[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                     AN EXAMINATION OF FACEBOOK AND
                      ITS IMPACT ON THE FINANCIAL
                      SERVICES AND HOUSING SECTORS

=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 23, 2019

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-63
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
42-452 PDF                  WASHINGTON : 2020                     
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             ANN WAGNER, Missouri
GREGORY W. MEEKS, New York           PETER T. KING, New York
WM. LACY CLAY, Missouri              FRANK D. LUCAS, Oklahoma
DAVID SCOTT, Georgia                 BILL POSEY, Florida
AL GREEN, Texas                      BLAINE LUETKEMEYER, Missouri
EMANUEL CLEAVER, Missouri            BILL HUIZENGA, Michigan
ED PERLMUTTER, Colorado              STEVE STIVERS, Ohio
JIM A. HIMES, Connecticut            ANDY BARR, Kentucky
BILL FOSTER, Illinois                SCOTT TIPTON, Colorado
JOYCE BEATTY, Ohio                   ROGER WILLIAMS, Texas
DENNY HECK, Washington               FRENCH HILL, Arkansas
JUAN VARGAS, California              TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey          LEE M. ZELDIN, New York
VICENTE GONZALEZ, Texas              BARRY LOUDERMILK, Georgia
AL LAWSON, Florida                   ALEXANDER X. MOONEY, West Virginia
MICHAEL SAN NICOLAS, Guam            WARREN DAVIDSON, Ohio
RASHIDA TLAIB, Michigan              TED BUDD, North Carolina
KATIE PORTER, California             DAVID KUSTOFF, Tennessee
CINDY AXNE, Iowa                     TREY HOLLINGSWORTH, Indiana
SEAN CASTEN, Illinois                ANTHONY GONZALEZ, Ohio
AYANNA PRESSLEY, Massachusetts       JOHN ROSE, Tennessee
BEN McADAMS, Utah                    BRYAN STEIL, Wisconsin
ALEXANDRIA OCASIO-CORTEZ, New York   LANCE GOODEN, Texas
JENNIFER WEXTON, Virginia            DENVER RIGGLEMAN, Virginia
STEPHEN F. LYNCH, Massachusetts      WILLIAM TIMMONS, South Carolina
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    October 23, 2019.............................................     1
Appendix:
    October 23, 2019.............................................    97

                               WITNESSES
                      Wednesday, October 23, 2019

Zuckerberg, Mark, Chairman and Chief Executive Officer, Facebook.     4

                                APPENDIX

Prepared statements:
    Zuckerberg, Mark.............................................    98

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    Letter to Mark Zuckerberg from The Leadership Conference on 
      Civil and Human Rights, dated October 21, 2019.............   105
    Written statement of Consumer Reports........................   110
Wagner, Hon. Ann:
    ``The Internet Is Overrun With Images of Child Sexual Abuse. 
      What Went Wrong?''.........................................   114
Zuckerberg, Mark:
    Written responses to questions for the record from Chairwoman 
      Waters.....................................................   128
    Written responses to questions for the record from 
      Representative Axne........................................   149
    Written responses to questions for the record from 
      Representative Beatty......................................   162
    Written responses to questions for the record from 
      Representative Cleaver.....................................   167
    Written responses to questions for the record from 
      Representative Dean........................................   191
    Written responses to questions for the record from 
      Representative Foster......................................   192
    Written responses to questions for the record from 
      Representative Gabbard.....................................   196
    Written responses to questions for the record from 
      Representative Gonzalez....................................   197
    Written responses to questions for the record from 
      Representative Green.......................................   199
    Written responses to questions for the record from 
      Representative Lynch.......................................   200
    Written responses to questions for the record from 
      Representative Ocasio-Cortez...............................   203
    Written responses to questions for the record from 
      Representative Porter......................................   208
    Written responses to questions for the record from 
      Representative Pressley....................................   227

 
                     AN EXAMINATION OF FACEBOOK AND
                      ITS IMPACT ON THE FINANCIAL
                      SERVICES AND HOUSING SECTORS

                              ----------                              


                      Wednesday, October 23, 2019

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:07 a.m., in 
room 2128, Rayburn House Office Building, Hon. Maxine Waters 
[chairwoman of the committee] presiding.
    Members present: Representatives Waters, Maloney, 
Velazquez, Sherman, Meeks, Clay, Scott, Green, Cleaver, 
Perlmutter, Himes, Foster, Beatty, Heck, Vargas, Gottheimer, 
Gonzalez of Texas, Lawson, Nicolas, Tlaib, Porter, Axne, 
Casten, Pressley, McAdams, Ocasio-Cortez, Wexton, Lynch, 
Gabbard, Adams, Dean, Garcia of Illinois, Garcia of Texas, 
Phillips; McHenry, King, Lucas, Posey, Luetkemeyer, Huizenga, 
Duffy, Stivers, Wagner, Barr, Tipton, Williams, Hill, Emmer, 
Zeldin, Loudermilk, Mooney, Davidson, Budd, Kustoff, 
Hollingsworth, Gonzalez of Ohio, Rose, Steil, Gooden, and 
Riggleman.
    Chairwoman Waters. The Committee on Financial Services will 
come to order. Without objection, the Chair is authorized to 
declare a recess of the committee at any time.
    Today's hearing is entitled, ``An Examination of Facebook 
and its Impact on the Financial Services and Housing Sectors.''
    I now recognize myself for 5 minutes to give an opening 
statement.
    Today, we are here to examine the impact of Facebook on the 
financial services and housing sectors. Our sole witness is 
Facebook's chairman and CEO, Mark Zuckerberg.
    Facebook's plans to create a digital currency, Libra, and a 
digital wallet, Calibra, raise many concerns relating to 
privacy, trading risk, discrimination, opportunities for 
diverse-owned financial firms, national security, monetary 
policy, and the stability of the global financial system. I and 
other Democrats have called for a moratorium on Facebook's 
development of its digital currency, Libra, and digital wallet, 
Calibra, until Congress can examine the issues associated with 
a big tech company developing these digital products, and take 
action.
    As I have examined Facebook's various problems, I have come 
to the conclusion that it would be beneficial for all if 
Facebook concentrates on addressing its many existing 
deficiencies and failures before proceeding any further on the 
Libra project. Let us review the record.
    First, on diversity and inclusion, Facebook has utterly 
failed. Facebook's executive ranks and workforce continue to be 
mostly white and male. Since Reverend Jesse Jackson and the 
Rainbow PUSH Coalition called upon Silicon Valley companies, 
including Facebook, to release their diversity statistics more 
than 5 years ago, the representation of African Americans and 
Hispanics has increased by less than 2 percent. Facebook also 
told us that they have zero dollars managed by diverse firms.
    On fair housing, Facebook has been sued by the National 
Fair Housing Alliance for enabling advertisers to engage in 
discrimination on its advertising platforms. The U.S. 
Department of Housing and Urban Development (HUD) has also 
filed an official charge of discrimination against Facebook for 
its advertising practices, including the company's own ad 
delivery algorithms, which were found to have a discriminatory 
impact when advertisers did not target their audience in 
discriminatory ways.
    I understand that Facebook has refused to cooperate with 
HUD's fair housing investigation by refusing to provide 
relevant data.
    On competition and fairness, Facebook is the subject of an 
antitrust investigation by the attorneys general of 47 States 
and the District of Columbia.
    On protecting consumers, Facebook was fined $5 billion by 
the Federal Trade Commission for deceiving consumers and 
failing to keep their data private.
    On elections, Facebook enabled the Russian government to 
interfere with our election in 2016, with ads designed to pit 
Americans against each other, suppress the vote, and boost 
Trump. For example, Facebook allowed a counterfeit Black Lives 
Matter website to operate with the goal of discouraging African 
Americans from voting.
    Three years later, these activities are still continuing on 
Facebook. We learned just this week that Russia and Iran are 
using the same tactics to meddle in our next election.
    Now on political speech, last week they announced that 
Facebook would not be doing fact-checking on political ads, 
giving anyone that Facebook labels a politician, a platform to 
lie, mislead, and misinform the American people, which will 
also allow Facebook to sell more ads. The impact of this will 
be a massive voter suppression effort that will move at the 
speed of a click.
    Your claim to promote freedom of speech does not ring true, 
Mr. Zuckerberg. Each month, 2.7 billion people use your 
products. That is over a third of the world's population. That 
is huge. That is so big that it is clear to me and to anyone 
who hears this list that perhaps you believe that you are above 
the law, and it appears that you are aggressively increasing 
the size of your company and are willing to step on or over 
anyone, including your competitors, women, people of color, 
your own users, and even our Democracy, to get what you want.
    With all of these problems I have outlined, and given the 
company's size and reach, it should be clear why we have 
serious concerns about your plans to establish a global digital 
currency that would challenge the U.S. dollar. In fact, you 
have opened up a serious discussion about whether Facebook 
should be broken up.
    The Chair now recognizes the ranking member of the 
committee, the gentleman from North Carolina, Mr. McHenry, for 
5 minutes for an opening statement.
    Mr. McHenry. Thank you, Chairwoman Waters.
    And thank you, Mr. Zuckerberg, for your appearance.
    Today is a trial on American innovation. There is a growing 
concern about the role that technology plays in our lives. That 
is warranted. That is necessary.
    Yes, technology has led to greater prosperity, more freedom 
of expression, and the ability to transcend the limits of space 
and time to connect us with one another. It is a powerful tool 
for our society, developed here in the United States, and gone 
global.
    But we know there is also a downside to all of this. The 
vitriol on social media is frightening. The growing inequality 
between those who have access to the latest tech gadgets remain 
on the coasts, while folks living in rural America are still 
trying to get the same connectivity necessary to compete in a 
global marketplace.
    Not to mention the anxiety of the age. That is a deep 
cultural moment for us, not as politicians, but as Americans. 
That nervous feeling that you need to check your phone 
throughout the day, is something that is now a cultural 
occurrence for all of us, especially Members of Congress, most 
of whom in this room are doing that right now.
    There is a lot of anger out there, and now it is being 
directed at the architects of this system. That is why you are 
here, Mr. Zuckerberg. That is why you are here today. You are 
one of the titans of what we call the digital age. It is an 
enormous amount of responsibility and an enormous weight based 
off the innovation that you have wrought.
    And maybe it is not about Libra, and it is not just about 
some housing ads, no, and maybe it is not really even about 
Facebook at all. It is that larger question. And fair or not 
fair, you are here today to answer for the digital age.
    But of course, you are not America's first innovator, and 
we hope you are not America's last. This is not the first time 
that America has faced difficult questions about technology. 
Sadly, throughout the history of innovation, a major theme is 
the exploitation of fear.
    Politicians, enabled by special interests and a lack of 
understanding of new technology, use fear to justify what is 
ultimately a power grab. New laws, new regulation, but 
ultimately, old and tired ways to centralize power here in 
Washington or other systems of government.
    Some of this has led in the past to comical results, and we 
hope to avoid that now. But just as one example, there was a 
time when legislators pushed for what was then called, ``red 
flag laws,'' which required vehicles--so-called horseless 
carriages--of that age to immediately stop on the side of the 
road and disassemble the automobile until equestrians or 
livestock were sufficiently pacified.
    But other times in history, the use of fear was not so 
funny. Our last hearing on Libra, for example, was a moment 
when Members of Congress on this dais actually compared the 
technology, that technology of Libra to the terrorist attacks 
of September 11th.
    Mr. Sherman. Will the gentleman yield?
    Mr. McHenry. Look, I have my own qualms about Facebook and 
Libra--
    Mr. Sherman. You are making a reference to my comments. 
Will the gentleman yield?
    Chairwoman Waters. The time belongs to the gentleman from 
North Carolina.
    Mr. McHenry. Thank you for taking the bait.
    Look, I have my qualms about Facebook and Libra, I do, and 
the shortcomings of big tech. There are many. Yes, there are. 
But if history has taught us anything, it is that it's better 
to be on the side of American innovation, competition, and most 
importantly, the freedom to build a better future for all of 
us.
    Progress is not preordained, and American progress and 
American domination of free speech and global rights is not 
preordained. Let us not forget that the wave of innovation is 
spreading across the world, with or without us.
    So that is why I believe that American innovation is on 
trial today in this hearing, and the question is, are we going 
to spend our time trying to devise ways for government planners 
to centralize and control as to who, when, and how innovators 
can innovate?
    Or will we spend time contemplating and leading the way on 
the question of whether or not it will be American innovation 
that leads the next century, being led by American values, the 
notion that we have of the rule of law and free speech rights 
and American-driven jobs and innovation? Are we going to spend 
our time building a brighter future for Americans or trying to 
tear each other apart?
    I yield back.
    Chairwoman Waters. I would like to welcome today's witness, 
Mr. Mark Zuckerberg, chairman and chief executive officer of 
Facebook. This is Mr. Zuckerberg's first appearance before this 
committee, but I believe that Mr. Zuckerberg needs no 
introduction.
    Mr. Zuckerberg, without objection, your written statement 
will be made a part of the record. And you will have 5 minutes 
to summarize your testimony. When you have 1 minute remaining, 
a yellow light will appear. At that time, I would ask you to 
wrap up your testimony so we can be respectful of the committee 
members' time.
    Mr. Zuckerberg, you are now recognized for 5 minutes to 
present your oral testimony.

  STATEMENT OF MARK ZUCKERBERG, CHAIRMAN AND CHIEF EXECUTIVE 
                       OFFICER, FACEBOOK

    Mr. Zuckerberg. Thank you. Chairwoman Waters, Ranking 
Member McHenry, and members of the committee, thank you for the 
opportunity to testify today.
    As we sit here, there are more than a billion people around 
the world who don't have access to a bank account but could 
through mobile phones if the right system existed, and that 
includes more than 14 million people right here in the United 
States.
    Being shut out of the financial system has real 
consequences for people's lives, and it is often the most 
disadvantaged people who pay the highest price. People pay far 
too high a cost and have to wait far too long to send money 
home to their families abroad. The current system is failing 
them.
    The financial industry is stagnant, and there is no digital 
financial architecture to support the innovation that we need. 
I believe that this problem can be solved, and Libra can help.
    The idea behind Libra is that sending money should be as 
easy and secure as sending a message. Libra will be a global 
payment system, fully backed by a reserve of cash and highly 
liquid assets.
