Facebook under attack from all sides and within

The pressure is growing on Facebook and on Mark Zuckerberg, its founder and boss.

Scrambling in the glare of intense scrutiny, leaders at Facebook’s headquarters in Menlo Park, California, are said to have found what they hope is a solution: the group is expected to announce a new name next week. Picture: AFP

Britain’s competition watchdog didn’t mince its words. In fining Facebook £50m ($92m) for an unprecedented breach of merger rules, the Competition and Markets Authority said last week that the penalty “should serve as a warning to any company that thinks it is above the law”.

This may have been only one rebuke, but the social media powerhouse has become accustomed to them. Indeed, the following day, Facebook’s own oversight board demanded urgent improvements after documenting a catalogue of transparency failures.

And there could be more to come. After Frances Haugen, a former Facebook product manager-turned-whistleblower, left the company with thousands of internal documents and testified during a Senate hearing that Facebook should declare “moral bankruptcy”, executives expect further revelations.

The pressure is growing on Facebook – which also owns Instagram, the image-sharing app, and the messaging services WhatsApp and Messenger – and on Mark Zuckerberg, its founder and boss. In response, scrambling in the glare of intense scrutiny, leaders at the group’s headquarters in Menlo Park, California, are said to have found what they hope is a solution: Facebook is expected to announce a new name next week.

The rebrand is likely to reposition Facebook’s apps under a new umbrella, designed to reflect its focus on ventures beyond social media, according to The Verge, a website that cited a source with direct knowledge of the matter.

The shake-up could be announced at its annual Connect event on Thursday, if not sooner. The $US960bn ($1.3 trillion) business is due to report its latest earnings on Monday.

Zuckerberg, 37, predicted this summer that his company would shift over the years to come from being regarded as a social network operator to a group more focused on “the metaverse”, a virtual realm where users can interact without being physically in the same space.

Whatever it ends up being known for, and whatever it is known as, the man who built Facebook is facing questions about whether he is the right person to lead it in future. Can it clean up misinformation, clamp down on harmful content and fight campaigns for a break-up with Zuckerberg as its chief executive?

Whistleblower Frances Haugen, inset, told a Senate hearing that Facebook should declare ‘moral bankruptcy’. Picture: AFP

Alex Stamos, Facebook’s former chief security officer, believes that his old boss needs to go. This month he told The Problem with Jon Stewart, a podcast: “One of the problems at Facebook is, as a founder-led company, it is very hard for them to make this real kind of cultural shift that has to happen, where preventing the downside impacts of your product is more important than the growth.”

Over 18 years Zuckerberg has built his company, defeated a string of competitors and repeatedly defied predictions of a drift into irrelevance.

This journey has forged a mindset that is “very hard to shift into, ‘I have won. I now have to be incredibly responsible with what I have here’,” said Stamos, who is now the director of Stanford Internet Observatory. “For him personally, we probably need Facebook to have a chief executive who’s not as emotionally attached to kind of the path that got them there.”

Zuckerberg’s posts on his website do not paint the picture of a person poised to heed such calls and step back from his empire. A few days after being chided by senators for sailing amid growing controversy, he uploaded a video of himself rowing. It was accompanied by Bachman-Turner Overdrive’s 1974 single, Takin’ Care of Business.

And as far as Wall Street is concerned, he is. Analysts expect Facebook to reveal another record quarter of revenue on Monday, with sales set to rise by 38 per cent to $US29.6bn.

Shares in the company came under pressure when Haugen went public with allegations that its platforms harmed children, stoked division and weakened democracies, but they swiftly recovered.

Providing that Facebook continues to rake in advertising dollars, few believe that its stock will suffer a sustained decline. No doubt its supporters will have retained that view after its shares fell by 5.1 per cent to $US324.61 after Snap, the owner of Snapchat, raised fears of an industry-wide advertising slowdown.

Critics have expressed alarm not only about Facebook’s power in the world, but also Zuckerberg’s outsized power over it. He is the last founder of Big Tech’s so-called Faang stocks – Facebook, Amazon, Apple, Netflix and Google – to retain sole day-to-day management. He has preserved control, too, by owning more than half the company’s voting shares, despite reducing his stake to about 13 per cent.

“The buck stops with Mark,” Haugen told Congress. “There is no one holding Mark accountable but himself.”

Facebook’s representatives have pushed back hard against her allegations and those of other critics. When the Competition and Markets Authority announced its penalty this week, a spokesman criticised an “unfair decision” and insisted the company had adopted a “best effort compliance approach” while regulators investigated its takeover of Giphy, the animated image search engine.

In Washington, senators want to hear from the man himself. On Wednesday Zuckerberg received his latest invitation to testify on Capitol Hill.

In a sharply worded letter, Richard Blumenthal, chairman of the Senate commerce subcommittee on consumer protection, demanded to know “how you are going to protect our kids”.

For Zuckerberg, regardless of whether his company is formally or formerly called Facebook, the questions keep coming.

The Times