as you say we've had the ability to download your information for years now. and people have the ability to see everything that they have in facebook, to take that out of their account and move their data anywhere they want. >> does that download file include all the information facebook has collected about any given individual in other words --s. >> mark zuckerberg continuing to answer questions in front of house energy and commerce regarding the differences between potential regulation in europe and the u.s. and acknowledging his own data was sold to third parties. meanwhile, watching the markets taking a dip here down 183, reapproaching session lows, and oil above 67 as reuters runs a headline, sourcing al arabiya there were blasts heard in riyadh, that has oil spiking to the highest levels since 2014. we're going to monitor that. for the time being back to zuckerberg >> advertisers will the same right be to object, available to facebook

users in the united states and how will that be implemented >> congressman, i'm not sure how we're going to implement that yet. let me follow up with you on that. >> okay. thank you, mr. chairman. again, as a small facebook conducted a couple years ago effort in our district in houston, for our small businesses and one of the most successful outreach i've seen, so i appreciate that outreach to helping small businesses use facebook to market their products thank you, mr. chairman. >> thank you the chair recognizes the gentle lady from tennessee, miss blackburn, for four minutes. >> thank you, mr. chairman mr. zuckerberg, i tell you, i think your cozy community as dr. mark jameson said is beginning to look like the truman show where people's identities and relationships are made available to people they don't know and then that data is crunched and used and they are fully unaware of this. so i've got to ask you, i think what we're getting to here is,

who owns the virtual you who owns your presence n-line? and i would like for you to comment, who do you think owns an individual's presence on-line? who owns their virtual you is it you or them? >> congresswoman, i believe that everyone owns their own content on-line. that's the first line of our terms of service, if you read it, it says that >> and where does privacy rank as a corporate value for facebook >> congresswoman, giving people control of their information and how they want to set their privacy is foundational to the whole service. it's not just an add-on feature, something we have to comply with >> well -- >> the realty is, if you have a photo, think about this in your day-to-day life. >> i can't let you filibuster right now. a constituent of mine who is a benefits manager brought up a great question in a meeting at her company last week. and she said, you know, health care, you've got hippa, you've got the fair credit reporting

act, these are all compliance documents for privacy, for our sectors of the industry. she was stunned, stunned that there are no privacy documents that apply to you all. we've heard people say that, you know, and you've said you're considering maybe you need more regulation what we think is we need for you to look at new legislation and you're hearing there will be more bills brought out in the next few weeks, but we have had a bill, the browser act, i'm certain that you're familiar with this, is bipartisan and i thank mr. lipinski and mr. lance and flores for their good work on this legislation, we've had it over a year and working on this issue for about four years, and what this would do is have one regulator, one set of rules for the entire ecosystem

will you commit to working with us to pass privacy legislation, to pass the browser act? will you commit to doing that? >> congresswoman, i'm not directly familiar with the details of what you just said. but i certainly think that regulation in this area -- >> let's get familiar with the details, as you have heard, we need some rules and regulations. this is only 13 pages. the browser act is 13 pages. so you can easily become familiar with it and we would appreciate your help and i've got to tell you, as mr. green just said, as you look at the eu privacy policies you're already doing much of that if you're doing everything you claim. because you will have to allow consumers to control their data, to change, to erase it you have to give consumers opt-in so that mothers know, my constituents in tennessee want to know that they have a right

to privacy and we would hope that that's important to you all. i want to move on and ask you something else, and please get back to me once you've reviewed the browser act, i would appreciate hearing from you. we've done one hearing on al gor ritholtz ims, i chair communications and technology subcommittee here, we're getting ready to do a second one on algorithms we're going to do one next week on prioritization. i would like to ask you, do you subjectively manipulate your algorithms to prioritize or censor speech? >> congresswoman, we don't think about what we're doing is censors speech i think there are types of content like terrorism we all agree we do not want to have on our service. so we build systems that can identify those and can remove that content and we're very proud of that work. >> let me tell you something right now, i -- [ inaudible ] is

not terrorism. >> gentle lady time has expired. >> thank you very much, mr. chairman mr. zuckerberg, we appreciate your contrition and we appreciate your commitment to resolving these past problems. from my perspective, though, and my colleagues on both sides of the aisle and this committee, we're interested in looking forward to preventing this kind of activity, not just with facebook, but with others in your industry. and has been -- as has been noted by many people already, we've been relying on self-regulation in your industry for the most part. we're trying to explore what we can do to prevent further breaches i want to ask you a series of fairly quick questions that should only require yes or no answers. mr. zuckerberg, at the end of 2017, facebook had a total shareholder equity of just over $74 billion. is that correct? >> sorry, congresswoman, i'm not

familiar. >> at the end of 2017, facebook had a total shareholder equity of over $74 billion. correct? >> over that >> that's correct. you're the ceo do you know -- >> the company was greater than that >> greater than 74. >> last year facebook earned a profit of $15.9 billion on $40.7 billion in revenue, correct? yes or no. >> yes >> now, since the revelations surrounding cambridge analytica, facebook has not noticed a significant increase in users deactivating their accounts, is that correct >> yes. >> now, since the revelations surrounding cambridge analytica, facebook has also not noticed a decrease in user interaction on facebook, correct? >> yes, that's correct >> okay. now, i want to take a minute to talk about some of the civil and regulatory penalties that we've been seeing.

