years ago versus today on your view of China in technology versus your speech on Friday. Congressman, I think it's fair to say that my views have evolved. I probably 10 years ago would have been more optimistic that trying to work in China could have contributed to making a more open society. And today it seems that in some cases, working in China not only does not do that, but compromises American companies ability to promote our values abroad and around the world.


And I think we've seen that in the last few weeks in a number of cases.


So you mentioned in your speech said a decade ago, 10 of 10 of the top companies on the Internet were American. Now six of 10 are Chinese. So the question I have for you is why are we seeing emerging technologies driven by blockchain projects and digital currencies being developed elsewhere, such as the case of Libra? Well, Congressman, we have a lot of competition around the world. And you're right that over the last decade, pretty much all of the major Internet platforms have been American companies with strong free expression values.


And I just think that there's no guarantee that that is the state of the world going forward today. Six of the top 10 companies are coming out of China and certainly do not share our values on things like exploration.


So on that, why Switzerland for Libra? Why not the United States?


So the Leber Association is an independent association. We're trying to set up a global payment system. Switzerland is where a lot of the international organizations are.


It also greater regulatory certainty in Switzerland than here in the United States for this type of technology. I think Switzerland has certainly been forward leaning on wanting to work through systems like this. But but I don't want this to come across as if the United States is not.


Well, Congressman, one of the things that I just want to be clear on is that the independent Leber Association is it's independent. We're a part of it. We helped stand it up. We don't control it. But I just wanna make sure it's 100 percent clear to everyone today that my commitment running Facebook is that we're not going to launch anything that is a product or a part of this until we have full support from U.S. regulators, regardless of what the Internet, the project of Libra internally before you handed this technologists idea over to the association.


Let's think of this. Why would you have a project like that? Is it about competition with your peers globally? Is that a component? So sorry, I didn't hear that. So you have no payments platform on Facebook. Facebook is not a payments platform. Is that correct? Yes. OK.


So in seeking to develop a payments platform. Internally, before you painted the technology over to the Association for Libra. Was that because of examples globally of competitors? Creating payments platforms. Congressman, it was partially that, and it's partially because I view the financial infrastructure in the United States as outdated. So there are there are two sets of work that we do on payments. One is building payment systems that allow people to send money on top of the existing financial system that exists.


That work is relatively less controversial. We're doing it around the world, in different countries. On top of existing payment systems, there's another set of work, which is what we're trying to do with Libra. We're just trying to help rethink what a modern infrastructure for the engine for the financial system would be if you if you started it today rather than 50 years ago with a lot of outdated systems. I just look at, you know, the fact that you can send a text message to someone around the world.


OK. But let me let me just drill down on this. Alipay has 900 million users. That is a global competitor. In my view, to Facebook. You see Alipay and we chat pay working. Why not just do a Facebook version of Alipay in order to level this?


Congressman, I think you're right that they're certainly competing not just with us, but all of the American companies on this part of the infrastructure that they're building on as a lot more modern than that than some of what we would have to build on here as soon as we put forward the the white paper around the Leber project. China immediately announced a public private partnership working with companies like that to extend the work that they had already done with Alipay into a digital renminbi as part of the belt and road initiative that they have.


And they're planning on launching that in the next few months.


Thank you. Junto Woman from New York, Mrs. Maloney is also the chair for the Subcommittee on Investor Protection. Entrepreneurship in capital markets is recognized for five minutes. Thank you, Mr. Zuckerberg. You Sadah. And on page three of your testimony that Facebook will not be part of launching Libra anywhere in the world until all the U.S. regulators approve. So which U.S. regulators are you talking about? There are actually many financial regulators are such as the Fed, the FDIC, the S.E.C.


, the S.E.C., the CFTC, the CFP, Fintzen F HFA and many, many more. And to be clear, Libra would affect all of those regulators. So which of those regulators do you believe need to approve Libra before you will support the launch? And what kind of approval do you believe is necessary? Do you need to see written approval from each regulator? Well, those approvals be public.


Congresswoman, thanks for the question. My understanding is, is probably all of them for different things, different of these regulators focus on different areas, whether it's financial stability or fighting crimes and fraud and terrorism. Different different areas of the work need to need to get done and are overseen by different regulators. I think the processes with each of them might be a little bit different, but we're committed to getting all of the appropriate U.S. approvals before launching the Leber payments system in any country in the world, even where those approvals might not be strictly required.


Just to be clear where you commit to waiting until you get approval from every U.S. regulator that Libra affects before you'll support launching Lieberal, yes or no?


Congresswoman, all of the regulators that have jurisdiction over a part of what we're doing, we we are working with them and we'll we'll seek approval from a bill of mine passed the House yesterday, which would crack down on anonymous shell companies in the United States, which has become a nightmare for law enforcement. They are the perfect vehicle for laundering money and for terrorism financing and criminal activity. Now, with the creation of various digital currencies, we face a new challenge with financial transactions being anonymous.


That's why I am concerned that the use of anonymous wallets would make labor attractive to those that are looking to launder money. It's my understanding that calibur wallet won't be anonymous, but I haven't heard anything about competing wallets. So will you commit not to supporting any other anonymous wallets for Libra? I consider this a national security issue. Congresswoman, thank you for this question. I think it builds on a question that the chairwoman was asking before as well about our position on on cryptocurrencies overall.


Well, we we see a range of different cryptocurrency projects out there from completely decentralized and deregulated things to what we're trying to do is trying to build a a safe and secure in a regulated alternative. We think that the the digital payments space needs that of courses as a big company. We're not going to do something that's that's unregulated or decentralized. We're going to work with the government to build something that gets to the same standard on anti-money laundering. And and CFT that that all of the other world class payment systems have or exceed those standards.


Sorry, I forgot the actual question. Yes. Caught up in answering the chairwoman's question. What? Well, I don't think you have. You can have strong anti-money-laundering controls and anonymous wallets. Right. So I see this as a new loophole for criminals looking to hide and launder money. So what is your position on anonymous wallets when you commit that you won't have anonymous wallets, that it be transparent. Otherwise, we'll face the problems that we have with the Elsie's where they are hiding.


Trafficking. Money. Terrorism. Financing, criminal activity of all kinds. It's a huge problem for safety for Americans and it's a huge problem for law enforcement. This is their number one concern was this bill we passed yesterday with bipartisan support. But you're creating a whole new currency that could potentially be anonymous and could hide all types of criminal activity, which is a huge concern to the safety of Americans and national security.


Yes, Congresswoman, I will commit that. Facebook will do what you are saying. Our version of this. Our wallet is going to have strong identity is is going to work with all the regulators, too, to make sure that we are at the standard of AML and CFT that people expect or exceed it. I can't sit here and speak for the whole independent bar association. But you have my commitment from Facebook.


Thank you very much. Now you're back. The gentleman from Missouri, the Delta woman from Missouri, Mrs. Wagner, is recognized for five minutes. Thank you, Madam Chairwoman.


And thank you, Mr. Zuckerberg, for being here when Labor was announced. Twenty eight companies joined as founding members by signing a non-binding letter of intent to join the association. But in recent weeks, many of these founding members have dropped out of the association. Perhaps they're not so sure it's going to work either. Pay, pal. Visa, MasterCard, Stripe Bookings Holdings, eBay and Ricardo Pargo lot. They've they've lost these. You've lost your stable partners, I would say.


