Sheryl Sandberg, chief operating officer of Facebook Inc., right, and Jack Dorsey, co-founder and chief executive officer of Twitter Inc., left, arrive to the Dirksen Senate Office. (Photographer: Andrew Harrer/Bloomberg)

Sandberg and Dorsey Pressed on Regulation as Twitter Shares Fall

(Bloomberg) -- Senators raised the prospect of regulating social media platforms as they confronted Twitter Inc.’s Jack Dorsey and Facebook Inc.’s Sheryl Sandberg over their companies’ efforts to stop foreign meddling and deceptive messages.

“If the answer is regulation, let’s have an honest dialogue about what that looks like,” Senator Richard Burr, the Republican chairman of the Senate Intelligence Committee, said at a hearing with the tech executives on Wednesday that stretched over 2 1/2 hours.

Sandberg and Dorsey Pressed on Regulation as Twitter Shares Fall

Dorsey, the Twitter CEO who’s more comfortable tweeting than speaking, read his opening statement from his mobile phone and said he overcame his shyness because of the importance of the issues being discussed. Twitter fell as much as 6.7 percent as Dorsey testified, saying that there will be “massive shifts” in how Twitter and other social media companies operate.

“We need to question the fundamental incentives that are in our product today,” Dorsey said, with a candor that may have unnerved investors.

By contrast, Sandberg, Facebook’s chief operating officer, an accomplished public speaker, spoke more cautiously, sticking mostly to her company’s past positions, even as she acknowledged that 3 percent to 4 percent of Facebook accounts are fake at any point in time. Known for her book “Lean In” on women’s empowerment, Sandberg is practiced in the ways of Washington from her time as an aide to former Treasury Secretary Larry Summers.

Sandberg and Dorsey Pressed on Regulation as Twitter Shares Fall

The Justice Department issued a statement after the hearing saying that it had monitored the session closely and adding that Attorney General Jeff Sessions “has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.”

The message, which made no mention of election meddling, echoed criticism by President Donald Trump and some conservative Republicans that the social networks are stifling conservative viewpoints and may be violating antitrust laws.

Empty Chair

There was an empty chair in the committee’s hearing room where Google’s witness had been invited to sit. The committee turned down the company’s offer to send Chief Legal Officer Kent Walker in place of Larry Page, chief executive officer of Google’s parent Alphabet Inc., or Google CEO Sundar Pichai. Burr said he was “disappointed Google decided against sending the right senior-level executive.”

Republican Senator Tom Cotton of Arkansas said Google may not have shown up because it feared being questioned about reports it’s considering acquiescing to censorship by China to get access to that country’s huge market.

Intelligence Committee members raised the prospect for government regulation throughout the hearing, as senators suggested voluntary efforts by the social media companies continue to fall short.

Senator Mark Warner, the committee’s top Democrat, invoked the specter of fake information on social networks shaking financial markets. “Imagine the damage to the markets if forged communications from the Fed chairman were leaked online,” he said. “Or consider the price of a Fortune 500 company’s stock if a dishonest short-seller was able to spread false information about that company’s CEO -- or the effects of its products -- rapidly online?"

The hearing will set the tone for the coming two months as tech companies and the U.S. government awkwardly collaborate to fight foreign influence campaigns ahead of November’s midterm elections, a contest for control of Congress. Social media platforms, which can serve as a vehicle to spread messages covertly, have become a tool of choice for adversaries seeking to broaden divisions in the U.S. and meddle in American politics, as intelligence agencies found Russia did in the 2016 presidential campaign.

Google said in a statement that Walker would be in Washington on Wednesday, “where he will deliver written testimony, brief members of Congress on our work, and answer any questions they have.” Instead, the committee left an empty chair with a sign labeled “Google.”

Questions for Google

Warner said, “Our members have a series of difficult questions about structural vulnerabilities on a number of Google’s platforms that we will need answered.” He cited vulnerabilities that he said include “absurd conspiracies” that turn up as Google search results, “divisive videos” linked to Russia on YouTube, and “hacking attempts” on Gmail.

Dorsey, whose company has been criticized by conservatives who say it’s restricting their provocative messages, said, “We believe people will learn faster by being exposed to a wide range of opinions and ideas. We aren’t proud of how that free and open exchange has been weaponized and used to distract and divide people, and our nation.”

“When I think of our work, I think of my mom and dad in St. Louis, a Democrat and a Republican,” Dorsey said. “For them Twitter has always been a source of joy, learning and connection to something bigger.”

Sandberg said Facebook has “always shared information with other companies but we are doing better and can continue to do better. The faster we can collaborate, the faster we share those tips with each other, the stronger our collective defense will be.”

Asked how Facebook uses information to sell advertising, Sandberg said “privacy and advertising aren’t at odds. In fact they go together” and users can control their privacy settings.

Questioned by Warner about whether Facebook has a “moral and legal obligation” to take down accounts encouraging violence, Sandberg said, “I strongly believe that” and “we need to do more.”

Warner responded that social media companies that fail to do so should face sanctions.

Republican Senator Susan Collins said it’s critical that users of social networks be informed when accounts they followed are taken down as bogus.

“We need to tell people that they were taking in or victims -- innocent victims -- of a foreign influence campaign,” she said.

Russian Troll Farm

Sandberg and Dorsey highlighted their companies’ detection and removal of accounts associated with the Internet Research Agency, a so-called troll farm with links to Russia’s military intelligence unit. This comes after the February indictment of a dozen individuals who had been employed by the St. Petersburg-based agency under Special Counsel Robert Mueller’s continuing investigation.

Facebook removed more than 270 Internet Research Agency accounts in April, according to Sandberg’s prepared testimony. These accounts are in addition to the 470 similar accounts and pages that Facebook removed between June 2015 and August 2017, she said.

Twitter has removed a total 3,843 accounts for possible affiliation with the Internet Research Agency, according to Dorsey’s prepared testimony for a House Energy and Commerce Committee hearing scheduled for later Wednesday.

This year, U.S. concern about political interference hasn’t been limited to Russia. Covert accounts linked to Iran also have cropped up.

In August, Twitter removed 770 accounts that were based in Iran and that engaged in coordinated messaging. Most of those accounts were created after the presidential election and claimed U.S. affiliation or sought to reach American audiences, according to Dorsey’s testimony.

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