i'm aware of two class-action lawsuits that facebook has settled relating to privacy concerns, lane versus facebook, was settled in 2010, that case resulted in no money being awarded to facebook users. is that correct? >> congresswoman, i'm not familiar with the details of that >> you're the ceo of the company. correct? >> yes. >> now, this major lawsuit was settled, do you know what -- do you know about the lawsuit >> congresswoman, i get briefed on these -- >> do you know ain't this lawsuit? lane versus facebook yes or no. >> i'm not familiar with the details. >> if you can supplement there was a lawsuit and the users got nothing. in noers another case, frailly versus facebook it resulted in a 2013 settlement fund of $20 million established with $15 individual payment payouts to facebook users beginning in 2016 is that correct?

>> congresswoman, i'm not familiar. >> you don't know about that either okay i'll tell you it happened. >> i don't remember the exact details. >> now as a result of a 2011 ftc investigation, into facebook's privacy policy, do you know about that one >> the ftc investigation >> uh-huh. >> yes. >> okay. you entered into a consent decree with the ftc which carried no financial penalty for facebook, is that correct? >> congresswoman, i don't remember if we had a financial penalty. >> you're the ceo of the company. you entered into a consent decree and you don't remember if you had a financial -- >> i remember the consent decree it's extremely important to how we operate the company. >> i would think a financial penalty would be too okay the reason you probably don't remember it is because the ftc doesn't have the authority to issue financial penalties for first-time violations. the reason i'm asking these questions, sir, is because we

continue to have these abuses and these data breaches, but at the same time, it doesn't seem like future activities are prevented. so i think one of the things that we need to look at in the future, as we work with you and others in the industry, is putting really robust penalties in place in case of improper actions and that's why i ask these questions. >> the gentle lady's time expired. the gentleman from louisiana the whip of the house mr. scalise, for four minutes. >> mr. zuckerberg, i appreciate you coming here. i know some of my other colleagues mentioned, you came here voluntarily and we appreciate the opportunity to have this discussion because clearly what your company has been able to do is revolutionize the way that people can connect and there's a tremendous benefit to our country, now it's a worldwide platform, and it's helped create a shortage of computer programmers, as a former compute programmer we

would agree we need to edge courage more people to go into the computer sciences, because our company is a world leader, but, obviously, raises questions about privacy and data and how the data is shared and what is a user's expectation of where that data goes. so i want to ask a few questions, first would you agree we need more computer programmers and people to go into that field? >> congressman, yes. >> as a public service announcement we made appreciate you joining me in that mr. shimkus' question, a follow-up to a question yesterday that you weren't able to answer, but it was dealing with how facebook tracks users, especially after they log off. and you had said in relation to the congressman's question that there is data mining, but it goes on for security purposes. so my question would be, is that data that is mined for security purposes also used to sell as part of the business model >> congressman, believe those

are -- that we collect different data but i can follow up on the details. >> if you could follow up, i would appreciate that. getting into this new realm of content review, some of the people that work for facebook, campbell brown said, for example, this is changing our relationship with publishers and emphasizing something that facebook has nef done before it's having a point of view. you mentioned the diamond silk example where you described it as a mistake were the people who made that mistake held accountable in any way? >> congressman, let me follow up with you on that that situation developed while i was here preparing to testify, so i'm not aware of the details. >> i do want to ask you about a study that was done dealing with the algorithm that facebook uses to describe what is fed to people through the news feed, and what they found was, after this new algorithm was implemented there was a

tremendous bias against conservative news and content and a favorable bias towards liberal content. and if you can look at that, that shows a 16-point disparity. which is concerning. i would imagine you're not going to want to share the algorithm itself with us, i would encourage you if you wanted to do that, but who develops the algorithm? i wrote algorithms before. you can determine whether or not you want to write an algorithm to sort data and compartmentalize data but you can put a bias in if that's the directive. was there a directive to put a bias in and first are you aware of this bias that many people have looked at and analyzed and seen >> congressman, this is a really important question there is absolutely no directive in any of the changes that we make to have a bias in anything that we do to the contrary, our goal is to be a platform for all ideas. >> we're almost out of time. if you can go back and look and determine if there was a bias,

whoever developed that software just 20,000 people that work on some of this data analysis, if you can look and see if there is a bias and let us know if there is and what you're doing about it that is disturbing when you see that kind of disparity finally, there has been a lot of talk about cambridge and what they've done in the last campaign in 2008 and 2012 there was also a lot of this done one of the lead digital heads of the obama campaign said recently, facebook was surprised we were able to suck out the whole social graph, but they didn't stop us once they realized that what is we were doing. they came to the office in the days following the election, recruiting and were very candid that they allowed us to do things they wouldn't have allowed someone else to do because they were on our side. that's a direct quote from one of the heads of the obama digital team what would she mean by, they were on our side