And I find it highly concerning. Very briefly, what what do you make of these sudden departures from the association? And why do a number of these founding members have concerns that whether you're up to the task of meeting our money laundering and regulatory standards? Congresswoman, thanks for that question. And this is a this project is too big for any one company to do on its own, which is why we set up this independently breast association with a number of other companies and nonprofits.


It's very it's a very complex project. And and as you say, it's risky.


Why are they departed? Not just scores of of stable partners have dropped out. Why? Well, Congresswoman, I think you'd have to ask them specifically for why do you think they dropped out? I think because it's a it's a risky project. And there's been a lot of scrutiny.


Yes, it's a risky project. So let me move on to something that's near and dear to my heart. As you may know, I wrote in past H.R. 1865 to Fight Online Sex Trafficking Act, widely known as foster sister. I am committed to rooting out online sex trafficking and believe that what is illegal online should indeed be illegal online. Three weeks ago, The New York Times ran a report titled The Internet is overrun with images of Child Sex Abuse.


And I like this of Samandar for the record. Without objection, sixteen point eight million, sixteen point eight million, as confirmed by the Department of Justice. Of the eighteen point four million worldwide reports of child sexual abuse material are on Facebook.


Sixteen point eight of the eighteen point four million these eighteen point eight million reports from last year included a record forty five million photos and videos. These are absolutely shocking numbers. Moreover, it's estimated that 70 percent of Facebook valuable reporting to Nick Beck and National Center on Missing Exploited Children would be lost if Facebook implements its end to end encryption proposal. Mr. Zuckerberg. How much is this vigour growing year after year? And if you enact end to end encryption, what will become of the children who will be harmed as a result that they're not reported?


Congresswoman, thanks. Child exploitation is is is one of the most serious threats that we that we focus on, what is Facebook doing sixteen point eight of the eighteen point four million?


Well, Congresswoman, the reason those reports come from Facebook, I don't know. The reason why there's the vast majority come from Facebook is because I think we work harder than any other company to identify this behavior and reward it.


Are you doing a shot down? These accounts peddle horrific illegal content that exploits women, children. What are you doing, Mr. Zuckerberg, to shut this down?


Well, Congresswoman, we we build sophisticated systems to find this behavior.


Sixteen point eight million and growing the 18.4 images. Oh, Congresswoman, I don't think Facebook is the only place on the Internet where this behavior is happening. I think the fact that the vast majority of those reports come from us reflects the fact that we actually do a better job than everyone else of finding it and acting on it. And and you're right that that in an intended, encrypted world, one of the risks that I'm worried about, among others, to safety is that it will be harder to find some of this behavior.


But you have said you want end, end encryption. What's going to happen to these children? They won't be reported then. And you are responsible. Facebook is responsible for sixteen point eight million of the 18.4. Well, Congress are out there year last year alone again.


I believe there probably a lot more than 18 million out there. And I think we're doing a good job of finding this.


But I think you're right that.


And what are you going to do to shut it down, Mr. Zuckerberg? We're working with law enforcement and building technical systems to identify where you're not working hard and hard enough, sir.


And end to end encryption is not going to help the reporting process. I'm I'm over my time. I have many more questions for you. They'll submit for the record. But we're gonna talk about this and I yield back.


Thank you. The gentle woman from New York, Miss Velasquez, is recognized for five minutes. Thank you, Madam Chair. It's there's all Kimber Brown has pledged it will not share account information or net financial data with Facebook or any third party. We dial customer consent. However, Facebook has had a history of problems safeguarding users data. In July, Facebook was forced to pay a 5 billion dollar fine to the FTC. By far the largest penalty ever imposed to a company for violating consumers privacy rights.


As part of a settlement related to the twenty eighteen. Cambridge analytical scandal. So let me start off by asking you a very simple question. Why should we believe what you and Culebra are saying about protecting customer privacy and financial data? Well, Congresswoman, this is a an important question for us on all of the new services that we build. We certainly have work to do to build trust. I think that the settlement, an order that we entered into with the FTC will help us set a new standard for our industry in terms of the rigor for the privacy program that we're building.


We're now basically building out a privacy program for people's data that is that is parallel to what the Sarbanes-Oxley requirements would be for a public company on people's financial data in terms of audits internally. Any manager who's who's overseeing a team that that that handles people's data has to certify quarterly that that they're meeting their commitments. And it goes all the way up to me and I'll have to certify that on, on, on.


Thank you for your answer. It has been publicly reported that when you acquire WhatsApp, Facebook officials coach the company's founder to tell it. European Union regulators that it will be, and I quote, really difficult to merge or blend data. Between Facebook and WhatsApp and that there was no desire to integrate the two systems. Mr Sol Cumber, 18 months later, the platforms were linked. The European Union fined Facebook for providing incorrect or misleading information. So let me ask you.


Do you understand why this record makes us concerned with Facebook entering the cryptocurrency space? Do you realize that you and Facebook have a credibility issue here? Congresswoman, I understand that we have work to to build trust on this, and that means making commitments. And even if if we learn new things in the future, that that could change our mind on how we should operate, that I think we're going to need to make sure that the commitments that we walk.


Have you learned that you should not lie? Congresswoman, I would disagree with the characterization of what you say, you went to the European regulators and you said that it will not linked. It will not that that it will be impossible. And yet 18 months later, it happened. And you were fined for that. Congresswoman, first up, so let let's continue. I hope that you learned something about that, about not lying Facebook internal model was for a long time.


Move fast and break things. Mr. Zuckerberg. We do not want to break the international monetary system. Last week, the G7 released a report stating that global stable coins could have significant adverse effects, both domestically and internationally on the transmission of monetary policy as well as financial stability. Given the G7's concerns and the concerns voiced by us here today, would you commit to a moratorium on launching Libra until Congress can develop, not the regulators? You said before that you will not move until all the regulators sign into and and support for you to move forward here.


Congress, the people's house have needs to have the opportunity to work on a legal framework so that we provide the guidance to the regulators. Would you commit to that, yes or no? Congressman. Congresswoman, my understanding is that Congress exercises significant oversight over the regulators through these committees. So that would seem to me like the appropriate way for that to happen so that you say, no, thank you.


The gentleman from Oklahoma, Mr. Lucas, is recognized for five minutes. Thank you, Madam Chairman. Mr. Flicker Burg. The problem of addressing under-banked and unbanked individuals is both real and important. However, a significant portion and I know the Leber project is intended to reach this population. However, a significant portion of the under-banked simply do not trust banks. I suspect they may not trust captains of industry or members of Congress either, for that matter. Do you see this as being a major hurdle in the wide adoption of Libra?


Congressman, how do you persuade those people that you're trustworthy and to use the system? Congressman, we've certainly had a lot of issues over the last few years, but I think it's worth remembering that every day billions of people come to our services because they trust that they can share content, messages, photos, comments with the people they care about. And more than 100 billion times a day people do that. They share something with a set of people because they know that that content is just going to reach the people that they want it to.


