How Facebook stumbled to the edge of a government breakup

Key Points
  • Facebook used to be considered an example of innovation and success in tech and business.
  • Now, the company is facing calls for its breakup.
Facebook Chairman and CEO Mark Zuckerberg testifies at a House Financial Services Committee hearing in Washington, October 23, 2019.
Erin Scott | Reuters

After a three-year string of scandals, Facebook finds itself staring down four separate antitrust investigations, a former co-founder who wants the company split apart and a front-runner presidential candidate who has made the breakup of the company a key part of her campaign.

It's a far cry from a few short years ago, when people viewed Facebook and its CEO Mark Zuckerberg as prime examples of tech innovation and an inspiration for other business and tech leaders.

Here's a look back at the events of the last three years that could force Zuckerberg to go to the mat to fight a breakup.

Nov. 10, 2016 — Zuckerberg rejects idea of Facebook's fake news problem

Following the 2016 U.S. presidential election, a number of journalists criticized Facebook for how it handled false and misleading news stories and propaganda in the run-up to the election.

In Zuckerberg's first public appearance after the election, interviewer David Kirkpatrick asked him about the issue. He dismissed it outright.

"Personally I think the idea that fake news on Facebook, which is a very small amount of the content, influenced the election in any way — I think is a pretty crazy idea," Zuckerberg said.

This was the moment when sentiment toward the company began to sour.

April 27, 2017 — Facebook confirms election interference

Facebook confirmed its critics' fears when it issued a case study of the 2016 election. Though the paper was vague in detail and made no reference to Russian interference, it confirmed that groups had attempted to use its social network to sway the outcome of the 2016 election. This reduced trust in Facebook and highlighted the company's outsize influence on its users.

March 17, 2018 — Cambridge Analytica

Facebook's fake news problem was a black eye for the company, but it was nothing compared to the Cambridge Analytica scandal that broke in March 2018.

The Guardian and the New York Times reported that political consulting firm Cambridge Analytica had improperly accessed the data of 50 million Facebook users, and had used that data to target voters on Facebook to get them to support Trump in the 2016 presidential campaign. The number was later revised to 87 million Facebook profiles.

Although the details were not that damning -- it's not clear whether Cambridge's tactics actually worked -- they bolstered the public impression that Facebook had undue influence over elections.

Facebook's public response made matters worse. The company tried to get ahead of the reports by publishing a Friday night blog post on March 16, saying it was suspending Cambridge Analytica for improperly accessing user data. After the reports went live on Saturday, the company remained silent for five days without addressing the public.

March 20, 2018 — FTC opens investigation

U.S. regulators wasted no time looking into how Facebook allowed Cambridge Analytica to harvest user data. The Federal Trade Commission launched an investigation into the matter days later, according to the Washington Post.

April 10, 2018 — Zuckerberg testifies

As a result of the Cambridge Analytica scandal, Zuckerberg was called to Washington to testify before lawmakers.

Members of Congress grilled him on several matters, but it was Sen. Lindsey Graham who asked Zuckerberg to name Facebook's competiton. Zuckerberg began to detail how Facebook competes in a number of areas with multitudes of apps.

Unsatisfied with the answer, Graham asked "You don't think you have a monopoly?"

"It certainly doesn't feel like that to me," Zuckerberg responded.

Dec. 5, 2018 — U.K. Parliament releases internal Facebook documents showing aggressive tactics

The U.K. Parliament published 250 pages of internal Facebook documents in December 2018 that provided a number of insights into the company's strategy against competitors throughout its history. The documents were obtained as part of a lawsuit against Facebook by Six4Three, a company that had developed software on Facebook and later alleged anti-competitive practices by the social network.

Among those documents was an exchange in which Zuckerberg personally instructed one of his employees to cut off the ability for users of Twitter's Vine social video app to connect it with Facebook as a way to easily find friends on the new service.

March 8, 2019 — Warren calls for Facebook breakup

Facebook was pulled into the middle of the 2020 U.S. presidential election when Democractic candidate Sen. Elizabeth Warren published a blog post calling for the breakup of several Big Tech companies on grounds of antitrust and unfair competition.

Specifically, Warren accused Facebook of using its acquisition of Instagram and WhatsApp to limit competition, and she said that if she were elected, she would appoint regulators to unwind those "anti-competitive mergers."

March 30, 2019 — Zuckerberg asks for regulation

With more politicians expressing concerns over Facebook's power, Zuckerberg tried to get ahead of calls for a breakup with an op-ed in the Washington Post where he admitted the tech industry needs more regulation, and asked for clear guidance.

"From what I've learned, I believe we need new regulation in four areas: harmful content, election integrity, privacy and data portability," he wrote, outlining specific ideas for each.

May 9, 2019 — Facebook co-founder Chris Hughes calls for breakup

Calls to break up the company gained another prominent proponent in May when Facebook Co-founder Chris Hughes published a lengthy New York Times opinion piece, saying Facebook now holds more power over speech than a private-sector entity should.

"The most problematic aspect of Facebook's power is Mark's unilateral control over speech," Hughes wrote. "There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people."

June 3, 2019 — FTC opens antitrust probe

The FTC was the first agency to kick off an antitrust-focused investigation into Facebook, according to the Wall Street Journal. The agency, which was already looking at Facebook due to the Cambridge Analytica scandal, had Facebook in its investigative crosshairs, the report said.

June 26, 2019 — Zuckerberg argues against Facebook breakup

Zuckerberg directly addressed the growing calls for a Facebook breakup during a public appearance at the Aspen Ideas Festival, arguing that the company's size is what allows it to tackle problems like fake news.

"The question that I think we have to grapple with is that breaking up these companies wouldn't make any of those problems better," Zuckerberg said.

"The amount that we're investing in safety and security is greater than the whole revenue of our company was earlier this decade when we went public, so it just would not have been possible to do the things we're doing at a smaller scale."

July 24, 2019 — FTC fines Facebook $5 billion

The FTC announced Facebook had agreed to pay a record $5 billion penalty as a result of the agency's probe following the Cambridge Analytica scandal. The fine was the largest ever imposed on a company for violating consumer privacy, the FTC said in its announcement.

In addition to the fine, Facebook agreed to adopt a new privacy program that would require Zuckerberg and compliance officers to submit quarterly certifications to the FTC assuring the company is in compliance.

"Any false certification will subject them to individual civil and criminal penalties," the FTC said.

Sept. 6, 2019 — State attorneys general open antitrust probe

Eight state attorneys general announced they had begun investigating Facebook for antitrust reasons. The coalition included Colorado, Florida, Iowa, Nebraska, New York, North Carolina, Ohio, Tennessee and Washington, D.C.

"We will use every investigative tool at our disposal to determine whether Facebook's actions may have endangered consumer data, reduced the quality of consumers' choices, or increased the price of advertising," investigation lead Letitia James, the New York attorney general, said in a statement.

Sept 19, 2019 — Zuckerberg goes to Washington

In a rare move, Zuckerberg pays a visit to Washington, D.C., where he has private meetings with President Trump and lawmakers, including some who have proposed regulation that could affect the company. It's quite a change from 2017, when he didn't even show up to the first congressional hearings about foreign powers using Facebook to try and influence the 2016 presidential election.

Sept. 25, 2019 — DOJ reportedly opens antitrust probe

Following the FTC and state attorneys general, the U.S. Justice Department opened an antitrust investigation on Facebook in October, according to a Reuters report.

Oct. 1, 2019 — In leaked recording, Zuckerberg says he'll "go to the mat" to fight breakup

Zuckerberg told Facebook employees that he expects Facebook will have a legal challenge if Warren is elected president, according to recordings of internal company meetings in July that were published by The Verge.

In the recordings, Zuckerberg said he bets Facebook would win the legal challenge, but he would not like a legal fight with the U.S. government.

"We care about our country and want to work with our government and do good things," Zuckerberg said. "But look, at the end of the day, if someone's going to try to threaten something that existential, you go to the mat and you fight."

Oct. 22, 2019 — State attorneys general probe expands

The coalition of state attorneys general investigating Facebook announced it had expanded to include a total of 47 states and U.S. territories.

"As we continue our investigation, we will use every investigative tool at our disposal to determine whether Facebook's actions stifled competition and put users at risk," James said in a statement.

Oct. 30, 2019 — Zuckerberg makes case against Instagram divestiture

Speaking with analysts during Facebook's third-quarter earnings report, Zuckerberg was asked about how the increased regulatory scrutiny could impact the company. Zuckerberg's answer focused on Facebook's 2012 $1 billion acquisition of Instagram, saying that the photo-sharing app would not be what it is today without Facebook's help.

"A lot of the antitrust questions that are out there that are going to be about our acquisition of Instagram, right?" he said. "There's going to be a lot of scrutiny of that acquisition in particular."

Nov. 6, 2019 — California discloses Facebook probe

The most notable absentee in the coalition of 47 state attorneys general probing Facebook was the company's home state of California.

That may be because the state had quietly opened its own investigation into the company in 2018.

California State Attorney General Xavier Becerra made the disclosure after the state filed court documents seeking the San Francisco County Superior Court to require Facebook to comply with its requests for additional documents related to the Cambridge Analytica scandal.

Becerra accused Facebook of dragging its feet by failing to comply with subpoenas, and said that the company had not searched emails of Zuckerberg and COO Sheryl Sandberg that might relate to its investigation.

Nov. 6, 2019 — NBC publishes trove of internal Facebook documents

NBC published a trove of 7,000 documents related to the Six4Three lawsuit against the social network.

The documents include 4,000 internal Facebook communications that discuss a number of topics, including how the company picked and choose which companies received preferential access to user data and which were kicked off altogether.

An employee described Zuckerberg as a "master of leverage" in one document. An employee in another document described the company's decision to give data access to companies based on how threatening they are to Facebook as "sort of unethical."

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