>> congressman, we didn't allow the obama campaign to do anything that any developer on the platform wouldn't have otherwise been able to do. >> so she was making an inaccurate statement in your point of view? >> yes. >> the comments and look forward to those answers >> the chair recognizes the gentleman from pennsylvania m doyle, for four minutes. >> thank you mr. zuckerberg, welcome. facebook uses some of the most advanced data processing techniques and technologies on the planet, correct? >> congressman, we pride ourselves on doing good technical work, yes. >> you use these technologies to flag span, identify offensive content, and track user activity, right? >> among other things. >> 2015, when "the guardian" first reported on cambridge analytica using facebook user data was that the first time facebook learned about these allegations? >> congressman, in 2015, when we heard that the developer on our

platform aleksandr kogan -- >> is that the first time you heard about it >> that -- >> reported by "the guardian"? >> to cambridge analytica. >> when "the guardian" made the report is that the first time you heard about it >> yes. >> thank you do you routinely learn about these violations through the press? >> congressman, sometimes we do. i generally think that -- >> let me ask you, you had the capability to audit developers' use of facebook data and do more to prevent these abuses but the problem at facebook not only persisted, it proliferated relative to other types of problems you had on your platform, it seems as though you turned a blind eye to this, correct? >> congressman, i disagree with that assessment. i do think that going forward, we need to take a more proactive view of policing what the developers do, but looking back, we've had an app review process, we investigate -- >> mr. zuckerberg, it seems thus that -- it seems like you were more concerned with the

attracting and retaining developers on your platform than you were with ensure the security of facebook user data let me switch gears. your company is subject to a 20-year consent decree with the ftc since 2011, correct? >> congressman, we have a consent decree, yes. >> and that decree emerged out of a number of practices that facebook engaged in that the ftc deemed to be unfair and deceptive. one such practice was making facebook users' private information public without notice or consent, claiming that facebook kerts side the security and integrity of apps when it did not, and enabling developers to access excessive information about a user and their friends, is that correct? >> congressman, i'm not familiar with all of the things that the ftc said. >> these were part of the consent decree so i think -- i'm just concerned that despite this consent decree, facebook allowed developers access to an unknown

number of user profiles on facebook for years, potentially hundreds of million or more, and not only allowed, but partnered with individuals and app developers such as aleksandr kogan, who turned around and sold that data on the open market to companies like cambridge analytica. mr. zuckerberg, you've said that you plan to audit tens of thousands of developers that may have improperly harvested facebook user data you also said that you plan to give all facebook users access to some user controls that will be made available in the eu under the gdpr but it strike mes me there's a trust gap. this is one example. why should we trust you to follow through on these promises when you have demonstrated that you're willing to flaunt your internal policies and government oversight when the need suits you? >> respectfully i disagree with that characterization.

we've had a review process for apps for years we've reviewed tens of thousands of apps a year and taken action against a number of them our process was not enough to catch a developer -- >> i see my time is almost over. i want to say m chairman, that to my mind the only way we will close the trust gap is through legislation that creates and empowers a sufficiently oversight agency with rule-making authority to protect the digital privacy and ensure that companies protect our users' data. >> the chair recognizes the chairman of the subcommittee on digital commerce, for four minutes. >> thank you, mr. chairman mr. zuckerberg, thank you very much for being with us today first question i have is can you tell the facebook users that the russians and the chinese have not used the same methods as other third parties to scrape the entire social network for their gain >> congressman, we have not seen

that activity. >> none at all >> not that i am aware of. >> let me ask this question. you know, it's been going on when you made your opening statement in regards to what you would like to see done with the company and steps moving forward. a couple questions, you know, about you're going to be investigating the apps how many apps are there out there that you would have to investigate? >> there are tens of thousands of apps that had access to a large amount of people's information before we locked down the platform in 2014. we're going to do an investigation that first involves looking at their patterns of api access and what those companies were doing and then if we find anything suspicious we will bring in third-party auditors to go through their technical and physical systems to understand what they did and if they -- we find they misused any data, then we'll ban them from our

platform, make sure they delete the data and tell everyone effected. >> how long would it take to then investigate each of those apps once you're doing that? because again, when talking about tens of thousands and going through that entire process, how long would it take to go through each one of those apps >> yes, congressman. it's going to take many months to do the full process >> okay. >> it's going to be an expensive process with a lot of auditors, but we think this is the right thing to do at this point. before we thought that when developers told us that they weren't going to sell data, that that was a good representation and one of the big lessons we've learned here is we cannot just take developers' word for it we need to enforce that. >> okay. we're talking about audits, on the audits in 2011 facebook did sign the consent order with the federal trade commission for the privacy violations part of that consent order