    I believe this is something that needs to get built, but I 
get that I am not the ideal messenger for this right now. We 
have faced a lot of issues over the past few years, and I am 
sure there are a lot of people who wish it were anyone but 
Facebook who was helping to propose this.
    But there is a reason that we care about this, and that is 
because Facebook is about putting power in people's hands. Our 
services already give people a voice to express what matters to 
them and to build businesses that create opportunity. Giving 
people control of their money is important, too, and a simple, 
secure, and stable way to transfer money is empowering.
    Over the long term, this means that more people will 
transact on our platforms, and that will be good for our 
business. But even if it isn't, I still think this could help 
people everywhere.
    Before we move forward, there are important risks that need 
to be addressed. There are questions about financial stability, 
fighting terrorism, and more, and I am here today to discuss 
those risks and how we plan to address them. But I also hope 
that we get a chance to talk about the risks of not innovating, 
because while we debate these issues, the rest of the world 
isn't waiting.
    China is moving quickly to launch a similar idea in the 
coming months. Libra is going to be backed mostly by dollars, 
and I believe that it will extend America's financial 
leadership around the world, as well as our democratic values 
and oversight. But if America doesn't innovate, our financial 
leadership is not guaranteed.
    I actually don't know if Libra is going to work, but I 
believe that it is important to try new things as long as you 
are doing so responsibly. That is what has made America 
successful, and it is why our tech industry has led the world.
    We co-wrote a White Paper to put this idea out into the 
world and to start a conversation with regulators and experts 
and governments, and today's hearing is an important part of 
that process. But what we are discussing today is too important 
for any single company to undertake on its own, and that is why 
we helped to found the Libra Association. It is a coalition of 
21 companies and nonprofits that are working to give everyone 
access to financial tools.
    Even though the Libra Association is independent and we 
don't control it, I want to be clear: Facebook will not be a 
part of launching the Libra payment system anywhere in the 
world, even outside the U.S., until the U.S. regulators 
approve.
    The last time I testified before Congress, I talked about 
taking a broader view of our responsibility, and that includes 
making sure our services are used for good and preventing harm. 
And I want to discuss that across other aspects of work today 
as well.
    People shouldn't be discriminated against on any of our 
services. We have policies in place to prevent hate speech and 
remove harmful content. But discrimination can also show up in 
how ads are targeted and shown, too. As part of a settlement 
with civil rights groups, we have banned advertisers from using 
age, gender, or ZIP Codes to target housing, employment, or 
credit opportunities, and we have limited interest-based 
targeting for these ads, too. This is part of our commitment to 
support civil rights and prevent discrimination.
    I also know that we need more diverse perspectives in our 
company. Diversity leads to better decisions and better 
services for our community. We have made diversity a priority 
in hiring, and we have also made a commitment that within 5 
years, more than 50 percent of our workforce will be women, 
people of color, and other underrepresented groups.
    We have made some progress here. There are more people of 
color and women in technical and business roles, and 
underrepresented people in leadership at Facebook now, but I 
know that we still have a long way to go.
    Chairwoman Waters, Ranking Member McHenry, and members of 
the committee, this has been a challenging few years for 
Facebook. I recognize that we play an important role in society 
and have unique responsibilities because of that, and I feel 
blessed to be in a position where we can make a difference in 
people's lives. And for as long as I am here, I am committed to 
using our position to push for big ideas that I believe can 
help empower people.
    Thank you, and I am looking forward to answering your 
questions.
    [The prepared statement of Mr. Zuckerberg can be found on 
page 98 of the appendix.]
    Chairwoman Waters. Thank you very much.
    I now recognize myself for 5 minutes for questions.
    It is no secret that Facebook allowed Russia to undermine 
and divide our country through divisive online ads. The 
Senate's investigation discovered that African Americans were 
targeted the most by Russia, specifically in places where Black 
Lives Matter groups were the most active.
    Despite all of your technological expertise, Russia and 
Iran are at it again for the upcoming election. Then last week, 
you announced a new ad policy that gives politicians a license 
to lie so you can earn more money off of this division, I 
suppose.
    Facebook changes the rules when it can benefit itself. Last 
year, Facebook banned all cryptocurrency ads on its platform 
because, ``They are frequently associated with misleading or 
deceptive promotional practices.'' Seems fair.
    Then, earlier this year, Facebook rolled back the 
cryptocurrency ad ban, bought a blockchain company, and 
announced its own cryptocurrency. So, tell us what changed? How 
did cryptocurrency go from being misleading and deceptive last 
year to becoming a means for financial inclusion this year?
    It seems to me that you shifted your stance because you 
realized that you can use your size and your users' data to 
dominate the cryptocurrency market. You change your policy when 
it benefits you. You reinstated cryptocurrency ads because you 
had plans to start your own cryptocurrency.
    This brings me back to your new policy on political speech. 
My question to you is, how does this new policy benefit you? 
Because it seems that a policy that allows politicians to lie, 
mislead, and deceive would also allow Facebook to sell more ads 
to those politicians, thus making your company more money. But 
tell me, how does Facebook benefit?
    Mr. Zuckerberg. Chairwoman, thanks for those questions. I 
would like to address all of the things that you mentioned in 
there.
    On elections, you are right that in 2016, we were on our 
back foot in terms of preventing Russia from attempting to 
interfere in our elections. We have spent a lot of the last few 
years building systems that are more sophisticated than any 
other company has at this point and, frankly, a lot of 
governments, too, for defending against foreign interference.
    This Monday, we announced that we had proactively 
identified a network of fake Russian accounts and a few 
networks of Iranian fake accounts that we proactively took 
down, which certainly, as you say, signals that these nation-
states are still attempting to interfere, but I hope will also 
give us some confidence that our systems are now more 
sophisticated to proactively identify and address these things.
    On your question about political ads, from a business 
perspective, the very small percent of our business that is 
made up of political ads does not come anywhere close to 
justifying the controversy that this incurs for our company. 
So, this really is not about money.
    This is, on principle, I believe in giving people a voice. 
I believe that ads can be an important part of that voice. I 
think especially in the political process for challenger 
candidates, and for local candidates or advocacy groups whose 
message might not otherwise be covered by the media, having ads 
can be an important way to inject your message into the global 
debate.
    Chairwoman Waters. Let me interrupt you for a minute. Are 
you telling me--I think as you said to me before, you plan on 
doing no fact-checking on political ads?
    Mr. Zuckerberg. Chairwoman, our policy is that we do not 
fact-check politicians' speech, and the reason for that is that 
we believe that in a democracy, it is important that people can 
see for themselves what politicians are saying. Political 
speech is some of the most scrutinized speech already in the 
world--
    Chairwoman Waters. Do you fact-check on any ads at all?
    Mr. Zuckerberg. Yes.
    Chairwoman Waters. Describe what you fact-check on.
    Mr. Zuckerberg. Thank you for the opportunity to clarify. 
Facebook itself actually does not fact-check. What we do is, we 
have feedback that people in our community don't want to see 
viral hoaxes or kind of widespread--
    Chairwoman Waters. So, let me be clear, you do no fact-
checking on any ads. Is that correct?
    Mr. Zuckerberg. Chairwoman, what we do is we work with a 
set of independent fact-checkers who--
    Chairwoman Waters. Somebody fact-checks on ads? You 
contract with someone to do that, is that right?
    Mr. Zuckerberg. Chairwoman, yes.
    Chairwoman Waters. And tell me who is it that they fact-
check on?
    Mr. Zuckerberg. Chairwoman, what we do is when content is 
getting a lot of distribution and is flagged by members of our 
community or by our technical systems, it can go into a queue 
to be reviewed by a set of independent fact-checkers. They 
can't fact-check everything, but the things that they get to--
and if they mark something as false, then we--
    Chairwoman Waters. Okay. My time has expired, and someone 
else will continue with this line of questioning.
    I now recognize the gentleman from North Carolina, the 
ranking member, Mr. McHenry, for 5 minutes.
    Mr. McHenry. As I mentioned in my opening statement, I 
think there are bigger challenges and opportunities facing 
America than your ad model, or even the question of Libra. So 
let us start with your speech last week. Have you changed your 
view in terms of technology in China from before your speech on 
Friday to what we read and heard from your speech on Friday?
    Mr. Zuckerberg. Congressman, no, I have not changed my 
views in the last week.
    Mr. McHenry. No, no. Ten years ago versus today, on your 
view of China and technology versus your speech on Friday.
    Mr. Zuckerberg. Congressman, I think it is fair to say that 
my views have evolved. I probably, 10 years ago, would have 
been more optimistic that trying to work in China could have 
contributed to making a more open society. And today, it seems 
that in some cases, working in China not only does not do that 
but compromises American companies' ability to promote our 
values abroad and around the world. And I think we have seen 
that in the last few weeks in a number of cases.
    Mr. McHenry. You mentioned in your speech that a decade 
ago, 10 of 10 of the top companies on the internet were 
American. Now, 6 of 10 are Chinese. So the question I have for 
you is why are we seeing emerging technologies driven by 
blockchain projects and digital currencies being developed 
elsewhere, such as is the case of Libra?
    Mr. Zuckerberg. Congressman, we have a lot of competition 
around the world. And you are right that over the last decade, 
pretty much all of the major internet platforms have been 
American companies with strong free expression values, and I 
just think that there is no guarantee that that is the state of 
the world going forward. Today, 6 of the top 10 companies are 
coming out of China and certainly do not share our values on 
things like expression.
    Mr. McHenry. So, on that, why Switzerland for Libra? Why 
not the United States?
    Mr. Zuckerberg. The Libra Association is an independent 
association. We are trying to set up a global payment system. 
Switzerland is where a lot of the international organizations 
are.
    Mr. McHenry. Is there greater regulatory certainty in 
Switzerland than here in the United States for this type of 
technology?
    Mr. Zuckerberg. I think Switzerland has certainly been 
forward-leaning on wanting to work through systems like this, 
but I don't want this to come across as if--
    Mr. McHenry. And the United States has not?
    Mr. Zuckerberg. Congressman, one of the things that I just 
want to be clear on is that the independent Libra Association 
is--it is independent. We are a part of it. We helped stand it 
up, but we don't control it.
    But I just want to make sure it is 100 percent clear to 
everyone today that my commitment in running Facebook is that 
we are not going to launch anything that is a product or a part 
of this until we have full support from U.S. regulators, 
regardless of what the international regulators--
    Mr. McHenry. So the project of Libra internally, before you 
handed this technology, this idea over to the association, let 
us think of this. Why would you have a project like that? Is it 
about competition with your peers globally? Is that a 
component?
    Mr. Zuckerberg. Sorry, I didn't hear that.
    Mr. McHenry. So, you have no payments platform on Facebook. 
Facebook is not a payments platform. Is that correct?
    Mr. Zuckerberg. Yes.
    Mr. McHenry. Okay. So in seeking to develop a payments 
platform internally, before you handed the technology over to 
the association for Libra, was that because of examples 
globally of competitors creating payments platforms?
    Mr. Zuckerberg. Congressman, it was partially that, and it 
is partially because I view the financial structure in the 
United States as outdated. There are two sets of work that we 
do on payments.
    One is building payment systems that allow people to send 
money on top of the existing financial system that exists. That 
work is relatively less controversial. We are doing it around 
the world in different countries on top of existing payment 
systems.
    There is another set of work, which is what we are trying 
to do with Libra, which is trying to help rethink what a modern 
infrastructure for the financial system would be if you started 
it today rather than 50 years ago on a lot of outdated systems.
    I just look at the fact that you can send a text message to 
someone around the world--
    Mr. McHenry. Okay. But let me just drill down on this. 
Alipay has 900 million users. That is a global competitor, in 
my view, to Facebook. You see Alipay and WeChat Pay working. 
Why not just do a Facebook version of Alipay in order to level 
this?
    Mr. Zuckerberg. Congressman, I think you are right that 
they are certainly competing not just with us, but all of the 
American companies on this. Part of the infrastructure that 
they are building on is a lot more modern than some of what we 
would have to build on here.
    As soon as we put forward the White Paper around the Libra 
project, China immediately announced a public-private 
partnership working with companies like that to extend the work 
that they had already done with Alipay into a digital renminbi 
as part of the belt-and-road initiative that they have. And 
they are planning on launching that in the next few months.
    Mr. McHenry. Thank you.
    Chairwoman Waters. The gentlewoman from New York, Mrs. 
Maloney, who is also the Chair of our Subcommittee on Investor 
Protection, Entrepreneurship, and Capital Markets, is 
recognized for 5 minutes.
    Mrs. Maloney. Thank you.
    Mr. Zuckerberg, you said on page 3 in your testimony that 
Facebook will not be part of launching Libra anywhere in the 
world until all the U.S. regulators approve. So which U.S. 
regulators are you talking about? There are actually many 
financial regulators, such as the Fed, the FDIC, the OCC, the 
SEC, the CFTC, the CFPB, FINSA, FHFA, and many, many more. And 
to be clear, Libra would affect all of those regulators.
    So which of those regulators do you believe need to approve 
Libra before you will support the launch, and what kind of 
approval do you believe is necessary? Do you need to see 
written approval from each regulator? Will those approvals be 
public?
    Mr. Zuckerberg. Congresswoman, thanks for the question.
    My understanding is probably all of them for different 
things. Different of regulators focus on different areas, 
whether it is financial stability or fighting crimes and fraud 
and terrorism. Different areas of the work need to get done and 
are overseen by different regulators.
    I think the processes with each of them might be a little 
bit different, but we are committed to getting all of the 
appropriate U.S. approvals before launching the Libra payment 
system in any country in the world, even where those approvals 
might not be strictly required.
    Mrs. Maloney. Just to be clear, will you commit to waiting 
until you get approval from every U.S. regulator that Libra 
affects before you will support launching Libra? Yes or no?
    Mr. Zuckerberg. Congresswoman, all of the regulators that 
have jurisdiction over a part of what we are doing, we are 
working with them and will seek approval from.
    Mrs. Maloney. A bill of mine passed the House yesterday 
which would crack down on anonymous shell companies in the 
United States, which has become a nightmare for law 
enforcement. They are the perfect vehicle for laundering money 
and for terrorism financing and criminal activity.
    With the creation of various digital currencies, we face a 
new challenge with financial transactions being anonymous. That 
is why I am concerned that the use of anonymous wallets would 
make Libra attractive to those that are looking to launder 
money.
    It is my understanding that the Calibra wallet won't be 
anonymous, but I haven't heard anything about competing 
wallets. So will you commit to not supporting any other 
anonymous wallets on Libra? I consider this a national security 
issue.
    Mr. Zuckerberg. Congresswoman, thank you for this question. 
I think it builds on a question that the chairwoman was asking 
before as well about our position on cryptocurrencies overall.
    We see a range of different cryptocurrency projects out 
there, from completely decentralized and deregulated things to 
what we are trying to do is trying to build a safe and secure 
and a regulated alternative. We think that the digital payment 
space needs that. Of course, as a big company, we are not going 
to do something that is unregulated or decentralized. We are 
going to work with the government to build something that gets 
to the same standard on anti-money-laundering and CFT that all 
of the other world-class payment systems have or exceed those 
standards.
    Sorry, I forgot the actual question.
    Mrs. Maloney. Yes.
    Mr. Zuckerberg. I was caught up in answering the 
chairwoman's question.
    [laughter]
    Mrs. Maloney. I don't think you can have strong anti-money-
laundering controls and anonymous wallets.
    Mr. Zuckerberg. Right.
    Mrs. Maloney. I see this as a new loophole for criminals 
looking to hide and launder money. So, what is your position on 
anonymous wallets? Will you commit that you won't have 
anonymous wallets, that it will be transparent? Otherwise, we 
will face the problems that we have with the LLCs, where they 
are hiding trafficking money, terrorism financing, criminal 
activity of all kinds. It is a huge problem for safety for 
Americans and is a huge problem for law enforcement.
    This is their number-one concern with this bill we passed 
yesterday with bipartisan support. But you are creating a whole 
new currency that could potentially be anonymous and could hide 
all types of criminal activity, which is a huge concern to the 
safety of Americans and national security.
    Mr. Zuckerberg. Yes, Congresswoman, I will commit that 
Facebook will do what you are saying. Our version of this, our 
wallet is going to have strong identity, is going to work with 
all of the regulators to make sure that we are at the standard 
of AML and CFT that people expect or exceed it.
    I can't sit here and speak for the whole independent Libra 
Association, but you have my commitment from Facebook.
    Mrs. Maloney. Thank you very much, and I yield back.
    Chairwoman Waters. The gentlewoman from Missouri, Mrs. 
Wagner, is recognized for 5 minutes.
    Mrs. Wagner. Thank you, Madam Chairwoman, and thank you, 
Mr. Zuckerberg, for being here.
    When Libra was announced, 28 companies joined as founding 
members by signing a nonbinding letter of intent to join the 
association. But in recent weeks, many of these founding 
members have dropped out of the association. Perhaps, they are 
not so sure it is going to work either.
    PayPal, Visa, Mastercard, Stripe, Bookings Holdings, eBay, 
and Mercado Pago have lost these--you have lost these stable 
partners, I would say, and I find it highly concerning. Very 
briefly, what do you make of these sudden departures from the 
association, and why do a number of these founding members have 
concerns whether you are up to the task of meeting our money 
laundering and regulatory standards?
    Mr. Zuckerberg. Congresswoman, thanks for the question.
    This project is too big for any one company to do on its 
own, which is why we set up this independent Libra Association 
with a number of other companies and nonprofits. It is a very 
complex project, and as you say, it is risky.
    Mrs. Wagner. Why have they departed? Just scores of stable 
partners have dropped out. Why?
    Mr. Zuckerberg. Congresswoman, I think you would have to 
ask them specifically for their--
    Mrs. Wagner. Why do you think they dropped out?
    Mr. Zuckerberg. I think because it is a risky project and 
that there has been a lot of scrutiny.
    Mrs. Wagner. Yes, it is a risky project. So, let me move on 
to something that is near and dear to my heart. As you may 
know, I wrote and passed H.R. 1865, the Fight Online Sex 
Trafficking Act. Together with the Senate's Stop Enabling Sex 
Traffickers Act, the package is widely known as FOSTA-SESTA. I 
am committed to rooting out online sex trafficking, and I 
believe that what is illegal offline should, indeed, be illegal 
online.
    Three weeks ago, the New York Times ran a report entitled, 
``The Internet is Overrun with Images of Child Sex Abuse.'' And 
I would like this submitted for the record.
    Chairwoman Waters. Without objection, it is so ordered.
    Mrs. Wagner. Sixteen-point-eight million--16.8 million, as 
confirmed by the Department of Justice, of the 18.4 million 
worldwide reports of child sexual abuse material are on 
Facebook, 16.8 of the 18.4 million. These 18.4 million reports 
from last year included a record 45 million photos and videos.
    These are absolutely shocking numbers. Moreover, it is 
estimated that 70 percent of Facebook's valuable reporting to 
NCMEC, the National Center on Missing and Exploited Children, 
would be lost if Facebook implements its end-to-end encryption 
proposal.
    Mr. Zuckerberg, how much is this figure growing year after 
year, and if you enact end-to-end encryption, what will become 
of the children who will be harmed as a result that they are 
not reported?
    Mr. Zuckerberg. Congresswoman, thanks. Child exploitation 
is one of the most serious threats that we focus on.
    Mrs. Wagner. What is Facebook doing? Sixteen-point-eight of 
the 18.4 million.
    Mr. Zuckerberg. Congresswoman, those reports come from 
Facebook. The reason why the vast majority come from Facebook 
is because I think we work harder than any other company to 
identify this behavior and report it to NCMEC and the FBI.
    Mrs. Wagner. What are you doing to shut this down? These 
accounts peddle horrific illegal content that exploits women 
and children. What are you doing, Mr. Zuckerberg, to shut this 
down?
    Mr. Zuckerberg. Congresswoman, we build sophisticated 
systems to find this behavior.
    Mrs. Wagner. Sixteen-point-eight million and growing of the 
18.4 images?
    Mr. Zuckerberg. Absolutely. Congresswoman, I don't think 
Facebook is the only place on the internet where this behavior 
is happening. I think the fact that the vast majority of those 
reports come from us reflects the fact that we actually do a 
better job than everyone else at finding it and acting on it.
    And you are right that in an end-to-end encrypted world, 
one of the risks that I am worried about, among others, to 
safety is that it will be harder to find some of this behavior.
    Mrs. Wagner. But you have said you want end-to-end 
encryption. What is going to happen to these children? They 
won't be reported then. And you are responsible, Facebook is 
responsible for 16.8 million of the 18.4 million that are out 
there last year alone.
    Mr. Zuckerberg. Congresswoman, again, I believe that there 
are probably a lot more than 18 million out there, and I think 
we are doing a good job of finding this. But I think you are 
right that an end to--
    Mrs. Wagner. What are you going to do to shut it down, Mr. 
Zuckerberg?
    Mr. Zuckerberg. We are working with law enforcement and 
building technical systems to identify and report this harm 
before it--
    Mrs. Wagner. Well, you are not working hard enough, sir, 
and end-to-end encryption is not going to help the reporting 
process.
    I am over my time. I have many more questions for you that 
I will submit for the record, but we are going to talk about 
this.
    And I yield back. Thank you.
    Chairwoman Waters. The gentlewoman from New York, Ms. 
Velazquez, is recognized for 5 minutes.
    Ms. Velazquez. Thank you, Madam Chairwoman.
    Mr. Zuckerberg, Calibra has pledged it will not share 
account information or financial data with Facebook or any 
third party without customer consent. However, Facebook has had 
a history of problems safeguarding users' data. In July, 
Facebook was forced to pay a $5 billion fine to the FTC, by far 
the largest penalty ever imposed to a company for violating 
consumers' privacy rights, as part of a settlement related to 
the 2018 Cambridge Analytica scandal.
    So let me start off by asking you a very simple question. 
Why should we believe what you and Calibra are saying about 
protecting customer privacy and financial data?
    Mr. Zuckerberg. Congresswoman, I think that this is an 
important question for us in all of the new services that we 
build. We certainly have work to do to build trust. I think 
that the settlement and order that we entered into with the FTC 
will help us set a new standard for our industry in terms of 
the rigor for the privacy program that we are building.
    We are now basically building out a privacy program for 
people's data that is parallel to what the Sarbanes-Oxley 
requirements would be for a public company on people's 
financial data. In terms of audits internally, any manager who 
is overseeing a team that handles people's data has to certify 
quarterly that they are meeting their commitments, and that 
goes all the way up to me, and I will have to certify that on--
    Ms. Velazquez. Thank you for your answer.
    It has been publicly reported that when you acquired 
WhatsApp, Facebook officials coached the company's founder to 
tell European Union regulators that it will be, ``really 
difficult,'' to merge or blend data between Facebook and 
WhatsApp, and that there was no desire to integrate the two 
systems. Mr. Zuckerberg, 18 months later, the platforms were 
linked. The European Union fined Facebook for providing 
incorrect or misleading information.
    So let me ask you, do you understand why this record makes 
us concerned with Facebook entering the cryptocurrency space? 
Do you realize that you and Facebook have a credibility issue 
here?
    Mr. Zuckerberg. Congresswoman, I understand that we have 
work to do to build trust on this. And that means making 
commitments, and even if we learn new things in the future that 
could change our mind on how we should operate, that I think we 
are going to need to make sure that the commitments that we 
make--
    Ms. Velazquez. So have you learned that you should not lie?
    Mr. Zuckerberg. Congresswoman, I would disagree with the 
characterization that I was lying.
    Ms. Velazquez. Well, you went to the European regulators 
and you said that it will not be linked, that it will be 
impossible, and yet, 18 months later, it happened. And you were 
fined for that. So, let us continue. I hope that you learned 
something about that, about not lying.
    Facebook's internal motto was for a long time, ``Move fast 
and break things.'' Mr. Zuckerberg, we do not want to break the 
international monetary system. Last week, the G-7 released a 
report stating that global stablecoins could have significant 
adverse effects both domestically and internationally on the 
transmission of monetary policy, as well as financial 
stability.
    Given the G-7's concern and the concerns voiced by us here 
today, would you commit to a moratorium on launching Libra 
until Congress can develop--not the regulators--you said before 
that you will not move until all the regulators sign into and 
support for you to move forward.
    Congress, the people's house, needs to have the opportunity 
to work on a legal framework so that we can provide the 
guidance to the regulators. Would you commit to that, yes or 
no?
    Mr. Zuckerberg. Congresswoman, my understanding is that 
Congress exercises significant oversight over the regulators 
through these committees. So that would seem to me like the 
appropriate way for that to happen.
    Ms. Velazquez. So, that is a ``no.'' Thank you.
    Chairwoman Waters. The gentleman from Oklahoma, Mr. Lucas, 
is recognized for 5 minutes.
    Mr. Lucas. Thank you, Madam Chairwoman.
    Mr. Zuckerberg, the problem of addressing underbanked and 
unbanked individuals is both real and important, and I know the 
Libra project is intended to reach this population. However, a 
significant portion of the underbanked simply do not trust 
banks. I suspect they may not trust captains of industry or 
Members of Congress either, for that matter.
    Do you see this as being a major hurdle in the wide 
adoption of Libra? How do you persuade those people that you 
are trustworthy and to use the system?
    Mr. Zuckerberg. Congressman, we have certainly had a lot of 
issues over the last few years, but I think it is worth 
remembering that every day billions of people come to our 
services because they trust that they can share content--
messages, photos, comments--with the people they care about, 
and more than 100 billion times a day, people do that. They 
share something with a set of people because they know that 
that content is just going to reach the people that they want 
it to.
    So I think that if we are able to move forward with this 
project, there may be some people who don't want to use it 
because they don't trust us or don't like us, and that is one 
of the values of having an independent association where there 
will be other competitor wallets and other approaches, too. But 
I think that this is an area where being able to put ideas out 
into the world and letting the market work and letting people 
choose for themselves what they trust and what services they 
want to use is probably the right approach.
    Mr. Lucas. I would just suggest that it will take a lot of 
energy and effort to reach that group, the underbanked, the 
unbanked. And it is real, and it is growing more substantially.
    But let us shift focus for just a moment. I also serve, 
along with Congressman Posey, on the Science, Space, and 
Technology Committee, and those of us who have worked on that 
committee know, as all of us do, that digital images can be 
altered to make it nearly impossible to distinguish between 
what is real and what is not.
    Facebook recently launched the Deepfake Detection Challenge 
in collaboration with Microsoft and others to address this 
problem. Now, this seems like a step in the right direction on 
behalf of the technology companies involved. From your 
perspective, how great a threat is the deceptive use of 
deepfake technology, and in what ways do you anticipate that 
the detection challenge will be successful?
    Mr. Zuckerberg. Thank you, Congressman.
    I think deepfakes are clearly one of the emerging threats 
that we need to get in front of and develop policy around to 
address. We are currently working on what the policy should be 
to differentiate between media that has been manipulated by AI 
tools like deepfakes with the intent to mislead people and 
compare that to just normal content that might have been--an 
interview that might have just been cut differently, and 
someone might not like the way that it is cut, but it is not a 
deepfake and is not kind of misleading, manipulated content in 
that way.
    So, we are working on that policy. I think that this is a 
very important area. The Deepfake Challenge to technically 
figure out how to identify these things will certainly help 
inform the policy, and this is one of the areas that I do think 
is quite important going forward.
    Mr. Lucas. One final question. Many experts have suggested 
that we need to educate the public on how to consume trusted 
information. Facebook recently announced an initiative to 
support projects on media literacy. Would you elaborate on 
these projects and what you see as Facebook's role, given your 
critical position within the industry?
    Mr. Zuckerberg. Yes, Congressman. This question may be 
premature to ask, although later in this week, we actually have 
a big announcement coming up on launching a big initiative 
around news and journalism, where we are partnering with a lot 
of folks to build a new product that is supporting high-quality 
journalism.
    I think if there is an opportunity within Facebook and our 
services to build a dedicated surface--a tab within the apps, 
for example--where people who really want to see high-quality, 
curated news, not just social content, but from high-quality 
publishers, can go and consume that content, and that could 
create a place where we can form new business partnerships to 
help fund high-quality journalism as well.
    I am looking forward to discussing that at more length in 
the coming days.
    Mr. Lucas. I yield back the balance of my time, Madam 
Chairwoman.
    Chairwoman Waters. Thank you. The gentleman from New York, 
Mr. Meeks, who is also the Chair of our Subcommittee on 
Consumer Protection and Financial Institutions, is recognized 
for 5 minutes.
    Mr. Meeks. Thank you, Madam Chairwoman.
    Mr. Zuckerberg, you came in, and your opening statement 
sounded great. I think that your advisers advised you as to 
what we wanted to hear on interests that you think that Members 
of Congress on various sides wanted. But words are different 
than actions, sir.
    One of the first things that I heard you saying when you 
were testifying was that you were interested in the unbanked 
and the underbanked. As the chairwoman said, I chair the 
Consumer Protection and Financial Institutions Subcommittee, 
and had a hearing yesterday dealing with what we call minority 
depository institutions (MDIs).
    Facebook is a multibillion, trillion dollar company. You 
are concerned about the underbanked and unbanked. How much of 
Facebook's money is in MDIs that would provide services and 
help the unbanked and the underbanked? Have you invested in any 
of the minority development depository institutions in America 
or anyplace else in the world? Is any of your money sitting in 
those banks?
    Mr. Zuckerberg. Congressman, I am not sure of the answer to 
that question. But what I do know is a lot of the people that 
we serve around the world are underbanked, and this is beyond 
the U.S. as well.
    Mr. Meeks. I understand it is beyond the U.S., but we are 
here right now. And you have just indicated that you want to 
work and you would not move anyplace else unless you were in 
compliance with the U.S. regulators, et cetera. And what I am 
saying is that, for example, I don't even know when you talk 
about internationally, going after the unbanked and 
underbanked, whether or not you intend to have Calibra and your 
digital wallet registered in each of those countries so that 
there would be regulatory oversight.
    Because what we have found is a lot of individuals--we have 
payday lenders who say they are interested in the underbanked, 
that they are interested in those who are not banked. And those 
individuals who are supposed to be helped, pay more than 
anybody else.
    We have institutions here, minority depository 
institutions, and if you want to show that you are doing the 
right thing, then with all of the money that you have, you can 
do it here in the United States and other places also. So that 
is an answer that you should know, and I would urge you to go 
back and find out. And I would almost guess that there are zero 
dollars there.
    You should thereby look at your policy and change it 
because action speaks much louder than words, and you do have a 
trust factor. I met with a lot of your investors who are 
pulling out of Libra. Let us just look at the news because the 
other thing that is most important to me is our democracy and 
democracies around the world.
    When you look at around the world, it seems to me that 
Facebook was an accelerant in many of the destructive politics 
of today. For example, in 2016, Russia interfered with the U.S. 
elections. You have admitted that you were caught on your 
heels. The question is, what has been and what will be done for 
2020?
    Brexit, another big issue around the world, misinformation 
and divisions, attempts at division and misinformation across 
North America and Europe. Facebook has been systemically found 
at the scene of the crime. Do you think that is just a 
coincidence, sir?
    Mr. Zuckerberg. Congressman, we operate in almost every 
country in the world except for China and North Korea. So I 
think we would be in almost every country where different 
activities are happening.
    One thing that you mentioned before that I agree with is 
there are a lot of predatory financial organizations. We ban 
payday lenders and a lot of folks like that from using our 
platform for ads as well, and we ncertainly are not interested 
in people like that.
    Mr. Meeks. But what I am talking about is not only banning. 
You have the wherewithal, because if these MDIs had the money, 
then they would be able to put out the product, because these 
folks need access to capital and financial institutions.
    I am out of time.
    Chairwoman Waters. Thank you. The gentleman from Florida, 
Mr. Posey, is recognized for 5 minutes.
    Mr. Posey. Thank you, Madam Chairwoman, and Ranking Member 
McHenry, for holding for this very informative hearing.
    Now for many of us, Facebook is a reality in our business 
and our personal lives. I communicate with my constituents as 
well as my friends through the platform daily. Many benefits 
accrue from the service, yet in the midst of these great 
benefits, great challenges have emerged, and I want to welcome 
you to this hearing, Mr. Zuckerberg.
    I believe Facebook is a great innovation that has much 
potential for good, that we welcomed an innovation together 
with the controversies that it spawned. Unfortunately, some in 
politics and the media see their role as cajoling Facebook to 
censor its users' speech.
    In April, I wrote you that I was disappointed that Facebook 
would consider restricting free speech rights that communicate 
the risks associated with vaccinations. Now, I support 
vaccinations of children and adults, but I also support open 
and frank communication of the risks of vaccination. Every 
person should make vaccination decisions with full information.
    In recognition of the uncertainties, the risk of 
vaccinations, the Federal Government has created a vaccination 
trust fund that has paid out over $4 billion to compensate 
those who have been injured by vaccinations. There is no more 
clear or persuasive statement about the risk associated with 
vaccinations than the existence and the payment record of that 
fund.
    From time to time, medical research has established case 
and context of specific risk associated with vaccinations. I 
wrote to you when another Member of the House made claims that 
the risk of vaccinations should not exist and that Facebook 
should police communications related to the vaccination risk.
    Today, you testified that you believe in giving people a 
voice, and Mr. Zuckerberg, is Facebook able to assure us that 
it will support users' fair and open discussions and 
communications related to the risk as well as the benefits of 
vaccinations?
    Mr. Zuckerberg. Congressman, thanks for the question.
    We do care deeply about giving people a voice and freedom 
of expression. Those are some of the founding values of the 
company. At the same time, we also hear consistently from our 
community that people want us to stop the spread of 
misinformation.
    So what we do is we try to focus on misinformation that has 
the potential to lead to physical harm or imminent harm, and 
that can include especially misleading health advice. There was 
a hoax that was going viral a number of months back that was 
saying--
    Mr. Posey. Let us kind of stick to this subject because our 
time is very limited. Are you 100 percent confident that 
vaccines pose no injury to any person on this planet?
    Mr. Zuckerberg. Congressman, I don't think it would be 
possible for anyone to be 100 percent confident. But my 
understanding of the scientific consensus is that it is 
important that people get their vaccines.
    Mr. Posey. But you have said, your platform, you believe in 
giving people a voice. Shouldn't somebody have the opportunity 
to express an opinion different from yours? Over $4 billion has 
been paid out by the fund for thousands of people. Don't you 
think people should be able to have the information to make an 
informed choice?
    Mr. Zuckerberg. Congressman, I do, and that is why we don't 
stop people from posting on their page something that is wrong. 
If someone wants to post anti-vaccination content, or if they 
want to join a group where people are discussing that content, 
we don't prevent them from doing that. But what we do is we 
don't go out of our way to make sure that our group 
recommendation systems try to show people or encourage people 
to join those groups. We discourage that.
    Mr. Posey. Okay. How do you discourage it?
    Mr. Zuckerberg. There are a number of different tactics. 
For example, if someone is typing into the search results, into 
the search box something that might lead to anti-vax content, 
we don't recommend anti-vax searches to them.
    If you type in the name of a group exactly, you can get the 
group. We are not going to hide it. We are not going to prevent 
you from joining it. But we are not going to recommend or go 
out of our way to show people content that would encourage 
people to join those groups. But people can share that content 
to whom they want.
    Mr. Posey. Many of the people harmed by this policy are, in 
fact, parents with disabled children, and I don't think we or 
you should be so quick to turn our backs on them. If you look 
at the statistics, I think you are making a bad mistake.
    My time has expired. I yield back. Thank you.
    Chairwoman Waters. Thank you very much.
    The next gentleman from California is Mr. Sherman, and 
today is his birthday. Happy Birthday, Mr. Sherman. You are 
recognized for 5 minutes.
    Mr. Sherman. Thank you.
    Chairwoman Waters. You don't get any more time just because 
it is your birthday.
    [laughter]
    Mr. Sherman. Donald Trump said crypto assets can facilitate 
unlawful behavior, including the drug trade. I ask unanimous 
consent to put in the record a report by RAND talking about 
cryptocurrency's use by terrorists, hopefully without 
objection.
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Sherman. I am not here to be anti-Facebook. I was anti-
cryptocurrency back when you were anti-cryptocurrency. 
Cryptcocurrency either doesn't work, in which case investors 
lose a lot of money, or it does achieve its objectives perhaps 
and displaces the U.S. dollar, or interferes with the U.S. 
dollar being the sole reserve currency, or virtually the sole 
reserve currency in the world.
    That role of the U.S. dollar saves the average American 
family $1,000 in interest costs, because money pours into the 
United States because of the role of the dollar. The Federal 
Reserve can turn over up to $100 billion in profits to the U.S. 
Treasury that we, in Congress, spend because of the power of 
the U.S. dollar.
    The U.S. dollar is an excellent currency as a means of 
account. It serves all the needs, except it is really bad for 
tax evaders, drug dealers, and terrorists, and that unmet need 
can be met by a new currency. If we make drug dealers just 10 
percent more effective, how many American deaths is that over 
the next decade? Does it compare to the deaths we experience 
from terrorism? We will have to see.
    But those who are introducing cryptocurrency have to pause 
and wonder what effect they will have on the power of the 
United States to impose sanctions. Right now, Turkey is 
stopping at 20 miles into Syria, not because of U.S. troops--we 
are out--but because of U.S. sanctions because of the role of 
the U.S. dollar. We stand to lose all that, because 
cryptocurrency is the currency of the crypto patriot.
    Ms. Velazquez pointed out that you are going to wait for 
regulators to sign off. Regulators are working with old 
statutes. Your lawyers are going to show that there is a 
loophole in the 1940 Investment Company Act that gets you where 
you want to go, and the regulators can't stop you, and you are 
going to call that regulatory approval, as if the people in 
1940 knew what you had in mind.
    What you have made clear is that you will go forward unless 
Donald Trump's appointed regulators stop you, and you will go 
forward if you can just find loopholes in statutes, but you 
will deploy a horde of lobbyists to prevent us from writing a 
new statute.
    Mrs. Maloney asked you a question that you forgot, and you 
still forgot to answer it, but let's be clear. You are going to 
be making powerful burglary tools and letting your business 
partners commit the burglary. You are going to, with all the 
power of Facebook, try to create a new currency. You are going 
to call it the Libra, but you are the person behind it. That is 
why I call it the ``Zuck Buck.'' You are going to create it and 
then say, ``Oh, it is our business partners.'' Your White Paper 
says your business partners are going to use your tool to have 
anonymous accounts, and then you have the gall to come here and 
say you are going to follow all the Know Your Customer 
regulations. How do you know your customer with an anonymous 
account?
    Then, Mr. Meeks calls your bluff on this idea that you are 
going to create a payment system for the poor and unbanked. The 
poor and unbanked need pesos. They need dollars so that they 
can buy something at a local store. You have made no effort to 
help the unbanked anywhere else, at any other time. And you 
should. You should create a payment system with a close to zero 
fee. But the real money is in the tax evaders, and to some 
extent, the drug dealers.
    I know you have at least 100 lawyers who will tell you that 
what you are doing is legal and that you will be safe, but 
given the harm that this can do, they could be very wrong. And 
if this explodes the way it might, you will not be able to hide 
behind the idea that you didn't create the Libra organization, 
that it is just your business partners that have wallets 
designed for drug dealers and terrorists.
    I have a few more things to say, but for the richest man in 
the world to come here and hide behind the poorest people in 
the world, and say that is who you are really trying to help, 
you are trying to help those for whom the dollar is not a good 
currency--drug dealers, terrorists, and tax evaders.
    Chairwoman Waters. Thank you. The gentleman from Missouri, 
Mr. Luetkemeyer, is recognized for 5 minutes.
    Mr. Luetkemeyer. Thank you, Madam Chairwoman, and welcome, 
Mr. Zuckerberg. I certain admire you as an innovator and as an 
entrepreneur. You have taken advantage of the economic freedom 
of this country and I admire that. I think that is fantastic. 
But you are trying to get into a different world here with your 
Libra experience.
    In the past, you have been dealing with communication 
systems where people have been able to exchange everything from 
retail information to personal information, and it was kind of 
buyer-beware in the retail world. In the financial world, 
people transact business because they can trust that the 
transactions are going to be secure, from the standpoint of the 
stability of the dollar or whatever they are exchanging their 
money in, the secrecy of the activity, there are consumer 
protections as well as not being able to do things in an 
illegal fashion.
    That takes a lot of regulation, and as you are finding out, 
regulation is an important part of the financial services 
world, to be able to give people those kinds of protections and 
earn that trust.
    You have indicated already that you want to conform to the 
regulation, to be able to do this and earn that trust. My first 
question is, can you continue to innovate and be able to make 
the changes to this product as it needs to be, to be able to 
conform to the regulation and still be able to make this work? 
Do you believe that can happen?
    Mr. Zuckerberg. Congressman, I currently do. I think we 
will have to see how this process plays out. But I do, sitting 
here today.
    Mr. Luetkemeyer. Are you willing to stop this project if 
you see that it can't go forward anymore?
    Mr. Zuckerberg. Congressman, I will certainly stop 
Facebook's part of it. The independent Libra Association is a 
separate thing that exists at this point, and if I feel like 
Facebook can't be a part of it, in keeping with the principles 
that I have laid out, then Facebook won't be a part of it.
    Mr. Luetkemeyer. On a follow-up on Mr. Sherman's line of 
questioning with regard to the reserve currency, what effect do 
you think, if you get Libra implemented here, that would have 
on the reserve status of the U.S. dollar?
    Mr. Zuckerberg. Congressman, because the reserve will be 
primarily U.S. dollars, I actually think that a project like 
this could be important for extending America's financial 
leadership, to the contrary of the risks that are being pointed 
out.
    We have to be careful about all of the risks around 
financial stability, and there are certain regulators who 
oversee that, and we are also mindful of that. We want to do 
something that strengthens America's leadership. But I just 
think that we can't sit here and assume that because America is 
today the leader, that it will always get to be the leader if 
we don't innovate, and innovation means doing new things. New 
things have risks, and we need to address the risks, and we 
need to be careful in doing that. I personally worry that if we 
don't do things like this, whether it is this project or others 
like this, then eventually, we will lose our leadership.
    Mr. Luetkemeyer. I appreciate the fact that you are 
pointing out that China is already doing this. That means if we 
are going to allow them to play in this area, we need to be 
looking at it as well. I think right now Calibra says that, 
what, 50 percent of the currencies that are in the basket here 
that they use to set the value of this is the dollar, is that 
correct?
    Mr. Zuckerberg. Congressman, I don't know if that has been 
fully finalized, but I think the principle is that it will be 
primarily those dollars.
    Mr. Luetkemeyer. My concern, though, is that right now that 
is good for the United States, but what happens whenever the 
board of Calibra decides that the Chinese yuan suddenly is, 
because of the economy, looks to be a very stable currency and 
a growing currency and importance in the world. And suddenly 
they diminish our amount down to one-third of the value of the 
basket of currencies, and now the yuan is one-third.
    Then, we have a real big problem from the standpoint that 
the currency that is being utilized most around the world is 
the Libra, and we are only one-third of that. That, to me, is 
concerning. Does that concern you at all, that the association 
could set this and we would have nothing to do about it, and it 
would have a negative effect on our position?
    Mr. Zuckerberg. Congressman, that is certainly something 
that I think we should look at up front. I can't speak for the 
independent association on this, but I think it would be 
completely reasonable for our regulators to try to impose a 
restriction that it has to be primarily U.S. dollars.
    Mr. Luetkemeyer. Okay. One more quick question, and I don't 
know if the chairwoman will give me enough time for you to 
answer this, but what is the advantage of Facebook to be 
involved in Libra?
    Mr. Zuckerberg. Sorry. What is the advantage of having 
Facebook be involved?
    Mr. Luetkemeyer. What is the advantage of your company, 
Facebook, to be involved in Libra? What is the end game for you 
to be able to realize a benefit from this?
    Mr. Zuckerberg. Congressman, we build some of the most 
widely used messaging services around the world, WhatsApp and 
Facebook Messenger, and the vision here is to make it so that 
people can send money to each other as easily and securely and 
cheaply as it is to send a text message. So I think that 
sending money would be a very useful utility to add for people 
around the world, in addition to the messaging products that we 
have.
    Mr. Luetkemeyer. Thank you very much.
    Chairwoman Waters. The gentleman from Missouri, Mr. Clay, 
who is also the Chair of our Subcommittee on Housing, Community 
Development, and Insurance, is recognized for 5 minutes.
    Mr. Clay. Thank you, Madam Chairwoman. Mr. Zuckerberg, the 
Housing Rights Initiative, a D.C.-based watchdog group, and an 
aggrieved D.C. woman, have recently filed human rights 
complaints in D.C. and Maryland against seven major housing 
companies who are accused of using Facebook's ad targeting 
tools to deny prospective tenants the ability to see housing 
ads based on their age, which is a protected class under local 
fair housing laws. The lawsuit also alleges that Facebook's 
algorithm disproportionately showed the ads to younger users.
    Mr. Zuckerberg, do you agree to comply with any potential 
subpoenas and document requests Facebook might receive seeking 
information about how housing companies have discriminated?
    Mr. Zuckerberg. Congressman, I imagine that if it is a 
valid subpoena, we will certainly comply with it; our legal 
team will.
    Mr. Clay. Will Facebook agree to produce information about 
the algorithm it uses to decide which ads users receive?
    Mr. Zuckerberg. Congressman, for a bit of background here, 
it has always been against our policies for people to use any 
of our products, and especially our ad products, to 
discriminate. We recently, as you know, entered into a 
settlement with the ACLU and other civil rights groups to 
remove certain targeting features from advertising, so that way 
if you are doing targeting for housing, employment, or credit 
opportunities, you can't target based on age or gender or ZIP 
Code. And we also limited the number of interest-based 
targeting options that were available there as well.
    Mr. Clay. Yes, but for so many years, your company engaged 
in that kind of conduct. Was that because it was a lack of 
awareness, as far as your employees are concerned, of any 
sensitivity to inclusion, diversity, and nondiscrimination?
    Mr. Zuckerberg. Congressman, it has always been against our 
policies for anyone to use the ad systems to discriminate, and 
we enforce those policies through a mix of technical systems 
and human review. When this complaint was filed by the ACLU and 
others, we were able to reach a settlement that we thought 
would strengthen our policies and our products and help them 
uphold the principles that we care about and have always been 
committed to on this.
    Part of this is also agreeing to study further the effects 
of how the algorithm works and what it shows. One of the 
challenges that we have here, that I think is worth calling 
out, is that we don't collect data on the race or ethnicity of 
people who use Facebook. So that is somewhat of a challenge in 
trying to study whether there are disparate impacts or issues. 
And it is an open question, from my perspective, whether one 
would want us to collect race data on the people who use our 
services, but that is one of the questions we will need to 
figure out as we are studying this further.
    Mr. Clay. And let me follow up with that and ask you why, 
despite Facebook's commitments to address civil rights, there 
is no one in Facebook's senior leadership with substantial 
civil rights experience?
    Mr. Zuckerberg. Congressman, this is certainly something we 
care about a lot. We have people at the company who have worked 
on civil rights. Recently, we started this civil rights audit 
that is being led by very established folks in the civil rights 
movement, and Sheryl Sandberg, our COO, is personally leading a 
civil rights task force that we formalized inside the company 
to make sure that we implement suggestions from the audit and 
to make sure that this receives senior attention at the 
company.
    Mr. Clay. Is the audit independent? Is it independent or is 
it from within the company?
    Mr. Zuckerberg. Congressman, yes, the audit is independent. 
It is being done by Laura Murphy, whom I think is an 
established leader in this space.
    Mr. Clay. I am familiar with Laura Murphy. Are they allowed 
to publicly report whatever problems they find?
    Mr. Zuckerberg. Congressman, yes. The reports that they are 
making as part of the audit will be public, and I think they 
have already also published some things.
    Mr. Clay. Do you have a right to limit what is said 
publicly about the audit?
    Mr. Zuckerberg. Congressman, I am not sure the answer to 
that. I think at a high level the answer would be no, but there 
may be some specific things around if there is individuals' 
private data or business confidential data or something like 
that, where they might not publish it. But broadly speaking, 
they are going to be able to publish what they believe and what 
they find.
    Mr. Clay. Thank you so much. I yield back.
    Chairwoman Waters. The gentleman from Michigan, Mr. 
Huizenga, is recognized for 5 minutes.
    Mr. Huizenga. Thank you, Madam Chairwoman. Mr. Zuckerberg, 
you have accomplished something that nobody, and I mean nobody, 
thought was possible. Brad Sherman, Chairwoman Waters, and many 
on the other side of the aisle actually agree with and, in 
fact, use tweets by the President to support their position. I 
never thought I would see the day, but here we are.
    You have taken the puzzle pieces of politics, shaken up the 
box, thrown them out on the table, and everybody is trying to 
figure out where they fit when it comes to Facebook, and when 
it comes to this technology use. I don't fault you for what 
your tool has become, because I do believe it is a tool.
    I want to explore that a little bit, but first my question 
is, what share of Libra is Facebook? It is an association that 
you have referenced. Do you own half of it? Is it equal shares 
among all the partners? David Marcus, who had been at Facebook, 
is now heading up Calibra. Is it one and the same? Is Calibra 
Facebook?
    Mr. Zuckerberg. Okay, Congressman, there are two 
organizations here. There is the independent Libra 
Association--
    Mr. Huizenga. Yes, that is what I want to know.
    Mr. Zuckerberg. --which is a nonprofit. So, it is not a 
for-profit entity--
    Mr. Huizenga. Yes.
    Mr. Zuckerberg. --that there is ownership.
    Mr. Huizenga. Here is what I am trying to get at. How does 
the voting go? Is it what David Marcus says, is it what 
Facebook says, or is it that you can be overruled by others in 
the association?
    Mr. Zuckerberg. That is correct. Right now, there are 21 
companies and nonprofits. There are a lot more that want to 
join. Each company and nonprofit organization that is a member 
has one vote in electing the board. Right now, there are five 
board members. David Marcus is one of the board members, but he 
is not running Calibra.
    Mr. Huizenga. Well, he has been here. In fact, he sat where 
you are sitting.
    Mr. Zuckerberg. Sorry. I just misspoke. He is not running 
Libra. He is running Calibra, which is Facebook's payment 
subsidiary. But we are looking for--the Libra Association is 
recruiting an independent director, and David is not even on 
the search committee for that.
    Mr. Huizenga. Okay. I asked him the question, because it 
had been forwarded that Switzerland was where you were going to 
domicile this, or the association was going to domicile it. He 
said that he had been talking to the Swiss regulators. The 
Swiss regulators said that he had not been talking to them and 
that the association hadn't been talking to them. So, I would 
like you to clarify that. Have you been talking to the Swiss 
regulators?
    Mr. Zuckerberg. Congressman, yes, and the misunderstanding 
there was that I believe that he and the team had been working 
with the primary Swiss financial regulator, FINMA, and now we 
are also working with the data regulator which is going to be 
relevant to this project.
    Mr. Huizenga. You said that you have worked with 30 
different jurisdictions in examining this. Can you provide us 
with a list of the regulators that you have talked to?
    Mr. Zuckerberg. Congressman, I can get back to you with the 
full list if that would be helpful.
    Mr. Huizenga. Okay. That would be great. That is all I want 
to--it is not a trick question. I just want to know that. I 
would also like to know which U.S. regulators you have been 
talking to.
    Mr. Zuckerberg. Congressman, are you asking about me 
personally or our team?
    Mr. Huizenga. Well, you used the royal ``we'' on page three 
of your testimony. I am assuming it is not you specifically. I 
am assuming it is you and your team. But I want to know who 
Facebook and Calibra and Libra have all been talking to in the 
U.S., because I think one of the questions that I have is why 
Switzerland, why not the U.S., a little bit about, as the 
ranking member had started to go down. And I want to move 
quickly on that, but will you get me a list of those U.S. 
regulators?
    Mr. Zuckerberg. Yes.
    Mr. Huizenga. Okay. Great. Thank you.
    Here is the real crux. You said that you won't launch 
without U.S. regulator approval. What happens if the 
association decides to launch despite that?
    Mr. Zuckerberg. Congressman, then I believe we would be 
forced to leave the association. I would hope that the 
association will weigh our recommendation and what we say 
publicly that we think should happen, but if, at the end of the 
day, we don't receive the clearances that we feel like we need 
to move forward, and the association chooses to move forward 
without us, then we will be in a position where we will not be 
a part of the association.
    Mr. Huizenga. In my remaining 30 seconds here, as I said, I 
believe Facebook is a tool. I believe cryptocurrency and Libra 
is a tool. I believe all technology is a tool. It is a neutral 
tool, just like a car or a plane, a gun, a knife, all of which 
have been used as weapons, for nefarious things at times, and 
all things that have been used to benefit. These various tools 
are in society, though, regulated, and whether it is Mrs. 
Wagner's concern, and all of our concern about child sexual 
exploitation or others, you need to help us understand where 
the line between people's First Amendment rights--yours, mine, 
all of society's--lie, and the safety of our society, 
regardless of the platform or tool. So, I would like to 
continue that conversation at some point.
    Chairwoman Waters. The gentleman from Georgia, Mr. Scott, 
is recognized for 5 minutes.
    Mr. Scott. Mr. Zuckerberg, thank you for joining us today. 
Back during the 1960s and 1970s, Congress passed a series of 
laws intended to stamp out discrimination in lending and 
housing, and both Republicans and Democrats in Congress worked 
together and passed legislation like the Community Reinvestment 
Act, the Fair Housing Act, and the Equal Credit Opportunity 
Act.
    All of these laws were designed to target and stop 
discrimination in the sale and advertising of housing, and in, 
particular, redlining. Redlining is a series of practices, of 
cordoning off certain groups of people by race, by geographic 
area, and systematically refusing to lend to those communities. 
And we are suffering, right now, from the aftershock of these 
practices.
    Now it is my understanding, Mr. Zuckerberg, that Facebook 
allows advertisers to target their messages to certain users, 
to groups of users, both directly, by identifying their race, 
their gender, or age, but also by indirectly targeting their 
education, their interests, their location, and their income. 
And in its investigation, HUD, our Federal housing agency, 
found that your platform allowed advertisers to restrict 
certain users from viewing ads on your platform. And you have 
even enabled the practice of this dreaded redlining of certain 
communities, restricting them from housing and employment 
opportunities.
    You were charged with this by our Federal agency that 
protects our housing and lending laws. Mr. Zuckerberg, we in 
Congress have worked hard, for the past 50 years, to eliminate 
the very racial discrimination practices that your platform is 
guilty of.
    On your platform you screen for and you prevent also 
criminal activities such as sex trafficking, drug trafficking, 
even as you mentioned a few minutes ago, you outlaw payday 
lending, terrorism, illegal drugs. Why don't you prevent 
redlining, which is also illegal and criminal as well?
    Mr. Zuckerberg. Congressman, we do now. Our policies have 
always been that discrimination is not allowed. We recently 
entered into a settlement with civil rights groups, the ACLU 
and others, and FHA, to remove certain categories from our 
targeting, including age, gender, and ZIP Code.
    Mr. Scott. You say, ``to remove.''
    Mr. Zuckerberg. It is implemented.
    Mr. Scott. You haven't said, ``we have removed.'' There is 
a difference.
    Mr. Zuckerberg. My understanding is that this is already 
implemented. If I am incorrect on that, I will get back to you 
quickly and update you. But my understanding is that is already 
in effect.
    Mr. Scott. But Mr. Zuckerman, I have here HUD's report, and 
it clearly says that your platform allows advertisers to 
restrict certain users from viewing ads on your platform, and 
you have even enabled the practice of redlining certain 
communities. What is your answer? What was your response to 
HUD? Have you put things in practice to eliminate this?
    Mr. Zuckerberg. Congressman, I think at the beginning of 
the discussion with HUD and some of these groups that I just 
referenced, we entered into a settlement with the civil rights 
groups to create a new standard where we block that kind of 
targeting. And I think it is worth noting that the standard 
that we set is industry-leading. I don't think any of the other 
internet platforms restrict the kind of targeting that we do 
for these categories. But I think that doing so helps us uphold 
the principles around preventing discrimination. So I am happy 
and supportive of that, and glad that we are doing that.
    Mr. Scott. Thank you, Mr. Zuckerberg.
    Chairwoman Waters. The gentleman from Ohio, Mr. Stivers, is 
recognized for 5 minutes.
    Mr. Stivers. Thank you, Madam Chairwoman. I appreciate you 
holding this hearing. Mr. Zuckerberg, good morning. How are 
you?
    Mr. Zuckerberg. I am doing okay.
    Mr. Stivers. I understand.
    [laughter]
    Mr. Stivers. That was honest. Thank you.
    First, I want to say I appreciate innovation, and we need 
innovation in America. No innovation is going to be perfect, 
and to the questions that the gentleman was just asking, I want 
to let you maybe clarify a little bit. If I want to advertise 
housing on Facebook today, can I use age, sex, and ZIP Code to 
target people today, as we sit here?
    Mr. Zuckerberg. Congress, I believe the answer to that is 
no.
    Mr. Stivers. Thank you.
    Mr. Zuckerberg. Am I right on this? All right. I just 
confirmed with my team as well, that that is fully implemented.
    Mr. Stivers. So you cannot do that today?
    Mr. Zuckerberg. Yes. Those options are no longer in the 
system for housing, employment, or credit opportunities 
advertising.
    Mr. Stivers. Nobody wants to redline, and I am sure that 
was accidental.
    But I want to talk about Calibra a little bit, because I am 
concerned about the establishment of a private currency which 
is used for transactions, because I think it does undermine 
other currencies in the world. There are 195 countries, 2 of 
them are sovereign countries, 2 don't have currencies, so 193 
countries that you are opening yourselves up to regulation 
from. Why not just pick another currency?
    Facebook is going to make money through the transmission of 
whatever it is. It is not about what currency. Why did you 
think you had to create a private currency? And I guess I would 
ask you to maybe go back to your folks and think about whether 
the pain you are going to have in creating a private currency 
is worth it. But why create a private currency? Why not just 
pick a currency and use that as part of your payment system?
    Mr. Zuckerberg. Sure. Thanks, Congressman. The goal of 
Libra is to build a global payment system rather than a 
currency. Because it is global in nature, we figured that it 
might be better to not solely rely on one country's currency. 
But because we are an American company, and because the 
American economy is the strongest in the world, it makes sense 
for any reserve to be primarily U.S. dollars and extend 
America's financial leadership in that way.
    But like you are saying, we clearly have not locked down 
exactly how this is going to work yet. I personally am much 
more focused on being able to help innovate and build a global 
payment system than I am in any specific makeup of what a 
currency or reserve might look like. And I think that there is 
already some discussion about whether it might make sense to 
build the kind of digital payment system that we are talking 
about, based on individual sovereign currencies rather than a 
kind of combination of these currencies into some new one.
    So, that is something that is already being considered.
    Mr. Stivers. Great. And I think you will find that the Bank 
Secrecy Act, anti-money-laundering, all of those things are 
going to be really hard with the digital currency. And 
ultimately, you may find a sovereign country that creates a 
digital currency that you could then use, or you could do it 
based on several stable currencies around the world. If you are 
in Europe you can pick one, and in the Americas, you can pick 
one, or whatever.
    But there are a lot of people around the world who need 
what you are talking about, this cross-border opportunity to 
efficiently send money back and forth in countries where there 
is no stable currency. Think about Venezuela, for a second. The 
Venezuela bolivar is worth nothing, and it is worth less now 
than it was just a second ago.
    There are countries where there is no stable currency, and 
there are millions of people in the world who are hoping that 
your innovation works. But I think you may have bitten off more 
than you can chew by trying to create a private currency.
    I would ask you--and I know you are already relooking at 
it, but I hope you will think about that, because you can make 
a difference, and, frankly, you can have a payment system 
without creating that private currency, and I think that you 
will find that the compliance with the individuals laws, 
whether it is anti-money-laundering, Bank Secrecy Act, 
sanctions, all of those things will be easier to do if you use 
an existing sovereign currency. So I would just ask you to 
think about that. You can comment if you want to, but I wanted 
to use my time to ask you to think about those things.
    Mr. Zuckerberg. Congressman, thank you. I think that those 
discussions, to my understanding, are already happening. Some 
of them are happening publicly. I think that there have been 
some public comments on this. And I just want to reaffirm what 
you are saying about how this could be valuable to people 
around the world. We serve more than two billion people around 
the world. We serve a lot of people in the United States, but 
there aren't two billion people here, so most of the people we 
serve are in countries that have developing economies that I 
think could really benefit from this.
    Mr. Stivers. Thank you. I yield back.
    Chairwoman Waters. The gentleman from Texas, Mr. Green, who 
is also the Chair of our Subcommittee on Oversight and 
Investigations, is recognized for 5 minutes.
    Mr. Green. Thank you, Madam Chairwoman. I thank the ranking 
member as well. And I thank the witness for being here today.
    Sir, is it true that the Libra Association oversees the 
Libra project?
    Mr. Zuckerberg. Congressman, yes.
    Mr. Green. And is it true that global corporations make up 
the association?
    Mr. Zuckerberg. Congressman, the association is made of, to 
date, 21 companies and nonprofit organizations as well.
    Mr. Green. Of the 21, how many are headed by women?
    Mr. Zuckerberg. Congressman, I do not know the answer to 
that, off the top of my head, but I can get it for you.
    Mr. Green. I believe you can get it, Mr. Zuckerberg, but 
one would assume that you would know who heads these 
corporations that are going to be running this global company.
    How many of them are minorities, Mr. Zuckerberg?
    Mr. Zuckerberg. Congressman, I do not know, off the top of 
my head.
    Mr. Green. Are there any members of the LGBTQ+ community 
associated with this association, Mr. Zuckerberg?
    Mr. Zuckerberg. Congressman, I don't know the answer.
    Mr. Green. How many people who acknowledge that they are 
part of a community? You do not know. Mr. Zuckerberg, is it 
true that the overwhelming majority of persons associated with 
this endeavor are white men?
    Mr. Zuckerberg. Congressman, I don't know, off the top of 
my head, the list of the people who are running the 
organizations in the association.
    Mr. Green. Is it true that one would have to have $10 
million, aside from other qualities, to become a part of the 
association?
    Mr. Zuckerberg. Congressman, I believe that was the initial 
idea, but I don't think that that has been locked down yet.
    Mr. Green. Isn't it true that persons have already bought 
into the association and paid $10 million?
    Mr. Zuckerberg. Congressman, I do not believe that has 
happened yet.
    Mr. Green. I spoke to your person who manages Calibra, and 
he indicated that he is one of the holders of a post with the 
association. Is he incorrect?
    Mr. Zuckerberg. Congressman, you are right that David 
Marcus, who runs the Calibra subsidiary for Facebook, is 
Facebook's delegate to this independent association. The 
question I was answering is, I don't know if the organizations 
that are members of the association have yet contributed any 
financial support for the organization.
    Mr. Green. I must say that I would assume that you would 
have the answers, but I would greatly appreciate it if you 
would share them with me, because I plan to share them with the 
public. The public needs to know whether this is an 
organization that is truly diverse or whether it is an 
organization that is owned and operated by a small group of 
persons, all of whom have similar characteristics, for want of 
a better terminology.
    Now, let me share this with you quickly. This does not 
apply to you, Mr. Zuckerberg, but you need to know why there is 
a good deal of consternation.
    There was a man whose name was Bernie Madoff. Mr. Bernie 
Madoff was the Chair of the NASDAQ. He had all of the trappings 
of being a successful, responsible person. He is now serving 
150 years in prison. His Ponzi scheme involved some $64.8 
billion. The people who are for free markets bought into this 
Ponzi scheme. They had a laissez-faire attitude. But once they 
lost their money, they made their way to us, and they wanted us 
to make them whole.
    This is why we have to be concerned, not because you are a 
Bernie Madoff, I want the press to clearly understand that I am 
not saying that you are, but because things can happen. Things 
can go wrong. And when they do, we are the people who have to 
make them right.
    I yield back the balance of my time, Madam Chairwoman. 
Thank you.
    Chairwoman Waters. The gentleman from Kentucky, Mr. Barr, 
is recognized for 5 minutes.
    Mr. Barr. Mr. Zuckerberg, welcome to the Financial Services 
Committee. Criticism is cheap. Anybody can criticize. As you 
can see here today, politicians in Washington are pretty good 
at lobbing criticism. But creating something of value is 
significantly more difficult, and I would commend you for being 
an innovator and trying to create something of value.
    It seems like, in Washington, whenever the private sector 
produces some type of innovation or new advancement, 
politicians and bureaucrats rush in to criticize or regulate 
it. In an era when some politicians in Washington, and even 
some politicians on this committee, are openly embracing 
socialism and central planning, it seems like the presumption 
is always that private-sector innovation is a bad thing.
    I think that presumption should be reversed. We, in 
Congress, should view innovation for its potential 
opportunities of promoting financial inclusion, reducing 
friction in transactions, aiding small business, and bringing 
the financial system to unbanked and underbanked communities. 
That is not to say we shouldn't ask questions, which is, of 
course, what we are doing here today, but in America, a country 
built on free enterprise and capitalism, it is always better to 
be on the side of innovation, and we should always place the 
burden on the government to justify regulation and 
intervention.
    Now, I was very interested in your testimony, Mr. 
Zuckerberg, when you alluded to the risks of not innovating and 
the danger of the U.S. falling behind some other countries or 
foreign companies who are creating similar platforms. Will you 
elaborate on the initiatives in those other countries?
    Mr. Zuckerberg. Yes, Congressman. Thanks for the 
opportunity.
    Today, as soon as we put out this White Paper on Libra, 
what we saw was, in China especially, they immediately kicked 
off this public-private partnership with some of their biggest 
companies in order to race to try to build a system like this 
quickly, a digital renminbi, that they could use as part of 
their Belt and Road Initiative, their kind of foreign and 
economic policy to grow influence throughout Asia and Africa 
and other areas. And they are planning on launching this in the 
next few months.
    Mr. Barr. I would say that I think AML/BSA issues are 
important when we are talking about Libra and Calibra, but I 
think that the American competitiveness angle and the 
competition with China is a national security issue, and the 
fact that Facebook and the Libra Association is launching into 
innovation, I think, is positive for our national security.
    Mr. Zuckerberg, I do want to commend you on statements you 
made recently at Georgetown University about free speech and 
the First Amendment. I was particularly happy to hear you say 
that you will, ``continue to stand for free expression, 
understanding its messiness, but believing that the long 
journey towards greater progress requires confronting ideas 
that challenge us.''
    I am reminded of what John Stuart Mill wrote on liberty, 
and I would commend it to my colleagues and my friend, the 
chairwoman. Mr. Mill wrote that, ``If all mankind minus one 
were of one opinion, and only one person of the contrary 
opinion, mankind would be no more justified in silencing that 
one person than he, if he had the power, would be justified in 
silencing mankind.'' This sentiment is important and relevant 
to Facebook, especially in today's age of political 
correctness, accusations of offensive speech, safe places, and 
the dramatic polarization of our political discourse.
    I do find it highly troubling that politicians are trying 
to bully you into being a fact-checker, and to be the speech 
police, especially in politics, which is at the core of the 
First Amendment. And so along those lines, I want to ask you a 
question about censorship and whatever fact-checking board you 
are delegating these responsibilities to.
    Will you commit that Facebook will not censor any political 
ad placed on your platform or in support of President Donald 
Trump?
    Mr. Zuckerberg. Congressman, my commitment on this is that, 
or the principle, at least, here, is that we believe that 
people should be able to see for themselves what politicians 
are saying. That doesn't just go for Trump. That goes for any 
of the candidates, for any of our national offices. People need 
to be able to see for themselves and be able to make judgments 
on what the candidates are saying and their character.
    Mr. Barr. Well, I applaud you for that, and I don't want 
you to be bullied by politicians to relinquish our treasured 
free speech under the First Amendment. Protect it, and don't be 
bullied by politicians who want to censor politically incorrect 
speech.
    I yield back.
    Chairwoman Waters. The gentleman from Missouri, Mr. 
Cleaver, who is also the Chair of our Subcommittee on National 
Security, International Development and Monetary Policy, is 
recognized for 5 minutes.
    Mr. Cleaver. Thank you, Madam Chairwoman. And thank you, 
Mr. Zuckerberg, for being here today.
    In response to a letter that I sent to FSOC, I was told 
that it is unclear whether U.S. and foreign regulators will 
have the ability to monitor Libra, and require any kind of 
corrective action. And then, at the same time, if U.S. and 
international regulators are, as they said in the letter to me, 
unaware if they have the ability to monitor your network and 
then protect against money laundering and terror financing, how 
are you going to get over the regulatory hurdles, if they are 
already saying that, and what happens if regulators just throw 
up their hands and say that they cannot guarantee the soundness 
of this product?
    Mr. Zuckerberg. Thank you, Congressman. There are two parts 
of the process here: the first is what we and the rest of the 
association are trying to do to design the system so that it 
eliminates those risks; and the second is the process of 
working with the regulator on their concerns and questions, to 
make sure it meets approval.
    On the former, the key part of this is that the system will 
be fully backed, one-to-one, in the reserve, by a mix of cash 
and highly liquid assets. So that sets it in contrast to the 
way that most banks work, with a fractional reserve, where 
there could be a run on the bank if a lot of people want to 
withdraw from that system. Here, everything will be backed one-
to-one, so, in theory, that shouldn't be possible.
    Now in practice, I get that sometimes there are additional 
risks beyond what the theory says should be possible, so we 
need to work with the regulator to work through their questions 
and concerns, and make sure that we are operating at the 
highest level of rigor for financial stability. And that is why 
my commitment is that we are not going to launch the Libra 
payment system, here or anywhere else around the world, until 
we get the approval from FSOC and the other relevant U.S. 
financial regulators.
    Mr. Cleaver. I was pleased to hear you say that. Now, there 
is a mechanism that you have talked about that you wanted to 
roll out, or I guess you already have begun to do that, which 
would be some kind of a review mechanism. Can you share that 
review mechanism that would, in some ways, tell you, an 
independent group would tell you what they believe to be 
violations of human rights that end up on Facebook, and so 
forth?
    Mr. Zuckerberg. Thank you, Congressman. I believe you are 
talking about the issues around content and hate speech and 
areas like that. Yes. This has been an area--our principle is 
we want to give people as much voice and as wide a definition 
of freedom of expression as possible, but, of course, there are 
going to be some things that infringe on others' rights or can 
cause harm. And one of the things that we have struggled with 
is, how do you develop a nuanced set of policies that can 
identify all of the different types of harms? We have talked 
about a number today, including terrorism and child 
exploitation and aspects of hate speech or health 
misinformation. There are about 20 different categories that we 
track all in, and we develop policies. We now have more than 
35,000 people at the company who work on safety and security 
overall. We spend billions of dollars a year on this. Our 
budget on safety and security is now greater than the whole 
revenue of our company was at the time that we went public in 
2012, so it is a big effort.
    But nonetheless, I believe that it should not sit on any 
one company's shoulders to make so many important decisions 
about speech. So one of the things that I have tried to focus 
on doing is building an independent oversight board that will 
consist of people with diverse backgrounds and views, and is 
global, but who all value freedom of expression. And this group 
will be able to make final, binding decisions on what content 
stays up and comes down on Facebook that even I or our team 
won't be able to overrule. So, it will create a check and 
balance and oversight of our company's operations--
    Mr. Cleaver. How do you extricate yourself from that, from 
that body that you would be creating?
    Mr. Zuckerberg. Congressman, the way we are setting this up 
is so that we will appoint the first set of co-Chairs for the 
body, and we hope to do that in the next few months, and then 
they will nominate a set of other members, and we will jointly 
agree on them. Once the board is up and running, it will 
nominate and refill itself. So we will not be involved in the 
selection process after that.
    Mr. Cleaver. Thank you. Thank you, Madam Chairwoman.
    Chairwoman Waters. The gentleman from Colorado, Mr. Tipton, 
is recognized for 5 minutes.
    Mr. Tipton. Thank you, Madam Chairwoman. Mr. Zuckerberg, a 
number of my colleagues have have expressed some consideration 
that needs to be taken in regard to the prospective payments 
industry within the Libra Association. As you are well aware, a 
number of businesses have had extensive experience in 
international payments. MasterCard and Visa have pulled out of 
that association. Would you view Facebook as an expert in the 
payments industry?
    Mr. Zuckerberg. Congressman, we are not traditionally 
primarily a payments company, but the person who is running the 
Calibra subsidiary for us, David Marcus, was president of 
PayPal before, which is one of the great payments companies, 
and we certainly have other financial experts on the management 
team and board of the company.
    Mr. Tipton. You also noted in your testimony today that you 
are going to be looking for U.S. regulatory approval, in terms 
of AML/BSA, to be able to make sure that Facebook, for its part 
within the association, will continue to participate. If the 
Libra Association can't satisfy those regulations with the U.S. 
regulations that are in place, will Calibra pull out of the 
association?
    Mr. Zuckerberg. Congressman, the short answer would be yes. 
If we don't come up with a solution that gets the U.S. 
regulatory approval, then presumably we will continue working 
on the proposal until we can, but we are not going to launch 
anything that doesn't have U.S. regulatory approval.
    Mr. Tipton. So, the wallet portion of this you would pull 
out?
    Mr. Zuckerberg. Sorry. I didn't hear that.
    Mr. Tipton. You would pull out on the wallet portion of 
this, with the Calibra?
    Mr. Zuckerberg. The case that I was referring to before, 
where we might be required to pull out, is if the association 
independently decides to move forward on something that we are 
not comfortable with. But right now, my understanding is that 
everyone is aligned on making sure that we have U.S. regulatory 
approval to launch anywhere in the world, and that is the goal 
and that is the plan.
    Mr. Tipton. From what you know currently of how it is being 
structured, is there an internal monitor in place? Could you 
describe that, in regard to AML/BSA?
    Mr. Zuckerberg. Congressman, sure. There are multiple 
levels of the work here. There is going to be some work at the 
network level, so at the Libra Association level, the 
architecture of the system itself, that supersedes all of the 
individual work that the companies are doing to implement this.
    And then, of course, the companies that are members of the 
association, or are transacting using this payment system, will 
be responsible for themselves implementing and following those 
rules. Within Facebook, we have a big effort to make sure that 
we can verify people's identities and authenticate them, this 
predates Calibra, and we do this today, if someone wants to run 
political ads or run a large page where we require--
    Mr. Tipton. I do appreciate that, but one of the concerns 
with Facebook, and then perhaps potential participation with 
Libra, Calibra, that is going to be going in, you have had 
major hacks, losing personal information for millions of users, 
that had gotten through. What assurances are actually going to 
be in place to make sure that the users with the most sensitive 
information that you could have, in terms of finances, are 
going to be protected, and then, also, again, including BSA and 
anti-money-laundering?
    Mr. Zuckerberg. Thanks, Congressman. The payment 
information that people share is stored separately from other 
information in our services, and all of our information is 
stored securely, and we work hard on security. This is 
especially secure, and I don't think we have had an issue with 
this to date. Even though we haven't launched Calibra as a 
product yet, we do take payments for a number of things today, 
ranging from fundraisers to people buying ads, and we have a 
secure tier in our data center focused on payment information, 
and that has worked well so far.
    But we also, as part of--
    Mr. Tipton. You have had no data breaches in that field?
    Mr. Zuckerberg. My understanding is that we haven't had any 
issues on that, in the payment area.
    Mr. Tipton. Okay. Thank you.
    One of the issues that I am concerned about is, if Libra 
comes into place, can we use it to buy anything that is legal 
in this country? Would you support that?
    Mr. Zuckerberg. Congressman, I think the intent would 
certainly be to have give people as much control over what they 
want to do as possible. Of course, there are certain types of 
goods that are regulated and that require additional processes 
to allow that, and then there are certain content policies that 
I just think we haven't developed yet. That is much further 
downstream of where we are now, of basically just trying to 
make sure that we can architect a system that work and that 
gets the appropriate regulatory approvals.
    Mr. Tipton. Thank you.
    Chairwoman Waters. The committee will now take a 5-minute 
recess.
    [brief recess]
    Chairwoman Waters. The committee will come to order.
    The gentleman from Colorado, Mr. Perlmutter, is recognized 
for 5 minutes.
    Mr. Perlmutter. The other Coloradan. Thank you for 
appearing today, Mr. Zuckerberg, and thanks for your testimony. 
I just want to lock one thing down where I heard two answers 
from you earlier. Mrs. Maloney was kind of going through a list 
of regulators and wanted to know if you would wait for their 
approval, and she went through a whole laundry list of them. 
And your answer was, for the parts that apply, yes, we are 
going to go seek their approval. You used the words, ``seek 
their approval.'' Other times you have said, ``We will get 
their approval.'' So just from a Facebook standpoint, are you 
willing to seek the approval, or are you going to wait for the 
approval before anything is launched?
    Mr. Zuckerberg. Congressman, it is the latter. Thank you 
for the opportunity to clarify that. We are not going to launch 
anything until we get the approval. I also, if it is okay, want 
to take a moment to correct and add some context on one of the 
other questions asked before. In catching up with my team--
    Mr. Perlmutter. As long as it doesn't take too long. You 
have 30 seconds.
    Mr. Zuckerberg. The question before was around whether we 
had implemented the changes to ads targeting to make it so that 
people can no longer target age, gender, and ZIP Codes, and a 
bunch of interest categories in housing employment and credit 
opportunity ads. And the answer is we have implemented that 
change in the primary surface for buying ads on Facebook that 
covers 80 percent of the ads. And as part of the agreement and 
the settlement, we have agreed to a time frame to implement it 
for the other 20 percent by the end of the year, which we are 
on track to do, but have not done yet.
    Mr. Perlmutter. Okay. Thank you for that answer. The reason 
you are here before our committee is while we may have issues 
about the ads that you have allowed, whether Russians were 
involved, the disinformation, you are here because of Libra and 
Calibra. Mr. Marcus was here to testify, and really we want to 
understand what this is. Is it a currency? Are you a bank? What 
is this association? And so, I appreciated Mr. McHenry's 
questions and Mr. Huizenga's.
    We all like innovation, but it seems like this innovation 
is going to be housed in an association in Switzerland, not in 
America. And the Constitution is the one that starts all of 
this with Article 1, Sec. 8.5. We are given, the country is 
given the obligation to coin money and regulate the value 
thereof. So do you consider Libra to be money?
    Mr. Zuckerberg. Congressman, I consider Libra to be a 
payment system, and I think those are two ideas that it can 
sometimes be hard to tease out. The U.S. dollar is certainly 
very strong, as we have talked about today, in a number of 
places. We certainly do not seek to undercut that. We want to 
extend American financial leadership across the world.
    Mr. Perlmutter. All right. So you don't consider it to be 
money?
    Mr. Zuckerberg. Congressman, I consider it to be a payment 
system, which is an area where I view the industry that we have 
here as relatively stagnant and not delivering--
    Mr. Perlmutter. And I appreciate that. I am just starting 
with the Constitution here, okay, which puts the responsibility 
on us to coin money. So I am just trying to figure out, and I 
was trying to figure out with Mr. Marcus, too. So let's go to 
the next step, which is Calibra, the wallet, which, in my 
opinion, is the bank, because Libra is in the Calibra. Is that 
not right?
    Mr. Zuckerberg. Sorry? I didn't understand.
    Mr. Perlmutter. Libra, the currency, is in the wallet, 
Calibra.
    Mr. Zuckerberg. Yes, Calibra is our--
    Mr. Perlmutter. So it is like me having my money in Wells 
Fargo Bank.
    Mr. Zuckerberg. You could think about it that way, although 
we are not a bank. We are not applying for a bank charter. I 
think the right analogy--
    Mr. Perlmutter. But that is the problem.
    Mr. Zuckerberg. --is that this is a payment--
    Mr. Perlmutter. Mr. Zuckerberg, that is the problem. That 
is what we are facing here, and this was the same place where I 
ran into kind of trying to understand what this thing is that 
you all are creating, and I appreciate creation. I would like 
it to stay in America and not go to Switzerland. But you are 
putting an association together, and as I have been thinking 
about this, it reminds me of two movies, Dune, and The 
President's Analyst, and if you want to talk about either one 
of them, I am happy to do it. But The President's Analyst was 
where the phone company had information on everybody and wanted 
to take over the world. So we need to know what this is. We 
have to regulate this. And I am not sure you guys understand 
what it is.
    Chairwoman Waters. Thank you. The gentleman from Texas, Mr. 
Williams, is recognized for 5 minutes.
    Mr. Williams. Thank you, Madam Chairwoman, and thank you 
for coming before our committee today, Mr. Zuckerberg. Your 
biography is a textbook example of the power of capitalism. I 
have been a small business owner for 50 years, and I am amazed 
at what you have done. You were a college student, and you had 
an entrepreneurial spirit to create a company in your free 
time. And after years of hard work, you transformed what 
started as a simple idea into one of the largest and most 
powerful technology companies in the world. I don't agree with 
everything that Facebook has done in the past, but that does 
not diminish what you have built, and it makes me proud to live 
in a country where this type of hard work is rewarded. And my 
colleague, Mr. Barr, even talked a little bit about that. So 
before I continue, I want to ask you a very simple question. 
Mr. Zuckerberg, are you a capitalist or are you a socialist?
    Mr. Zuckerberg. Congressman, I would definitely consider 
myself a capitalist.
    Mr. Williams. Thank you for that, and it is always great to 
hear that. Now, you have received lots of scrutiny for taking 
on something as bold as the Libra initiative. This project has 
understandably drawn the attention of pretty much every banking 
regulator in the world, and I don't think there is anything 
wrong with asking questions to ensure this product will be not 
used for illegal activities. However, I said this when David 
Marcus came before this committee back in July, and it still 
rings true today. We should not discourage the private sector 
from investing their own time and money to research these new 
technologies. The private sector seems to get it right most of 
the time. There could undeniably be benefits in bringing this 
product to market. No matter what policies we enact up here in 
Congress, the private sector will be the engine that brings 
game-changing technologies into existence.
    So, Mr. Zuckerberg, can you explain why the private sector 
is better equipped to develop a digital currency, like Libra, 
than the Federal Reserve or another government entity?
    Mr. Zuckerberg. Congressman, I am not sure I am here to say 
that others shouldn't try to put their own ideas forward. I 
just think that as part of the American system, we should 
encourage more people and companies, small businesses, large 
companies, even efforts from the government, to try new things. 
I think that this is an area where our financial system has 
been stagnant and isn't serving a lot of the people that it 
needs to, and I think when that is the case, this is an 
important area.
    There are always going to be risks to any project that 
comes forward, and we need to make sure we diligently address 
those risks, and that is why the regulations are in place. But 
I do think that there are risks to not trying new things, too, 
and not having a lot of different approaches towards that. So I 
am not here saying that my idea or this approach is absolutely 
the very best one. I wish that other people were trying to do 
different things, too. I think that would be important for 
helping to serve people both here and around the world.
    Mr. Williams. Okay. Now, several of my colleagues on the 
other side of the aisle, whom you have heard from today, have 
come up with legislation that would prevent technology 
companies from offering digital currencies. I personally feel 
like this is an extremely shortsighted approach to this issue, 
and that it would put a self-imposed handicap on American 
companies and entrepreneurship, like we talked about, which 
make this country great, compared to our counterparts around 
the world. You have only touched a little bit on this with 
Congressman Barr, but I think we need to repeat it. Mr. 
Zuckerberg, what are other countries, primarily China, doing in 
the digital currency space?
    Mr. Zuckerberg. Congressman, I think right now, especially 
related to Libra and this idea, Chinese companies would be the 
primary competitors. There is an ongoing public/private 
partnership in China where they are very focused on building 
this and exporting it around the world, which I know that there 
are a lot of questions that, I think, are completely valid 
questions about how a project like this would impact America's 
financial leadership, our ability to impose sanctions around 
the world, our oversight of the financial system in a lot of 
places.
    I just think that we need to trade off and think about and 
weigh any risks of a new system against what I think are surely 
risks if a Chinese financial system becomes the standard in 
more countries, because then it would be very difficult, if not 
impossible, for us to impose our sanctions or the kinds of 
protections that I think we are right to want to have oversight 
around the world on all these different countries. And that is 
something that I worry about.
    Mr. Williams. On the first page your testimony, you state, 
``We have faced a lot of issues over the past few years, and I 
am sure people wish it were anyone but Facebook.'' I appreciate 
that you address this issue head on, and I am probably running 
out of time, so I will stop right there. I do want to yield my 
time back and also say I am really glad you are a capitalist. 
Thank you for being here.
    Mr. Zuckerberg. Thank you.
    Chairwoman Waters. The gentleman from Connecticut, Mr. 
Himes, is recognized for 5 minutes.
    Mr. Himes. Thank you, Madam Chairwoman, and, Mr. 
Zuckerberg, thank you for being here. I want to take it 
slightly off topic today because I sit on the Intelligence 
Committee. And I will never forget looking at the thousands of 
Facebook ads and Twitter posts that the Russians had purchased 
in order to attack our democracy. Those posts, as you know, 
played on the painful and often explosive divisions in our 
society--race, gender, and religion. I will never forget, in 
particular, a post that was in Spanish that urged people, 
presumably Latino people, to vote on their cellphones, and I 
wonder how many actually did.
    I read your recent speech at Georgetown a couple of times 
actually on freedom of expression, and I really celebrate your 
commitment to freedom of expression. But if you don't mind my 
saying, it also came across as one-sided. It spoke about Martin 
Luther King, and civil rights, and the importance of Black 
Lives Matter having a voice. But it didn't say anything about 
Indian Muslims killed because somebody used a Facebook post to 
organize a mob, or Rohingyas in Myanmar because the authorities 
used posts to organize a mob.
    And my point is obviously that what your Georgetown speech 
missed, in my opinion, is that like all of our rights, freedom 
of expression is really hard. At least, it is really hard if it 
means anything. It means that the government will defend the 
rights of Nazis to march through a Jewish neighborhood in 
Illinois. It means we will spend our taxpayer dollars to defend 
the right of a Black football player to take a knee during the 
National Anthem. It will defend the right of an American to 
burn the American flag with all of the passion and anger and 
emotion that that would generate.
    Back in 1788, we didn't just naively say freedom of 
expression is a good thing. We put in place, and committed the 
resources, and invested in those things that would make us 
worthy to live in a context of freedom of expression. We 
established regulation through a democratic and transparent 
process. We spent a lot of resources to regulate commercial 
speech. And, most importantly, we invested trillions over the 
years in educating Americans so that when they see something 
that they hate, instead of picking up a gun or a knife, they 
actually formulate a rebuttal. The town I live in invested 
about half of its tax revenue in education.
    So my question is really simple. Facebook--and I am a 
user--today is more like a country, in my opinion, than like a 
company. You have global reach. Apparently half of Americans 
get their news from Facebook. So my question is really simple. 
Given the investment that we made in establishing the context 
for freedom of expression, what commitment will you make, what 
investment will Facebook make? You have almost $50 billion in 
cash on your books. Tell us what investment you are making so 
that this freedom of expression, which you enable, is a good 
thing rather than a bad thing, so that the good side of freedom 
of expression overwhelms the Rohingyas, and the Indian Muslims, 
and all that can be bad coming out of freedom of expression.
    Mr. Zuckerberg. Congressman, thank you for the opportunity 
to address this. I talked about a number of these risks in the 
speech that you referenced, but at a high level, I think you 
are right. When you serve billions of people, even if only a 
very small percent of them use our services to do harm, that 
can still be a lot of harm. And we certainly have a big 
responsibility to make sure that we address all of the new 
threats that come from the internet and as well as existing 
threats that have been there all along.
    This is something that, in terms of our resources and what 
we are doing, since 2016, we have built much more sophisticated 
AI systems to proactively identify harmful content. Now, 99 
percent of the terrorist content that we take down, our AI 
systems identify and remove before anyone sees it. And that is 
the kind of thing that we want to be doing for all of the 
categories of harmful content.
    Mr. Himes. Let me stop you there because I get that, and 
that is important. But what I am really looking for is, what is 
the parallel commitment that Facebook will make with its half a 
trillion dollars of market cap and $50 billion in cash? What 
investment will you make in education, in good public 
discourse, in basic decency? I am looking for a commitment for 
what you will do to help make the society worthy of free 
expression.
    Mr. Zuckerberg. I think it is two things. One is on the 
safety side. It is a major investment in proactively 
eliminating harm. And then on the proactive side, we are going 
to be investing a lot more in partnerships with high-quality 
journalists and publications to foster that kind of content. 
But as I mentioned earlier, we have more than 35,000 people at 
the company who work on safety and security. We spend billions 
of dollars a year on it. It is a very significant portion of 
our budget and expenses. We spend more money now on safety and 
security in a year than the whole revenue of our company was at 
the time that we went public just earlier this decade.
    A lot of the things that we are doing now simply just would 
not have been possible even 6 or 7 years ago for us to do. But 
now, we are a big company. I feel like we have a responsibility 
to do this, and you have my commitment--
    Mr. Himes. My time has expired. I think you have a 
responsibility to do more than police. I think you have a 
responsibility to actually invest. But thank you, and my time 
has expired.
    Chairwoman Waters. The gentleman from Arkansas, Mr. Hill, 
is recognized for 5 minutes.
    Mr. Hill. Thank you, Madam Chairwoman. Thanks for holding 
this hearing. Mr. Zuckerberg, we are glad to have you in the 
House Financial Services Committee. As a former start-up 
investor, and entrepreneur, and banker over many years, I 
congratulate you, like so many of my colleagues, on an 
extraordinary investment and entrepreneurial success in 
creating Facebook. And I do also admire people in our 
capitalist system here who are disruptors, who find a gap, find 
a weakness, and try to exploit it with a new product that is 
better for consumers. If we hadn't done that over the past 50 
years in finance, we wouldn't have ATMs. We wouldn't have 
credit cards. We wouldn't have debit cards. We wouldn't have 
free checking, or securitization, or 401(k) plans, or mobile 
apps. So, of course, this committee is keen to embrace 
innovation, and working with my friend, Dr. Foster, down there 
on our Financial Technology Task Force and our Artificial 
Intelligence Task Force, this is important, and it is supported 
bipartisanly that we support innovation on this committee.
    And I certainly don't want to punish the Libra Association 
for a product that doesn't even exist yet, but I was reading 
the G-7 report that Mr. Marcus participated in, and the G-7 
says, ``The G-7 believes that no global stable coin project 
should begin operations until the legislative, regulatory, and 
oversight challenges and risks outlined above are adequately 
addressed through appropriate designs, adhering to regulations 
that are clear and proportionate to those risks.'' Is that a 
statement that you agree with?
    Mr. Zuckerberg. Congressman, I haven't reviewed that report 
in detail. But in general, we understand that working in 
financial services and payments is an area that is very 
sensitive. People's money is obviously extremely important to 
them, and there are good regulations that are in place to make 
sure that all services basically protect people. And I want to 
make sure that we do the same and are at the same standard or 
higher in everything that we do.
    Mr. Hill. I appreciate that. That is good. I think you have 
made it clear to Mr. Huizenga, Mr. Luetkemeyer, and others that 
Libra will not go forward in the world in any country unless it 
meets an adequate standard here in the United States. And I 
think that what I am saying is this G-7 announcement last week, 
I would say, mirrors that exactly, that the G-7 countries 
beyond the United States agree with that view as well.
    Let's talk about privacy for a minute. George Gilder has 
written a great book called, ``Life After Google.'' I am sure 
you have read it. If not, I commend it to you. In a quote in 
there that I am paraphrasing, ``Private keys are held by human 
beings, not by governments, not by Google,'' and I would say 
parenthetically, not by Facebook. Do you support the idea that 
in a future digital world, we as individuals each control our 
data, and that we exchange it only when relevant at the time 
necessary to conduct a particular transaction? Is that a world 
that you acknowledge is the future?
    Mr. Zuckerberg. Congressman, I think it might be a little 
more nuanced. I certainly think that there should be private 
tools that people can use to exchange messages and information 
privately. That is why WhatsApp is end-to-end encrypted. That 
is why we are moving our private messaging tools to be end-to-
end encrypted. At the same time, I think that as content gets 
to be broader and more publicly visible, there the equities and 
values, and the balance there shifts towards upholding public 
safety in addition to privacy. And I think if someone is 
sharing something very broadly, we need to make sure it is not 
broadly inciting violence or--
    Mr. Hill. Right. No, I understand that. I'm not talking 
about--
    Mr. Zuckerberg. And there I think--
    Mr. Hill. I am talking about people's personal data, the 
privacy of people's personal data, that is theirs is to share 
as they deem fit under some authentication.
    Mr. Zuckerberg. Absolutely.
    Mr. Hill. But let me move on. Let's talk about digital 
currency. Dr. Foster and I also sent a letter to Chairman 
Powell at the Federal Reserve about the idea of a digital 
dollar. My interest in that was actually raised by Mr. Marcus 
in his testimony. Wouldn't it be easier if there was a digital 
token that was a U.S. dollar for that to simply be the digital 
token you are looking for, and, as noted here, that you don't 
go and try to create something separate?
    Mr. Zuckerberg. My understanding, Congressman, is that--
    Mr. Hill. Wouldn't that meet all the standards you need? 
You want to help remittances. You want to lower costs. You want 
to create a different rail for payments. Wouldn't that be 
successful in doing that?
    Mr. Zuckerberg. My understanding, Congressman, is that the 
community is fairly split on this point. I think from a U.S. 
regulatory perspective, it would probably be significantly 
simpler, but because we are trying to build something that can 
also be a global payment system that works in other places, it 
may be less welcome in other places if it is only 100 percent 
based on the dollar.
    Mr. Hill. I yield back. Thank you, Madam Chairwoman.
    Chairwoman Waters. The gentleman from Illinois, Mr. Foster, 
is recognized for 5 minutes.
    Mr. Foster. Thank you, and I am proud to join 
Representative Hill as the other half of the chairmen of the AI 
Task Force that we are working on. I may be the only AI 
programmer in the U.S. Congress, so I have to admit that I play 
around more with TensorFlow than with pie charts. Sorry about 
that.
    Mr. Zuckerberg. We'll get you there over time.
    Mr. Foster. Okay. And as you may know, I am introducing 
with Senators Warner and Hawley the Dashboard Act, which 
provides transparency to consumers and regulators about what 
data is being collected and also how it is monetized. It also 
provides limited rights of deletion. And I was wondering if you 
would be willing to comment for the record on what you think is 
the technical feasibility of that as well as any policy 
concerns you might have.
    Mr. Zuckerberg. Congressman, can you clarify which part you 
want to--
    Mr. Foster. The feasibility of the data specification, the 
collection, delivery to consumers. There are lots of details 
that have to be filled out in any project like this. How would 
a consumer authenticate himself to make sure that he is 
actually looking at his data and so on? And also, if you have 
the right to delete, you also have to authenticate yourself 
appropriately. And that is a whole bag of snakes, as you are 
aware. Have your staff take a look at that, and if you would 
get back to us for the record if you see any technical problems 
in the implementation of it, because I think it is a good step 
forward.
    Now, you have been asked, and I don't think we received a 
clear answer, as to whether or not Libra will allow truly 
untraceable, anonymous transactions. Can we have a clear 
statement on that? Will it be possible to conduct an anonymous 
transaction using Libra?
    Mr. Zuckerberg. Calibra--
    Mr. Foster. No, Libra. Libra. Libra.
    Mr. Zuckerberg. I think this is--
    Mr. Foster. If you are an onramp to an anonymous platform, 
one that allows anonymous transactions, then there is a whole 
host of problems. So will Libra allow anonymous transactions?
    Mr. Zuckerberg. I think that it is an open question whether 
we allow--
    Mr. Foster. But you have published your code, right? To 
look at your code, it seems to me, from my looking at the 
description of the code, that if you have the private key, you 
have control of that Libra balance, period, full stop, and that 
makes it pretty hard. It is equivalent to self-custody, and if 
you allow self-custody, it is pretty hard to stop anonymous 
trading. Have I missed something there?
    Mr. Zuckerberg. Congressman, I think this is probably more 
of a policy issue and question that--
    Mr. Foster. But as your code currently exists, can you 
transact anonymously with Libra?
    Mr. Zuckerberg. Congressman, it certainly would be possible 
to build a system that would allow that. I think that there is 
a policy question about what the restrictions are that need to 
be placed on that, and there are equities on both sides. If the 
goal is to enable inclusion, especially in countries where 
there might not be--
    Mr. Foster. I understand the arguments. I am just asking as 
you currently plan, as it currently exists, it seems to me that 
anonymous transactions are allowed. If there is something wrong 
with that, I understand you can change the way it operates. But 
as it is currently exists and the code currently exists, I 
believe it is not possible. If I am wrong about that, please 
get back to us for the record.
    The second thing that you have to come up with an answer to 
is under what conditions fraudulent or mistaken transactions 
can be reversed. Now, you mention in your testimony that 
Calibra intends to refund unauthorized transactions, okay? But 
now, what are the limits to that? For example, if there is, I 
don't know, a $1 million ransomware payment that is made 
through Calibra, is that something you are going to then 
refund? What are the limits to that, or are there no limits?
    Mr. Zuckerberg. Congressman, I don't know if we have worked 
out all those policies yet, but our intent in principle here is 
to be at the level of or exceeding the level that people expect 
from other payment instruments, whether it is credit cards or 
other things like that, in terms of fraud protection and 
consumer protection.
    Mr. Foster. Yes, but you have to charge something. 
Depending on what class of fraud you are actually insuring 
against, then you are going to have to charge someone for it, 
or it is not going to be a profitable product. You haven't 
thought about the details? There is nothing you can give us in 
writing on what your current plans are for when you can reverse 
fraudulent or mistaken transactions?
    Mr. Zuckerberg. Congressman, I am not saying that we 
haven't thought about it. What I am saying is that we haven't 
nailed down the policy yet.
    Mr. Foster. Okay.
    Mr. Zuckerberg. The specific product policies in Calibra, I 
think, are downstream to working out an architecture for the 
overall project that is acceptable to regulators.
    Mr. Foster. But at the very start, you have to understand, 
is there a mechanism to reverse transactions? All of these 
bitcoin billionaires go around with big security details 
because if someone puts a gun on their head and says give me 
your bitcoin, it is not a reversible transaction. I don't think 
people want to live in that kind of situation, and so I'm 
trying to understand who will provide what guarantees to allow 
you to reverse a fraudulent or mistaken transaction.
    Mr. Zuckerberg. Congressman, Facebook is committed to 
reimbursing people and figuring out the right policy on that. 
There may be restrictions like you are asking. We haven't 
nailed down all of those policies exactly, but the goal is just 
like when you are using a credit card, you expect the credit 
card company to pay if there is--
    Mr. