Mark Zuckerberg will appear before the US Congress over its massive market power and privacy breaches this month. The tech giant is under the microscope from regulators and lawmakers alike.
The representative head of the California Democrat Maxine Waters announced on Wednesday that Mark will testify at a panel hearing on 23rd October. The focus will be on Facebook’s plan for a digital currency and its role in housing. In March, the company in a legal settlement agreed to overhaul its ad-targeting systems in order to prevent discrimination of employment, credit and housing ads.
Top regulators like Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Munchin along with lawmakers of both parties have criticized Facebook’s plan for the new digital currency Libra. They have expressed concerns that the currency can be used for money laundering and drug trafficking activities.
There is also another concern that the massive reserve that will be created to buy Libra could supplant Fed and destabilize the financial system. It is believed that it could also hurt the consumers by Libra losses.
“Mark looks forward to testifying before the House Financial Services Committee and responding to lawmakers’ questions.”
A few months ago in July, members of Democratic committee including Walters sent a letter requesting Facebook to halt its operation for Libra and its digital wallet Calibra. The wallet was to be used in the new cryptosystem. The House Democrats have also threatened legislation that would stop big tech companies from entering the banking sector.
Waters has called Libra “a new Swiss-based financial system” that is too huge potentially to fail and could result in a taxpayer bailout.
On Wednesday, the Finance Minister of France, Bruno Le Maire, said the European Union should not allow the development of Libra on the “European Territory” as it can threaten the monetary sovereignty of its member countries. He also added, “It should not be the role of a private company to try to get a sovereign currency like a sovereign state”.
The digital currencies like Bitcoin and Ethereum are backed by commodities. However, Facebook plans to back Libra with real currencies.
Facebook’s Executive leading the project, David Marcus, in July assured the congressional hearing on over a two days period that Facebook will not launch the crypto project until it has received the necessary approvals from regulators and has secured safeguards to protect the user data privacy.
He said Facebook will not control Libra because Facebook will be only one of about 100 companies and nonprofits in an association that will manage the currency.
Further, Marcus said that this will open low-cost online commerce to millions of people who do not have access to bank accounts and make cross border transactions cheaper. However, he did not agree with several lawmakers to suspend the plan or a pilot project.
Facebook is a California based tech giant with a user base of 2.5 billion globally. It is under the scrutiny of lawmakers and regulators because of a series of data privacy scandals. One of the scandals included the lapse of opening personal data of millions of its users to the 2016 campaign of President Donald Trump.
“The Justice Department, the Federal Trade Commission, and the House Judiciary antitrust subcommittee are all conducting investigations of Facebook and the other big tech companies amid accusations of abuse of their market power to crush competition.”
In Washington last month Zuckerberg had three days of private meetings with Trump and several lawmakers who are critics of the tech industry. He also met with the House Intelligence Committee Chairman to discuss ways to prevent foreign actors from disrupting elections next year. In a separate session, Zuckerberg also assured corporation to the leaders of the House Judiciary Committee with their antitrust investigation.
In spring, Zuckerberg last testified before congress when he was questioned about privacy, election interference, and other issues.