requires facebook to submit third-party privacy audits to the ftc every two years. are you aware of the audits and why didn't the audits disclose or find these issues with the developers >> yes, i'm aware of the audits we do. every other year they're ongoing. they have not found material issues with our privacy programs in place at the company. i think the broader question here is, we've had this ftc consent decree, but we take a broader view of what our responsibility for people's privacy is, and our view is that this -- what a developer did that they represented to us they were going to use the data in a certain way and then in their own systems went out and sold it, we do not believe is a violation of the consent decree, but it's clearly a breach of people's trust and the standard that we hold ourselves to is not just following the laws that are in

place, but we also -- we want to take a broader view of this. >> let me -- our time here -- are you aware that facebook did provide the auditors with all the information they requested when doing the ftc audits? >> sorry, can you repeat that? >> did facebook provide the auditors with all the information requesting when they were preparing the audit for the ftc? >> congressman, i believe we do provide the audits to the ftc. >> all the information is provided and were you ever personally asked to provide information or feedback in these audits to the ftc? >> congressman, not personally, although i am briefed on all of the audits by our team. >> my time has expired and i yield back. >> the chair recognizes the gentle lady from illinois for four minutes >> thank you, mr. chairman you know, you have a long history of growth and success, but you also have a long list of apologies.

in 2003 it started i apologize for any harm done as a result of my neglect, 2006, we really messed this one up, 2007, we simply did a bad job, i apologize for it 2010, sometimes we move too fast 2011, i'm the first to admit that we've made a bunch of mistakes 2017, this is in connection with the russian manipulation of the election and the data that came from facebook, initially i am -- i ask for forgiveness. i will work to do better so it seems to me from this history that self-regulation, this is proof to me, that self-regulation simply does not work it does not work the secure and protect americans' data act that i hope

you will take a look at very simple bill about setting standards for how you have to make sure that the data is protected, deadlines on when you have to release that information to the public, certainly it ought to go to the ftc as well but in response to the questions about the apps and the investigation that you're going to do, you said you don't necessarily know how long. have you set any deadline for that because we know, as my colleagues said, that there are tens of thousands, there's been 9 million apps, how long do we have to wait for that kind of investigation? >> congresswoman, we expect it to take many months. >> years >> i hope not. >> okay. i want to ask you, yesterday following up on your response to senator baldwin's question, you

said yesterday that kogan also sold data to other firms you named unoya technologies how many are there total and what are their names can we get that? and how many are there total >> congresswoman, we can follow up with you to make sure you get all that information. >> yeah, but order of magnitude? >> i don't believe it was a large number but as we complete the audits we will know more >> what's a large number >> a handful >> has facebook tried to get those firms to delete user data and it deese -- its derivatives? >> when we first learned about it we demanded that the app developer and the firms that he sold it too delete the data and they all represented to us they had. it wasn't until about a month ago that new reports surfaced that suggested that they hadn't,

which what is has kicked off us needing to now go do this full audit and investigation and investigate all these other apps that have come up. >> derivatives deleted >> congresswoman, we need to complete the investigation and audit before i can confirm that. >> you are looking at derivatives. >> they represent they have, but we need to get into their systems and confirm that before i want to stand up here confidently and say what they've done. >> so mr. green asked about the general data protection regulation on may 25th that's going to go into effect by the eu, and your response was, let me ask, is your response that exactly the protections that are guaranteed not the -- what did he say -- yeah, not the -- just the controls, but all the rights that are guaranteed under the general data protection regulations will be applied to americans as well?

>> congresswoman, the gdpr has a bunch of different, important pieces one is around offering controls over specific -- over use. >> that's one. >> that we're doing. the second is around pushing for affirmative content and putting a control in front of people that walks people through their choices. >> exactly. >> we will do that too the second, although that might be different depending on the laws in specific currents and places but a tool at the top of everyone's app that walks them through the settings and helps them understand -- >> it sounds like it will not be exact and let me say as we look at -- >> the gentle lady's time -- >> who's going to protect us from facebook is also a question thank you. >> the time has expired. the chair recognizes the gentle lady from washington state, the conference chairman. >> thank you thank you, mr. zuckerberg, joining us today is timely, a number of

extremely important questions. americans have about facebook. including questions about safety and security of their data, about the process by which their data is made available to third parties, about what facebook is doing to protect consumer privacy as we move forward one of the issues that is concerning me and i would like to dig a little deeper into how facebook treat cups tent on its platform mr. zuckerberg, given the extensive reach of facebook and its widespread use as a tool of public expression do you think facebook has the unique responsibility to ensure it has clear standards regarding the censorship of content on its platform and do you think facebook adequately and clearly defines what the standards are for its users? >> yes i feel like we have a very important responsibility to outline what the content policies are and the community standards are. this is one of the areas that, frankly, i'm worried we're not doing a good enough job at right now especially because as an

american-based company where about 90% of the people in our community are outside of the u.s. where there are different social norms and cultures it's not clear to me that our current situation of how we define community standards is going to be effective for articulating that around the world. we're looking at ways to evolve that and this is one of the most important things we will do. >> and even focusing on content for here in america, i would like to shift gears a little bit. talk about facebook's recent changes to its news feed algorithm. your head of news partnerships recently said that facebook is, quote, taking a step to define what quality news looks like and give that a boost so that overall there is less competition from news. can you tell me what she means by "less competition from news" and how does facebook objectively determine what is acceptable news and what safeguards exist to ensure that say religious or conservative content is treated fairly? >> yes, congresswoman.

i'm not sure specifically what that person was referring to, but i can walk you through what the algorithm change was if that's useful. >> well, maybe i will go on to my other questions then. there is an issue of content discrimination and it's not a problem unique to facebook there's a number of high-profile examples of edge providers engaging in blocking and censoring religious and conservative political content in november ftc chairman said edge providers routinely block or discriminate against content they don't like. this is obviously a serious allegation how would you respond to such an allegation and what is facebook doing to ensure that its users are being treated fairly and objectively by content reviewers? >> congresswoman, the principle that we're a platform for all ideas is something i care deeply about. i am worried about bias and we take a number of steps to make sure that none of the changeses that we make are targeted at in any kind of biased way, and i

would be happy to follow up and go into more detail on that. i agree this is a serious issue. >> over easter, a catholic university's ad with a picture of a historic cross was rejected by facebook. facebook addressed the error within days that it happened at all it deeply disturbing could you tell me what was so shocking, sensational or excessively violent about the ad to cause it to be initially censored given that your company has said it did not violate terms of service, how can users know that their content is being viewed and judged accordingly to objective standards? >> it sounds like we made a mistake there. i apologize for that and unfortunately, with the amount of content in our systems and the current systems we have in place to review, we make a relatively small percent of mistakes in content review but that can be -- that's too many and this is an area where we need to improve. what i will say is that, i

wouldn't extrapolate from a few examples to assuming that the overall system is biased i get how people can look at that and draw that conclusion, but i don't think that that reflects the way that we're trying to build the system or what we have seen. >> thank you i just -- this is important issue in building trust. that is going to be important as we move forward. >> thank you. >> the chair recognizes the gentleman from north carolina, mr. butterfield, for four minutes. >> thank you, mr. chairman thank you mr. zuckerberg for your testimony here today. mr. zuckerberg, you have stated that your goal with facebook is to build strong communities and certainly that sounds good you've stated here today on the record that you did not live up to the privacy expectations and i appreciate that. but this committee and you must know this, this committee is counting on you to right a wrong and i hope you get it. in my opinion, facebook is here to stay and so you have an

obligation to protect the data that you collect and the data that you use and congress has the power to regulate your industry and we have the power to penalize misconduct but i want to go in a different direction today. you and your team certainly know how i feel about racial diversity in corporate america and sheryl sandberg and i talk about that all of the time let me ask you this and the congressional black caucus has been very focused on holding your industry accountable. not just facebook, your industry accountable for increasing african-american inclusion at all levels of the industry and i know you have a number of diversity initiatives. in 2017 you increased your black representation from 2 to 3% while this is a small increase, it's better than none. this does not nearly meet the definition of building a racially diverse community ceo leadership and i found this to be absolutely true, ceo leadership on issues of

diversity is the only way that the technology industry will change, so will you commit, sir, to convene personally convene, a meeting of ceos in your sectors, many of them, all of them perhaps are your friends, and to do this very quickly to develop a strategy to increase racial diversity in the technology industry >> congressman, i think that's a good idea and we should follow up on it from the conversations i have with my fellow leaders in the tech industry, i know that this is something that we all understand that the whole industry is behind on and facebook is certainly a big part of that issue and we care about this not just from the justice angle, but because we know that having diverse viewpoints is what will help leadership in your company but none of them is african-american i was just looking at it not only you and sheryl, but david, mike, chris, that is your leadership team. this does not reflect america. can you improve the numbers on your leadership team to be more diverse?

>> congressman, this is an issue that we're focused on. we have a broader leadership than five people >> not on your website. >> i understand that >> we can do better than that, mr. zuckerberg we can do you plan to add an african-american to your leadership team in the foreseeable future and will you commit that you will continue to work with us, the congressional black caucus, to increase diversity within your company that you're so proud of? >> congressman, we will certainly work with you. this is an important issue >> we also find that companies' failure to retain black employees contributes to their low presence at technology companies and there's little transparency and retention numbers. so will you commit to providing numbers on your retention, that's the big word, retention of your employees, aggregated by race in your diversity update starting this year can we get that data that's the starting point.

>> congressman, we try to include a lot of important information in the diversity updates. i will discuss that with my team after i get back from this hearing. >> i will take this up with your team in another setting. thank you. >> thank you. >> the gentleman's time has expired. the chair recognizes the chairman of the subcommittee, gentleman from policepmississip. harper. >> thank you, mr. zuckerberg, for being here and we don't lose sight of the fact that you're a great american success story, it is a part of everyone's life and business, sometimes maybe too often, but i thank you for taking the time to be here our concern is to make sure that it's fair. we worry because we're looking at possible government regulation here. certainly the self-governing which has had some issues and how you factor that, and we -- we're trying to keep up with the algorithm changes on how you

determine the prioritization of the news feeds and it needs to be trustworthy and reliable and relevant who is going to determine that that has an impact even though you say you don't want the bias, it does -- it is dependent upon who is setting what the standards are in that i want to ask you a couple of questions if i may, and this is a quote from paul grohl, facebook's vp and general counsel, said, like all app developers, mr. aleksandr kogan requested and gained access to information from people after they chose to download his app now, under facebook policy in 2013, if cambridge analytica had developed the -- this is your digital life app, they would have had access to the same data they purchased from mr. kogan, would that be correct? >> congressman, that's correct a different developer could have built that app.

>> according to politifact.com, the obama campaign and cambridge analytica both gained access to huge amounts of information about facebook users and their friends and in neither case did the friends of app users consent, closed quote. this data that cambridge analytica acquired was used to target voters with political messages, much as the same type of data was used by the obama campaign to target voters in 2012 would that be correct? >> congressman, the big difference between these cases is that -- in the kogan case, people signed into that app expecting to share the data with kogan. and then he turned around and in violation of our policies and in violation of people's expectations, sold it to a third-party firm to cambridge analytica in this case >> sure. >> i think that we were very clear about how the platform worked at the time, that anyone

could sign in to an app and they would be able to bring their information, if they wanted, and some information from their friends. people had control over that if you wanted you could turn off the ability to sign in to apps or turn off the ability for your friends to bring your information. the platform worked the way that we designed it at the time we know we should have a more restrictive platform where people cannot also bring information from their friends and can only bring their own information. that's the way that the system worked. >> whether in violation of the agreement or not, you agree that users have an expectation that their information would be protected and remain private and not be sold, and so that's something, a reason we're here today. i can certainly understand the general public's outrage if they're concerned regarding the way cambridge analytica required their information, but if people are outraged because they use that for political reasons, would that be hypocritical

shouldn't they be equally outraged that obama campaign used the data of facebook users without their content in 2012? >> congressman, what i think people are rightfully very upset about, an app developer that people shared data with sold it to someone else and frankly we didn't do enough to prevent that or understand it soon enough. >> thank you. >> and now we have to go through and put in place systems that prevent that from happening again and making sure that we have sufficient controls in place in our ecosystem so that way developers can't abuse people's data. >> thank you my time has expired. i yield back. >> the gentleman yields back the gentle lady from california is recognized for four minutes. >> thank you, mr. chairman welcome, mr. zuckerberg. thank you very much here i was thinking about facebook and how you develop your platform from a social platform amongst friends and colleagues and joining a community and a lot was based upon trust

you knew your friends, right but that evolved into this business platform and one of the pilars still was trust and i think you would all -- i think everyone would agree trust is in short supply here and that's why we're here today. now you've constantly maintained that consumers own the data they provided to facebook and should have control over it and i appreciate that. i just want to understand more about what that means. to me, if you own something, you ought to have say about how and when it's used but to be clear i don't just mean pictures, elon musk addresses, facebook groups or pages i understand the data and information consumers provided to facebook can be and perhaps is used by algorithms to form assumptions and inferences about users to better target ads to the individuals. now, do you believe that consumers own their data even when the data has been supplemented by a data broker,

assumptions algorithms have made about that user or otherwise, and this is kind of the question that miss blackburn has come up with our own employee comprehensive profile which is kind of our virtual self >> congresswoman, i believe that people own all of their own content. where this gets complicated is, let's say i take a photo and i share it with you. now, is that my photo or is it your photo i would take the position that it's our photo which is why we make it so you can bring -- it's that i can bring that photo to another app if i want, but you can't. >> well, once it gets to the data broker, though, so there's certain algorithms and assumptions made, what happens after? >> can you clarify >> if you supplement this data, you say you're owning it but supplement this when other data brokers, you know, use their own

algorithms to supplement and make their own assumptions, then what happens there because that is to me somebody else is taking that over how can you say that we own that data >> congresswoman, all the data that you put in, all the content that you share on facebook, is yours. you control how it's used, you can remove it at any time, you can get rid of your account and all of it at once. >> but you can't claw it back once it gets out there right? i mean, that's really -- we might only our own data, but once it's used in advertising, we lose control over it, is that not right? >> congresswoman, i disagree with that. because one core tenant of our advertising system is that we don't sell data to advertisers advertisers don't get access to your data. there's a core misunderstanding about how that system works which is that let's say if you're a shop and you're selling

muffins, right, you might want to target people in a specific town who might be interested in baking or some demographic, but we don't send that information to you we just show the message to the right people and that's a really important i think common misunderstanding about how the system works. >> but facebook sells ads based at least on part of data users provide to facebook, that's right. and the more data that facebook collects, allows you to better target ads to users for classes of users, so even if facebook doesn't earn money from selling data doesn't facebook earn money from advertising based on that data >> yes, congresswoman. we run ads that's the business model is running ads. and we use the data that people put into the system in order to make the ads more relevant, which makes them more valuable but it's -- what we hear from people, is that if they're going to see ads they want them to be

good and relevant. >> we're not controlling that data. >> no. you complete control over that >> the time has expired. as previously agreed we will now take a five-minute recess. and committee members and our witness need to plan to be back in about five minutes. we stand in recess >> as they take a break, of course, we'll take stock of what's been said so far. mark zuckerberg in front of house energy and commerce as the questioning takes a couple of detours regarding diversity in leadership, but largely today's been about potential biases within algorithms, the way they're written, the accounts that they discipline rightly or wrongly on both sides. you can see the split along party lines when it comes to that kind of questioning >> i would argue more so today in the house than yesterday in the senate there's been no clear thread in the questioning. mark zuckerberg has said again and again, there's a lot of misunderstanding over what our

business model is or the way we operate is we don't sell data none of what congress is even hinting around in terms of regulation that might come down the pike, there's been mentions of european regulations, gdpr, is getting to the core of what facebook does. so if mark zuckerberg's goal here is to protect facebook, from a business perspective, he certainly seems from my perspective to be doing that is he restoring trust? we'll see how it continues to play out. >> i think the other thing going back to the idea of questioning the business model and whether lawmakers actually understand how this works, you know, he keeps saying over and over again, we don't sell that data we just use that data. we use that data and offer the targeted data that we collect ourselves to create more targeted ads to advertisers, but i think a piece that's missing is what happened before 2014, before 2015, where app developers could collect that data through their own apps on the site themselves. that seems to be the piece

missing in this back and forth. >> it is, indeed there are troves of data out there, we don't know how much, though, semiconductor did say tens of thousands of app developers had access to large amounts of data, going through audits over the next several months zuckerberg said he hopes not years. they will find out if they did anything wrong with that data. >> he was asked whether it would take years and he said i hope not. julia is inside the hearing room on capitol hill. julia, your reflection so far? >> you know, i just walked out of the room and it is jam packed in there i do think the energy is a little different than it was yesterday. the congressmen and women seem to be pushing for faster answers. there were a couple times when people cut off zuckerberg and said we're not going to let you filibuster this. i want yes or no answers will you or will you not be making changes i feel it's a little more hostile and i think that zuckerberg holding his own, is more put on the spot in terms of really being pushing -- has been pushed for yes or no answers

there was one interesting exchange with congresswoman pallone, asking will you commit to changing all your user default settings, can you commit to changing everything and making it easier and he said he couldn't commit because he said they were trying to, you know, give people controls, but there was really a push to get him to in the room in that moment commit to making changes that would have the default settings to give consumers more sort of automatic protection i think it's interesting, listening to these back and forths and similar to yesterday, a lot of sort of clarifying about what they do and do not do with consumer data >> then there's the ongoing discussion about the difference between actually selling data for profit or revenue, and leveraging that data in order to sell an advertisement. zuckerberg spoke to that take a listen. >> you're right that we don't sell any data. and i would say that we do try to explain what we do as time goes on. it's a broad system.

every day, about 100 billion times a day, people come to one of our products, whether it's facebook or messenger or instagram or whatsapp to put in a piece of content i can't be clearer on this topic. we don't sell data that's not how advise tizing works. >> and julia, even the journal today points out the percentage of revenue that facebook makes from selling ads, 98%. virtually the entire business is based on selling ads >> yes, this is entirely an ad-driven model. one other thing i thought was interesting, congressman eschew asked if zuckerberg's data was included in the data sold to the malicious third parties, and he said yes, it was then they asked, are you willing to change your business model to protect privacy? will you change the business model, asked repeatedly.

he said we're making changes when they asked him, they will change the business model, indicating maybe there would be a subscription model rather than advertising, he said, congressman, i'm not sure what that means so interesting here, as there was sort of this return to this conversation we heard a little bit about yesterday, whether there would be some sort of paid service rather than relying entirely on advertising as facebook does now. but zuckerberg was careful not to make any promises that he couldn't follow up on. >> and there's a lot more at stake here than perhaps some of the congresspeople realize if they're trying to put targeted advertising on trial or even data troves about people that allow you to target products at them, then this is what amazon does amazon watches where you surf and what you bought and suggests other things for you to buy. if there's something wrong with that, there's something wrong with amazon's business model and google's and the business model of pretty much everybody else in silicon valley trying to grow on these platforms.

>> and absolutely. it's not just amazon and google and facebook doing targeted advertising. these days, pretty much everyone is doing it. and even television networks are increasingly trying to gather data to make their ads more effective and more like digital advertising, and we're seeing it even on premium sites. anywhere you go, any article you read, even on cnbc dom, they want to make the ad as targeted to you and what you're reading and doing elsewhere on the internet, so i think it's really key to know that facebook is not the only one that doestargeted advertising, but there really is this debate, is targeted advertising, selling your data he says absolutely not and has reiterated that consumers are the ones in charge of their data there was that exchange where our congresswoman asked who owns your virtual you is it you or facebook? and there was sort of a sigh in the room with the lingo, the

virtual you. so, you know, interesting. >> that meta with who owns the virtual you. zuckerberg also talked about the degree to which regulation either here or in europe is inevitable take a listen to that. >> i think that it is inevitable that there will need to be some regulation my position is not that there should be no regulation, but i also think you have to be careful about what regulation you put in place for a lot of the reasons that you're saying i think a lot of times regulation by definition puts in place rules that a company that is larger, that has resources like ours, can easily comply with, but that might be more difficult for a smaller start-up to comply with so i think these are all things that need to be thought through very carefully >> that is mark zuckerberg he was testifying in front of the house. and we're watching shares of facebook as zuckerberg continues his second day of testimony. joining us now on the cnbc news

line is citi's senior internet analyst, mark may. mark, good morning >> good morning. thanks for having me >> great to have you so from an investor perspective, has anything that has happened thus far in this congressional hearing piqued your interest certainly, the stock is up it was trading at around, i think around $160 a share when mark zuckerberg began to testify. it is up nearly 10%. no, not 10 percent, but up nearly $6 from there why do you think it's up, and what has been the most significant thing from an investor perspective that's happened during zuckerberg's testimony? >> i think investors are likely reacting to a view that many of the comments from several members of congress, both yesterday and today, you know, suggest that the threat from overregulation, from congress

kind of going over and above, seems to be less than feared paraen thetically, it seems like several members' views could be t interpreted as we don't want to overregulate to the point where we're stifling innovation. that has been welcomed by investors. i think that's what a lot of investors were hoping to hear, obviously. because i think that the history, at least in the u.s., around tech and internet, when it comes to data protections and privacies has tended to be a self-regulatory approach you can argue that maybe that has gotten us to where we are today and isn't the right approach, but that's been the leanings, the tendency, and it feels as though that's the direction this is going. i think clearly the fact that zuckerberg and facebook have

been very proactive in terms of offering up very quickly real solutions to address these problems, some of which they actually started implementing, as we know, back in 2014-2015. i think that's kind of what's going on here. and ultimately, the self-regulatory approaches that zuckerberg is talking about today is around transparency and control. and i think that's what their users want that's what investors want and frankly, i think that's even what facebook wants, because i agree with zuckerberg. it makes the product better. and so i think that's kind of what's going on. and clearly, he's been very poised in the last two days that's helped. >> yeah, mark, stay with us, please we're going to bring in john harwood who has a look at some of the other headlines since there's a lot coming out of d.c. right now. john >> well, we have the retirement announcement by house speaker

paul ryan, which underscores the opportunity the democrats have this year to retake control of the chamber. paul ryan had long been expected to leave the house at some point before next year but he's announcing it now this is going to diminish his ability to raise money will encourage other republicans to, who are on the fence about whether or not they're going to seek re-election, to retire. in fact, another one did this morning. dennis ross of florida democrats need to gain 23 seats, and i talked to this morning to dave wassermann, one of the leading analysts of house races at the cook political report he said democrats now have a75 chance of regaining the house. that has huge policy consequences for the trump administration if that happens it would also increase the chances that president trump would get impeached in 2019. >> john, thanks for that

on that very note, i want to go back to mark may of citi i know this is an eternity -- we lost mark may. jon, i guess the question for you, since we no longer have mark, is to what degree can you sort of rely on the forecasts? obviously, the midterms are still an eternity away in the life of politics and how might that alter the discussion we're having today about tech regulation? >> well, obviously, with a democratic-controlled congress, it would increase the chances of regulation because of where democrats are idealogically. >> john, our thanks to you and to mark. let's get back to the hearing. >> the face of facebook. and you have come here voluntarily. and our questions are based upon our concern about what has occurred and how to move forward. i'm sure you have concluded based upon what we have asked that we are deeply offended by censoring of content

inappropriately by facebook. examples have been raised, a roman catholic university, a state senate candidate in michigan i would be offended if this censoring were occurring on the left as well as the right. and i want you to know that. and do you take from what we have indicated so far that in a bipartisan fashion congress is offended by inappropriate sensoring of content >> congressman, yes. this is extremely important, and i think that the point you raise is particularly important, that we've heard today a number of examples of where we may have made content review mistakes on conservative content, but i can assure you there are a lot of folks who think we make content moderation or content review mistakes of liberal content as well >> fair enough my point is that we don't favor

censoring in any way, so long as it doesn't involve hate speech or violence or terrorism and of course, the examples today indicate quite the contrary, number one number two, congresswoman blackburn has mentioned her legislation. i'm a cosponsor of the browser legislati legislation. it's for the