So I think that if we're able to move forward with this project, there may be some people who don't want to use it because they don't trust us or don't like us. And that's one of the values of having an independent association where there will be other competitor wallets and other approaches, too. But I think that this is an area where being able to put ideas out into the world and letting the market work and letting people choose for themselves what they trust and what services they want to use is probably the right approach.


I just suggest that it will take a lot of energy and effort to reach that group. The underbanked, the unbanked. And it's real and it's growing more substantially. Let's shift focus for just a moment. I also serve along with Congressman Posey on the Science Space and Technology Committee. And those of us who worked on that committee know, as all of us do, that the digital images can be altered to make it nearly impossible to distinguish between what is real and what is not.


Facebook recently launched the Deep Fake Detection Challenge in collaboration with Microsoft and others to address this problem. Now, this seems like a step in the right direction on behalf of the technology companies involved. From your perspective, how great is the threat? Is the deceptive use of deep fake technology? In what ways do you anticipate that the detection challenge will be successful?


Thank you, Congressman. I think deep fakes are clearly one of the emerging threats that we need to get in front of and develop policy around to address. We're currently working on what the policy should be to to to differentiate between media that has been Apulia and been manipulated by A.I. tools like deep fakes with the intent to to to mislead people. And compare that to just normal content that might have been in an interview that might've just been cut differently and so on.


Might not like the way that it's cut. But but but is is not a deep fake and is not not-I'm kind of misleading manipulated content in that way. So we're working on that policy. I think this is a very important area of the deep FICC challenge to technically figure out how to identify these things will it will certainly help inform the policy. And this is one of the areas that I do think is quite important going forward. One final question, many experts have suggested that we need to educate the public on how to consume trusted information.


Facebook recently announced an initiative support projects on media literacy. Could you elaborate on these projects and what you see as Facebooks role given your in critical position within the industry? Yes, Congressman. This question may be premature to ask, although later in the week we actually have a big announcement coming up on on launching a big initiative around or around news and journalism, where we're partnering with a lot of folks to to to build a new product that's supporting high quality journalism.


You know, I think if there's an opportunity within Facebook in our services to build a dedicated surface, a tab within the apps, for example, where people who really want to see high quality curated news, not just social content, but from high quality publishers can go and consume that content and can and that could create a diner in a place where we can form new business partnerships to help fund high quality journalism as well.


So I'm looking forward to discussing that at more length in the coming days. You back to balance, my Madam Chair?


Thank you. The gentleman from New York, Mr. Meeks, is also the chair for the Subcommittee on Consumer Protection and Financial Institutions is recognized for five minutes. Thank you, Madam Chair. This is October. You came in and. Your opening statement sounded great.


I think that your advisors advised you were to what we wanted to hear in interest that you think that members of Congress on various sides wanted.


But words are different than action, sir. One of the first things that I heard you say when you were testifying was that you were interested in the unbanked and underbanked. I cheer, as the co-chairwoman said, the consumer protection and financial institutions. Subcommittee. We had a hearing yesterday with dealing with what we call MDI. Minority depositary institutions. Facebook is a multi-billion trillion dollar company. You concern about the under-banked and unbanked. How much of Facebook money? Is it in the eyes that would provide services and help the unbanked?


Have you invested in any of the minority development depository institutions in America or any place else in the world, any of your money are sitting in those banks?


Congressman, I'm not sure of the answer to that question, but what I do know is a lot of the people that we serve around the world are underbite and this is beyond the US as well.


Well, I understand beyond the U.S., but we're here right now. And you've just indicated that you want to work. And you would not move any place else unless you were in compliance with U.S. regulators, etc.. And what I'm saying is that, for example, I don't even know when you talk about internationally whether or not going after the underbanked, unbanked and underbanked, whether or not you intend to have Culebra and your digital watch wallet register in each of those countries.


So that there'll be a regulatory oversight, because we have found is a lot of individuals, we have payday lenders who say we're interested in the underbanked.


We interesting, though, that are not backed. And those individuals who are supposed to be helped pay more than anybody else. We've got institutions here. Minority depositary. Institutions. And if you want to show that you're doing the right thing, then with all of the money that you have, you can do it here in the United States. And other places also, so that is an answer that you should know. And I would urge you to go back and find out.


And I would almost guess that there's zero dollars there. And you should be dead thereby. Then look at your policy and change it. Because action speaks much louder. Then words. And you do have a trust factor. I mean, I'm mixed met with a lot of your investors who are pulling out of Libra. Let's just look at. The news, because the other thing is most important to me is our democracy and democracies around the world. Now you tell me.


When you look at around the world. It seems to me that Facebook wasn't as Sullivan and many other destructive politics of today. For example, 2016, Russia interferes with U.S. elections. You've admitted that you were caught on your heels. Question is what has been and what will be done for 20 20 Brexit? Another big issue around the world. Misinformation and division's attempts at division and misinformation across North American Europe. Facebook has been systemically found at the scene of the crime.


Do you think that's just a coincidence? Well, Congressman, we operate in almost every country in the world except for China and North Korea. So I think we would be in almost every country where different activities are happening. One thing that you mentioned before that that I agree with is there are a lot of predatory financial organizations. We we ban payday lenders and and a lot of folks like that from using our platform for ads as well. That's certainly we're not interested in.


But what I'm talking about, not only banning, you'll have the best you can put the you have the wherewithal, because if these MDI eyes had the money, then they would be able to put a product because these folks need. Access to capital and financial institutions. I'm out of time. Thank you. The gentleman from Florida, Mr. Posey, is recognized for five minutes. Thank you, Madam Chair and Ranking Member McHenry for holding this very informative hearing for many of us.


Facebook is a reality and our business and our personal lives. I communicate with my constituents as well as my friends through the platform daily. Many benefits accrue from the service. Yet in the midst of these great benefits, great challenges have emerged. And I want to welcome you to this hearing. Mr. Zukerberg? I believe Facebook is a great innovation that has much potential for good that we welcomed and innovation together with the controversies that have spawned. Unfortunately, some in politics and the media see their role as controlling Facebook to censor its users speech.


In April, I wrote you that I was disappointed that Facebook would consider restricting free speech rights to communicate the risk associated with vaccinations. I support vaccinations of children and adults, but I also support open and frank communication of the risk of vaccination. Every person should make vaccination decisions with full information. In recognition of the uncertainties, the risk of vaccinations, the federal government has created a vaccination trust fund that has paid out over four billion dollars to compensate those who have been injured by vaccinations.


There is no more clear or persuasive statement that the risk associated with vaccinations than the existence and the payment record of that fund. From time to time, medical research has established case and context of specific risks associated with vaccinations. I wrote you when another member of the House made claims at the risk of vaccinations should not exist and that Facebook should police communications related to its vaccination risk. Today, you testified you believe in giving people a voice. And Mr. Zuckerberg, is Facebook able to assure us that it will support users fair and open discussions and communications related to the risk as well as the benefits of vaccinations?


Congressman, thanks for the question. We do care deeply about giving people a voice and freedom of expression. Those are some of the founding values of the company. At the same time, we also hear consistently from our community that people want us to stop the spread of misinformation. So what we do is we try to focus on on misinformation that has the potential to lead to physical harm or imminent harm, and that can include especially misleading health advice.


There is a hoax that was going viral a number of months back that was saying to this subject, because our time is very limited.


Are you 100 percent confident that that vaccines pose no injury to any personal this planet, Congressman? I don't think it would be possible for anyone to be 100 percent confident. But my understanding of the scientific consensus is that it is important that that people get their vaccines. But it you said your platform, you want to. You believe in giving people a voice. Doesn't somebody. Shouldn't somebody have the opportunity to express an opinion, different careers? I mean, over four billion dollars has been paid out by the fund over for thousands of people.


Do you think people should be able to have information to make an informed choice, Congressman?


I do. And that's why we don't stop people from posting on their page something that's wrong.


If someone wants to post vaccine anti-vaccination content or if they want to join a group where people are discussing that content, we don't prevent them from doing that.


But what we do is we don't go out of our way to make sure that our group recommendation systems try to show people or encourage people to join those groups. We are. We discourage that.


Okay. Well, how do you discourage if. Well, there are a number of different tactics, for example, if someone is typing in into the search results into the search box, something that that might lead to anti-vax content. We don't recommend anti-vax searches to them. If they if you type in the name of a group. Exactly. You can you can get the group. We're not gonna hide it. We're not gonna prevent you from joining it.


But but we're not going to recommend or go out of our way to to show people content that would encourage people to join those groups.


Well, people can share that content that people harmed by this policy are, in fact, parents with disabled children. And I don't think we or you should be so quick to turn our backs on them. If you look at the statistics, I think you're making a bad mistake. My time has expired. I yield back. Thank you. Thank you very much. The next next gentleman from California is Mr. Sherman. And today is his birthday. Happy birthday, Mr.


Sherman. Your recognize. Thank you. Five minutes. You don't get any more just because it's your birthday.


Donald Trump said crypto assets can facilitate unlawful behavior, including the drug trade. I ask unanimous consent to put in the record a report by Rand talking about cryptocurrencies use by terrorists. Hopefully without objection.


Without objection. Such as the order. Not here to be a.. Facebook. I was amped di cryptocurrency back when you were anti cryptocurrency.


Cryptocurrency either doesn't work, in which case investors lose a lot of money. Or it does achieve its objectives, perhaps in displaces the U.S. dollar as the US or interferes with the U.S. dollar being the sole reserve currency or virtually the sole reverse reserve currency in the world. That role of the U.S. dollar saves the air vege American family a thousand dollars in interest costs because money pours into the United States because of the role of dollar, the Federal Reserve can turnover up to one hundred billion dollars in profits to the U.S.


Treasury. That we in Congress spend because of the power of the U.S. dollar. The U.S. dollar is an excellent currency as a means of of account.


It serves all the needs, except it's really bad for tax evaders, drug dealers, terrorists, and that unmet need can be met by a new currency. If we make drug dealers just 10 percent more effective.


How many American deaths is that? Over the next decade? Does it compare to the deaths we experience from terrorism? We'll have to see. But those who are introducing cryptocurrency have got to pause and wonder what effect they'll have on the power of the United States to impose sanctions right now.


Turkey is stopping at 20 miles into Syria, not because of U.S. troops we were out, but because of U.S. sanctions, because of the role, the U.S. dollar. We stand to lose all that because cryptocurrency is the currency of the crypto patriot.


Mrs. Smith of Alaska has pointed out that you want to. That you're going to wait for regulators to sign off. Regulators are working with old statutes.


Your lawyers are going to show that there's a a loophole in a 1940 investment company act that gets you where you want to go.


And the regulators can't stop you. And you're going to call that regulatory approval as if the people in 1940 knew what you had in mind. What you've made clear is that you will go forward in less.


Donald Trump appointed regulators stop you and in you will go forward if you can just find loopholes in statutes, but you'll deploy a mountain of like a horde of lobbyists to prevent us from writing a new statute. Ms. Maloney asked you a question that you forgot. You still forgot to answer it.


But let's be clear. You're going to be making powerful burglary tools and letting your business partners commit the burglary. You are going with all the power of Facebook to try to create a new currency. You're going to call it the Libra, but you're the person behind it. That's why it's called. I call it the Zuck buck. You are going to create it and then say, oh, it's our business partners. Your white paper says your business partners are going to use your tool to have anonymous accounts and then you have the gall to come here and say you're going to follow all the know your customer.


How do you know your customer with an anonymous account?


Then Mr. Meeks calls your bluff on this idea that you go in creating a payment system for the poor and unbanked. The poor and unbanked need pesos. They need dollars that they can buy something at a local store. You've done no effort to help the unbanked anywhere else and any other time. If and you should, you should create a payment system with a zero with close to zero fee. But the real money is in the tax evaders and to some extent the drug dealers.


I know you've got. At least 100 lawyers will tell you that what you're doing is legal and that you will be safe. But given the harm that this can do, they could be very wrong. And if this explodes the way it might. Especially, you will not be able to hide behind the idea that you didn't create the liberal organization, that it's just your business partners that have wallets designed for drug dealers and terrorists.


I have a few more things to say, but for the richest man in the world to come here and hide behind the poorest people in the world and say that's who you're really trying to help. You're trying to help those for whom the dollar is not a good currency. Drug dealers, terrorists, tax evaders. Thank you. The gentleman from Missouri, Mr. Luke Amar, is recognized for five minutes. Thank you, Madam Chair, and welcome, Mr. Zuckerberg.


I certainly admire you as an innovator and an entrepreneur. You've taken advantage of the economic freedom of this country, and I admire that. I think that's fantastic.


But you now are trying to get into a different world here with this with your Leber experience here.


You know, in the past, you've been dealing with communications systems where people are able to change everything from retail information to personal information. And it was kind of buyer beware in the retail world, in the financial world.


People transact business because they can trust that the transactions are going to be secure from a standpoint of the stability of the dollar or whatever they're exchanging their money in. There's the secrecy of the activity. There's consumer protections as well as, you know, in an IPO, not being able to to do things in any illegal fashion. So that takes a lot of regulation. And as you're finding out, regulation is an important part of financial services world to be able to give people those kinds of protections and earn that trust.


So you've indicated already that you want to conform to the regulation, to be able to be able to do this and earn that trust. Can you continue to? The first question is, can you continue to innovate and and be able to make the changes to this product as it needs to be to be able to conform to the regulation and still be able make this work? Do you believe that that can happen? Congressman, I. I currently do.


I think we'll have to see how this process plays out. But but but I do sitting here today.


Are you willing to stop this project if you see that it can't go forward anymore?


Congressman? I will certainly stopped Facebooks part of it. The independent Lieber's Association is a separate thing that exists at this point. And if I feel like Facebook can't be a part of it. In keeping with the principles that I've laid out. And Facebook won't be a part of it.


I want to follow up on Mr. Sherman's line of questioning through Georgia reserve currency.


What effect do you think that you get implemented, labor implemented here? Would this would have on on the reserve status of the U.S. dollar? Congressman, because the reserve will be primarily U.S. dollars. I actually think that a project like this could be important for extending America's financial leadership and to the contrary of the risks that that are that are being pointed out. We have to be careful about all of the risks around financial stability. And there are certain regulators who oversee that.


And we're also mindful of that. We want to do something that strengthens America's leadership. But I just think that we can't sit here and assume that because America is today the leader, that it will always get to be the leader if we don't innovate. And innovation means doing new things. And that does mean new things have risks. And we need to address the risks. So we need to be careful in doing that.


I personally worry that if we don't do things like this, whether it's this project or other others like it, then eventually we lose our leadership. My time is on. I appreciate the fact that you're pointing out that China is already doing this. That means if we're going to allow them to play in this area, we need to be looking at it as well.


And I think right now the the Culebra says that won 50 percent of the currencies that are in the basket here that they use to set the value of this is a dollar. Is that correct? Congressman, I don't know if that's been fully finalized, but I think principles that will be primarily my concern, though, is that right now that that's good for the United States. But what happens whenever the the board of calibur decides that, you know, the Chinese yuan suddenly is because of the economy, is is.


Looks to be a very stable currency and a growing currency and importance in the world. And suddenly they diminish our our amount down to one third of the value of the the basket of currencies. And now the yuan is one third. And certainly now we have a real big problem, though, standpoint that the currency that is being utilized most around the world is the Libra. And we are only one third of that. That to me, is is concerning.


Does that concern you at all that the association could set this and we would have nothing about it and it would be a negative effect on our our position?


Congressman, that is certainly something that I think we should look at upfront. And I can't speak for the independent association on this, but I think it would be completely reasonable for our regulators to try to look at ways, a restriction that says that it has to be primarily U.S. dollars.


One more quick question, and I know the term will give me enough time for you to answer this, but what is the advantage of Facebook to be involved in Libra?


Sorry for what is what is the advantage? Can't be involved company Facebook to be involved in labor, what is the end game for you to be able to realize a benefit from this? Well, Congressman, we build some of the most widely used messaging services around the world. What's happened? And Facebook Messenger and the vision here is to make it so that people can send money to each other as easily and securely and cheaply as it is to send a text message.


So I think that sending money would be a very useful utility to add for people around the world. In addition to that, the messaging products that we have.


Thanks very much, gentleman from Missouri, Mr. Clay, who is also the chair for the Subcommittee on Housing, Community Development and Insurance, is recognized for five minutes.


Thank you, Madam Chair. Mr. Zuckerberg. The Housing Rights Initiative, a D.C. based watchdog group and an agreed D.C. woman have recently filed a human rights complaint in D.C. in Maryland against seven major housing companies who are accused of using Facebooks and targeting tools to deny prospective 10 is the ability to see housing merits based on their age, which is a protected class under local fair housing laws.


The lawsuit also alleges that Facebook algorithm disproportionately showed the ads to younger users. Mr. Zuckerberg, do you agree to comply with any potential subpoenas and document requests? Facebook might receive seeking information about how housing companies have discriminated. Congressman, I. I imagine that if it's a valid subpoena, we will certainly comply with it. Our legal team will.


Well, will Facebook agreed to produce information about the algorithm where algorithm it uses to discern which ads users receive. Congressman, for a bit of background here, it has always been against our policies for people to use any of our products and especially our ad products to discriminate. We recently, as you as you know, entered into a a settlement with the ACLU and other civil rights groups to remove certain targeting features from from advertising. That way, if you're doing targeting for housing, employment or credit opportunities, you can't target based on age or gender or zip code.


And we also limited the number of of interests based targeting options that were available there as well.


Yeah. But for so many years, you engage your company, engage in that Karaman kind. Was that because it was a lack of awareness? As far as your employees are concerned, as frauds behave in a sensitivity to inclusion, diversity and non discrimination? Congressman, it's always been against our policies for anyone to use the ad systems to discriminate and we enforce those policies through a mix of technical systems and human review.


When this complaint was filed by the ACLU and others, we were able to reach a settlement that we thought would strengthen our policies and our products and help them uphold the principles that that we care about and have always been committed to on this.


Part of this is also agreeing to study further the effects of of of how the algorithm works and what it shows.


One of the challenges that we have here that I think it's worth calling out is that we don't collect data on the race or ethnicity of people who use Facebook. So that is somewhat of a challenge in trying to study whether there are disparate impacts or issues. And it's an open question from my perspective whether one would want us to collect race data on or not on the people who use our services. But that's one of the questions that we need to figure out as we're studying this further.


And let me follow up with that. And then, as you know, despite Facebook commitments to address civil rights, there is no one in Facebook senior leadership with substantial civil rights experience. Why is this? Congressman, this is. This is certainly something we care about a lot. We have people at the company who've worked on civil rights. Recently we we started this civil rights audit that's that's being led by various established folks in the civil rights movement. And and Sheryl Sandberg, our CEO, is personally leading a civil rights task force that we've formalized inside the company to make sure that we implement suggestions from the audit and to make sure this receives our senior attention.


The goods, the audit, independent. Is it independent or is it from within the company? Congressman? Yes. The audit is independent. It is being done by Laura Murphy, who I think is an established leader in this space.


Maria, would Laura Murphy. Are they allowed to publicly report whatever problems they find?


Congressman? Yes. The reports that they're making as part of the audit will be public. And I think that they've already also published some things.


Do you have a right to limit what is said publicly about the audit? Congressman, I'm not sure the answer to that. I think at a high level, the answer would be no, but there may be some specific things around if there's individuals private data or business confidential data or something like that, where where they might not publish it. But broadly speaking, they're going to be able to publish what they believe and what they find. Thank you so much.


You. The gentleman from Michigan, Mr. Hazing is recognized for five minutes.


Thank you, Madam Chair. And Mr. Zuckerberg. You have accomplished something that nobody and I mean nobody thought was possible. Brad Sherman, Shearwaters, many on the other side of the aisle actually agree with and in fact, use tweets by the president to support their position. I never thought I would see the day. But here we are.


You have taken the puzzle pieces of of politics, shaking up the box, thrown them out on the table. And everybody's trying to figure out where they fit when it comes to Facebook and when it comes to this technology use. I don't fault you for what your tool has become because I do believe it is a tool. I want to explore that a little bit.


But first, my my question is what share of of of Culebra is Facebook?


It's I know it's a it's an associate. I'm sorry. Of Libra is as is Facebook. So it's a social nation that you've referenced.


I mean, do you own half of it? Is it equal shares among all the partners? David Marcus, who had been at Facebook, is heading up. Culebra is at one and the same is Culebra Facebook.


OK, Congressman, there are two organizations here. There's the independent Libra Association. Yep. That's what I'm wanting to get to know, which is a nonprofit. So it's not a for profit entity that there's ownership. How is it?


How does the vote. Here's what I'm trying to get at. How does the voting go? Is it what David Marcus says? Is it what Facebook says or is it you can be overruled by others in the association?


That's correct. Right now, there are 21 companies and nonprofits. There are a lot more that want to join each company. A nonprofit organization that's a member has one vote in electing the board. Right now, there are five board members. David Marcus is one of the board members, but is not running Culebra while he's been here.


In fact, sat where you sat. Sorry. Sorry. I just misspoke. He's not running Libra. He is. He is running Koliba, which is Facebook. Yes. Payments subsidiary.


But we are looking for the gameper Association is recruiting and independent directors here. And David is not even on the search committee for that.


OK, so here's I asked him the question because it had been put forward that Switzerland was where you were going to domicile this or at the association was going to domicile.


He he had said that he had been talking to the Swiss regulators. The Swiss regulators said that he hadn't been talking to them and that the association had been talking to them. So I'd like you to clarify that. Have you been talking to the Swiss regulators, Congressman?


Yes. And the misunderstanding there was that I believe that he and the team had been working with the primary Swiss financial regulator, FINRA. And now we're also working with the data regulator.


OK. It's going to be well, you say that you've worked with 30 different jurisdictions in in examining this. Can you provide us with a list of the regulators that you have talked to? Congressman, I can get back to the full list. OK, great. That's all I want. It's not a trick question. I just want to know that. I'd also like to know which U.S. regulators you have. You have been talking to. Congressman, are you asking about me personally or our team?


Well, I mean, you use the royal we on page three of your testimony.


I'm assuming it's not you specifically. I'm assuming it's you and your team. But I want to know who Facebook and Culebra and Libra have all been talking to in the U.S. because I think one of the questions that I have is why Switzerland and why not the U.S. a little bit about as the as the ranking member had started to go down there. And I've got it. I want to move quickly on that, though.


But will you get me a list of those U.S. regulators? Yes. OK, great. Thank you. All right.


Here's the real crux. You said that you won't launch without U.S. regulator approval. What happens if the association decides to launch despite that? Congressman, then I believe we would be forced to leave the association. I would hope that with our that the association will weigh our recommendation and what we say publicly that we think should happen. But if at the end of the day we don't receive the clearances that we feel like we need to move forward and the association chooses to move forward without us, then then we won't be in a position where we will not be a part of the association.


My remaining 30 seconds here, as I said, I believe Facebook is a tool. I breathe, believe cryptocurrency and Libra is a tool. I believe all technology is a tool. It's a neutral tool. Just like a car, a plane, a gun, a knife, all of which have been used at weapons and for nefarious things at times. And all the things that have been used to benefit these various tools are in society, though, regulated.


And, you know, whether it's Ms. Wagner's concern in all of our concern about child sexual exploitation or others, you need to help us understand where the line between people's First Amendment rights. Yours, mine. All of society's lie and the safety of our society, regardless of the platform or tools. So I like to continue that conversation at some point. The gentleman from Georgia, Mr. Scott, is recognized for five minutes. Mr. Zuckerberg, thank you for joining us today.


Back during the 1960s and 70s. Congress passed a series of laws intended to stamp out discrimination in lending and housing, and both Republicans and Democrats in Congress worked to gather and pass legislation like the Community excuse me Reinvestment Act and the Fair Housing Act and the Equal Credit Opportunity Act. All of these laws were designed to target and stop discrimination in the sale and advertising of housing and then particularly redlining. Redlining is a series of practices of cordoning off certain groups of people by race, by geographic area, and systematically refusing to lend to those communities and were even suffering right today from an aftershock of these practices.


Now, it is my understanding, Mr. Zuckerberg, that Facebook allows advertisers to target their messages to certain users or groups of users, both directly by identifying their race, their gender or age, but also by indirectly targeting their education, their interests, their location, their income. And in is investigation heard.


Our federal housing agency found that your platform allowed advertisers to restrict certain users from viewing ads on your platform. And you have even enabled the practice of this dreaded redlining of certain communities, restricting them from housing and employment opportunities. You were charged with this by our federal agency. That protects our housing and lending laws. Mrs. Zukerberg, we in Congress have worked hard for the past 50 years to eliminate the very racial discrimination practices that your platform is guilty of on your platform.


You screen for and you prevent all sorts of criminal activities such as sex trafficking, drug trafficking, even as you mentioned a few minutes ago, you outlaw payday lending, terrorism, illegal drugs. Why don't you prevent redlining? Which is also illegal and criminal as well. Congressman, we we do now our policies have always been to that, that discrimination is not allowed. We recently entered into a settlement with civil rights groups, ACLU and others, an FHA, FHA, a sorry FHA to remove certain categories from our targeting, including age, gender and zip code.


You say to remove. It's simple. You haven't said we have removed. My answer is different. My understanding is this is this is already implemented.


If I'm if I'm incorrect on that, I will get back to you quickly and and update you, but my understanding is that that is already in effect.


But Mrs. Mrs. Zuckerman, I have here HUD's report and it clearly says that juror platform allows advertisers to restrict certain users from viewing ads on your platform and you have even an able. The practice of redlining certain communities. What is your answer? What? I mean, what was your response to HUD? AB put things in practice to eliminate this. Well, Congressman, I think is the beginning of the discussion with Hyde and some of these groups that I just referenced.


We entered into a settlement with the separate with the civil rights groups to to create a new standard where we block that kind of targeting. And I think it's worth noting that the standard that we set is industry leading. I don't think any of the other Internet platforms restrict the kind of targeting that we do for these for these categories. But I think that doing so helps us uphold the principles around preventing discrimination. So I I'm I'm happy and supportive and glad that we're doing that.


Thank you, Mrs. Zakharova. The gentleman from Ohio, Mr. Stampers, is recognized for five minutes.


Thank you, Madam Chair. Appreciate your holding this hearing, Mr. Zuckerberg. Morning. How are you? I'm doing OK.


I understand. That was honest. Thank you. So first, I want to say I appreciate innovation and we need innovation in America.


No, innovation is going to be perfect.


And to the questions that the gentleman was just asking, I want to let you maybe clarify a little bit if I want to advertise housing on Facebook today.


Can I use age, sex and zip code to target people today as we sit here?


Congressman, I believe the answer to that is no, thank you. I thank you. I'm right on this. All right. Just confirmed with my team as well that that is so that you cannot do that today. And yes, that is. Those options are no longer in the system for housing, employment or credit opportunities.


And nobody wants to read line. And I'm I'm sure that was accidental.


But I want to talk about caliber a little bit, because I am concerned about the establishment of a private currency which is used for transactions because I think it does undermine other currencies in the world. There's one hundred ninety five countries. Two of them are sovereign countries too, don't have currency. So one hundred and ninety three countries that you are opening yourselves up to regulation from. Why not just pick another currency? You can you know, the Facebook, you're gonna make money through the transmission of the of whatever it is.


It's not about what currency. Why did you think you had to create a private currency? And I guess I would ask you to maybe go back to your folks and think about whether the the pain you're gonna have in creating a private currency is worth it. But why create a private currency? Why not just pick a currency and use that as part of your payment system? Sure. Thanks, Congressman. The the goal of Lieber's to build a global payments system rather than a currency because it is global in nature.


We figured that it might be better to not solely rely on one country's currency, but because we're an American company and because the American economy is the strongest in the world, it makes sense for any reserve to be primarily U.S. dollars and extend America's financial leadership in that way.


But like you're saying, we clearly have not locked down exactly how this is going to work yet. I personally am much more focused on being able to help innovate and build a global payments system than I am in any specific makeup of what a currency or reserve might look like. And I think that there's already some discussion about whether it might make sense to build the kind of digital payment system that we're talking about based on individual sovereign currencies rather than a kind of combined combination or of these currencies into into some some new some new one.


So that's something that's already being considered great.


And I think you'll find that the Bank Secrecy Act, anti-money laundering, all those things are going to be really hard with the digital currency. And so and ultimately you may find a sovereign country that creates a digital currency that you could then use or you could do it based on several stable currencies around the world. If you're in Europe, you can pick one in America, in the Americas, you can pick one, whatever.


But there are a lot of people around the world who need what you're talking about, this cross-border opportunity to efficiently send money back and forth in countries where there is no stable currency. Think about Venezuela for a second. The Venezuelan bolívar is worth nothing and it's worth less now than it was I just a second ago. So it's there are countries where there is no stable currency and there are millions of people in the world who are hoping that your innovation works.


But I think you may have bitten off more the guinea than you can chew by trying to create a private currency. So I would ask you and I know you're already relooking at it, but I hope you'll think about that because you can make a difference. And frankly, you can have a payment system without creating that private currency. And I think you'll find that the compliance with the individual laws, whether it's anti-money laundering, bank secrecy act sanctions, all those things will be easier to do if you use an existing sovereign currency.


So I would just ask you to to think about that. You can comment if you want to, but I wanted to use my time to ask you to think about those things.


Congressman, thank you. I think those discussions, my understanding, are already happening. Some of them are happening publicly. I think there's been some public comments on this. And and I just want to reaffirm what you're saying about how this could be valuable to people around the world. Right. We serve more than 2 billion people around the world. We serve a lot of people in the United States. But there aren't 2 billion people here. So most of the people we serve in countries that have developing economies that I think could really benefit from this.


Thank you. You're back from Texas. Mr. Green, who is also the chair for the Subcommittee on Oversight and Investigations. His record.


Thank you, Madam Chair. I thank the ranking members. Will thank the witness for being here today. Sir, is it true that the Libra Association oversees the Libra Project? Congressman? Yes. And is it true that. Global corporations make up the association. Congressman. The association is made of today 21 companies and non-profit organizations as well. Of the 21. How many? Are headed by women. Congressman, I do not know the answer to that off the top of my head, but I can get you.


I believe you can get it. Mr. ZUCKERBERG But I one would assume that you would know. Who heads these corporations that are going to be running this global? Company. How many of them are. minorities' Mr. Zuckerberg, Congressman, I do not know off the top of my head. Are there any members of the LGBTQ plus community associated with. This association, Mr. Zuckerberg. Congressman, I dont know the answer. Who can who acknowledge that many people who acknowledge that they are part of the community?


Hot. You do not know. Mr. Zuckerberg, is it true that the overwhelming majority of persons associated with this endeavor are white men? Congressman, I don't know, off the top my head the list of the people who are running the organizations and in the association.


Well, is it true that one would have to have 10 million dollars? To become a part aside from other. Qualities to become a part of the association. Congressman, I believe that was the initial idea, but I don't think that that has been locked down yet. Well, isn't it true that persons have already bought into the association and paid ten million dollars?


Congressman, I do not believe that has happened yet.


Well, I spoke to your person who manages Culebra. And he indicated that he is one of the holders of a post with the association. Is he incorrect? Congressman, you're right that David Marcus, who runs the Koliba subsidiary for Facebook, is is Facebook delegate for to the to this independent association. The question that was answering is, I don't know if the asource if the organizations that are members of the association have yet contributed any financial support for the organization.


Well, I must say that I would assume that you would have the answers, but I would greatly appreciate it if you would share this with me because I plan to share it with the public. The public needs to know whether this is an organization that is truly diverse or whether it is an organization that is owned and operated by a small group of persons, all of whom have. Similar characteristics for want of better terminology. Now, let me share this with you quickly.


This does not apply to you, Mr. Zuckerberg, but you need to know why there was a good deal of consternation. There was a man whose name was Bernie Madoff. Mr. Bernie Madoff was the chair of the Nasdaq. He had all of the trappings of being a successful, responsible person. He's now serving 150 years in prison. His Ponzi scheme involved some sixty four point eight billion dollars. The people who are for free markets. Bought into this Ponzi scheme.


They were laissez faire, but once they lost their money, they made their way to us. And they wanted us to make them whole. This is why we have to be concerned. Not because you're a Bernie Madoff, I want the press to clearly understand I'm not saying this that you are, but because things can happen, things can go wrong. And when they do, we are the people who have to make them right. I yield back the balance of my time in a chair.


Thank you. The gentleman from Kentucky, Mr. Barr, is recognized for five minutes. This was Dr. Berg. Welcome to the Financial Services Committee. Criticism is cheap. Anybody can criticize.


As you can see here today, politicians in Washington are pretty good at lodging criticism, but creating something of value is significantly more difficult. And I would commend you for being an innovator and trying to create something of value. It seems like in Washington, whenever the private sector produces some type of innovation or new advancement, politicians and bureaucrats rush in to criticize or regulate. In an era when some politicians in Washington and even some politicians on this committee are openly embracing socialism and central planning, it seems like the presumption is always that private sector innovation is a bad thing.


I think that presumption should be reversed. We in Congress should view innovation for its potential opportunities in promoting financial inclusion, reducing friction in transactions, aiding small business, and bringing the financial system to unbanked and underbanked communities.


That's not to say we shouldn't ask questions, which is, of course, what we're doing here today.


But in America, a country built on free enterprise and capitalism, it's always better to be on the side of innovation.


And we should always place the burden on the government to justify regulation and intervention. Now, I was very interested in your testimony, Mr. Zuckerberg, when you alluded to the risks of not innovating and the danger of U.S., the U.S. falling behind some other countries or foreign companies who are creating similar platforms.


Will you elaborate on the initiatives in those other countries?


Yes. Congressman, thanks for the opportunity today.


As soon as we put out this white paper on Libra, what we saw was in China especially, they immediately kicked off this public private partnership with some of their biggest companies in order to race to try to build a system like this quickly, a digital renminbi that they could use as part of their belt and road initiative, their kind of foreign and economic policy to grow influence throughout Asia and in Africa and other areas.


And they're planning on launching this in the next few months.


Well, I would say, you know, when I think AML BSA issues is important when we're talking about Leber and Culebra, but I think the American competitiveness angle and the competition with China is a national security issue. And the fact that that Facebook and the FAA and the and the Leber Association is launching into innovation, I think is is positive for our national security.


Mr. Zuckerberg, I do want to commend you on statements you made recently at Georgetown University about free speech in the First Amendment.


I was particularly happy to hear you say that you will, quote, continue to stand for free expression, understanding its messiness, but believing that the long journey towards greater progress requires confronting ideas that challenge us. I'm reminded of what John Stuart Mill wrote in on Liberty, and I would commend it to my colleagues and church and my friend, the chairwoman. Mr. M. wrote that, quote, If all mankind minus one were of one opinion and only one person of the contrary opinion, mankind would be no more justified in silencing that one person than he.


If he had, the power would be justified in silencing mankind. And this sentiment is important and relevant to Facebook, especially in today's age of political correctness. Accusations of offensive speech, safe places, and the dramatic polarization of our political discourse.


I do find it highly troubling that politicians are trying to bully you to be a fact checker and to be the speech police, especially in politics, at the core of the First Amendment.


And so along those lines, I want to ask you a question about censorship and whatever fact checking board you're delegating these responsibilities to. Will you commit that Facebook will not censor any political ad placed on your platform or in support of President Donald Trump? Congressman, my commitment on this is that or the principle at least here, is that we believe that people should build to see for themselves what politicians are saying. That doesn't just go for for Trump, that goes for for any of the candidates, for any of our national offices.


People need to build to see for themselves and be able to make judgments on what the candidates are saying and and their character.


Well, I applaud you for that. And I don't want you to be bullied by politicians to relinquish our treasured free speech under the First Amendment, protect it. And don't be bullied by politicians who want to censor politically incorrect speech. I yield back.


The gentleman from Missouri, Mr. Cleaver, is also the chair for the Subcommittee on National Security, International Development and Monetary Policy is recognized for five minutes.


Thank you, Madam Chair. Thank you, Mr. Zuckerberg, for for being here today. In response to a letter that I sent to F SOC, I was told that it's it's unclear whether U.S. and foreign regulators will have the ability to monitor Libra and require any kind of corrective actions. And then at the same time, if U.S. and international regulators are, as I've said in my letter, the letter to me, unaware if they have the ability to monitor your network and then protect against money laundering and terror financing.


I don't. How are you going to get over the regulatory hurdles? I mean, if they're already saying that. And what happens if regulators just throw up their hands and say that we cannot guarantee the soundness of this product? Thank you, Congressman. So there are two parts of the process here. The first is what we and the rest of the association are trying to do to design this system so that it eliminates those risks. And the second is the process of working with the regulator on on their concerns and questions to make sure it it it meets approval on the former.


The the key part of this is that the system will be fully backed and one to one in the reserve by a a mix of cash and highly liquid assets.


So that sets it in contrast to the way that most banks work with a fractional reserve where there could be a run on the bank. If a lot of people want to withdraw from from from that system here, everything will be back to 1 to 1. So in theory, that shouldn't be possible. Now, in practice, I get that. You know, sometimes there are additional risks beyond what the theory says should be possible. So we need to work with the regulator to work through their their questions and concerns and make sure that we are operating at the highest level of rigor for financial stability.


And that's why my commitment is that we're not going to launch a Leber payment system here or anywhere else around the world until we get the approval from FSOC and the other relevant U.S. financial regulators.


Know, I was pleased to hear you say that. No. There is a mechanism that you've talked about that you wanted to rule out. I guess you already begun to do that, which would be some kind of a review mechanism. Can you share the. A review mechanism that that would. In some ways, I tell you. An independent group would tell you what they believed to be violations of human rights, that they end up in Facebook and so forth.


Thank you, Congressman. I believe you're talking about the issues on content and hate speech, areas like that. Yes.


So this has been an area where, you know, our principles we want to give people is as much a voice in as wide a definition of freedom of expression as possible. But of course, there are going to be some things that infringe on others rights or can cause harm.


And one of the things that we've struggled with is how do you develop a nuanced set of policies that can identify all of the different types of harms? We've talked about a number today, including terrorism and child exploitation and aspects of of hate speech or health, misinformation or different.


There's about 20 different categories that we track all in and we develop policies.


We now have more than 35000 people at the company who work on safety and security overall. We spent billions of dollars a year on this. Our budget on on safety and security is now greater than the whole revenue of our company was at the time that we went public in 2012. So it's a big effort. But nonetheless, I believe that it should not sit on any one company's shoulders to make so many important decisions about speech.


So one of the things that I've tried to focus on doing is building an independent oversight board that will consist of people with diverse backgrounds and views and is global, but who all value freedom of expression. And this group will will be able to make final binding decisions on what content stays up and comes down on Facebook that that even I or our team won't be able to overrule. So it will create a check and balance and oversight of our company's operations and extricate yourself from the.


From the body that you would be created, Congressman, the way we are setting this up is so that we will appoint the first set of co-chairs for the body and we hope to do this in the next few months. And then they will nominate a set of other members and we will jointly agree on them. Once the board is up and running, it will nominate and kind of refill itself. So we will not be involved in the selection process.


Thank you. Thank you. The gentleman from Colorado, Mr. Tipton, is recognized for five minutes.


Thank you, Madam Chair. Mr. Cabourg, a number of my colleagues have. I'm over here to your left. OK. But they've expressed some consideration that needs to be taken in in regards of the prospective payments industry within the liberal association. As you're well aware, a number of businesses that have had extensive superior experience in international payments. MasterCard, Visa have pulled out of that association. Would you view Facebook as an expert in the payments industry? Congressman, we're not traditionally primarily a payments company, but the person who's running the Culebra subsidiary for us, David Marcus, was president of PayPal before, which is one of the great payments companies.


And we certainly have know other financial experts on the management team and board of the company.


You know, you'd also noted in your testimony today that you're going to be looking for U.S. regulatory approval in terms of AML BSA to be able to make sure that Facebook, for its part, within an association will continue to participate if the Leber association can't satisfy those regulations with the U.S. regulations are in place. We'll Culebra pull out of the association. Congressman? The short answer would be yes, if we don't come up with a solution that that gets the US regulatory approval, then presumably we'll continue working on the proposal until we can.


But we're not going to launch anything that doesn't have a U.S. regulatory wall.


A portion of this you would pull out. Sorry, I didn't hear that you would pull out on the wallet portion of this with the Calabro. The case that I was referring to before we might be required to pull out is if the association independently decides to move forward on something that we're not comfortable with. But right now, I think my understanding is that everyone is aligned on on making sure that we have U.S. regulatory approval to launch anywhere in the world.


And that's that's the goal.


That's the plan from what you know currently of how it's being structured. Is there an internal monitor in place? Could you describe that in regards to AML BSA? Congressman, sure, there are multiple levels of the work here. So there's going to be some work at the network level, so the Leber Association level, the architecture of the system itself, that that supersedes all of the individual work that the companies are doing to implement this.


And then, of course, the companies that are members of the association or are transacting using this payment system will be responsible for themselves implementing and following those rules.


So within Facebook. And we have a big effort to make sure that we can verify people's identities and authenticate them. This predates Culebra and we do this today on, you know, if if someone wants to run political ads or run a large page. I do. I do. I appreciate that.


That one of the concerns with Facebook and then perhaps potential participation with Libra, Culebra, that's going to be going in. You'd had major hacks losing personal information for millions of users that are gone through. What assurances are actually going to be in place to make sure that the users with the most sensitive information that you can have in terms of finances are going to be protected and then also, again, including BSA and anti-money laundering. Thanks, Congressman. The payment information that people share is stored separately from other information in our services, and it is all of our information is stored securely and we work hard on security.


This is especially secure and I don't think we've had an issue with this to date. We do know even though we haven't launched Culebra as a product yet, we do take payments for a number of things today, ranging from fund raisers to people buying ads. And we have a secure tier in our in our data center focused on on payment information. And and that has has worked well so far.


We also have no data breaches in that field. My understanding is we haven't had any issues on that in the payment area.


OK. Thank you. And. You know, one of the issues that I am concerned about is, is are we going to be able to use if Leber comes into place? Can we use it to buy anything that is legal? In this country, would you support that? Congressman, I think the intent would certainly be to to have it be it give people as much control of what they want to do as possible.


Of course, there are certain types of goods that are regulated and that require additional process to allow that. And then there's certain content policies that I just think we're not we haven't developed yet. That's that's much further downstream of where we are now of basically just trying to make sure that we can architect a system that works and that gets the appropriate regulatory approvals.


The committee will now take a five minute recess.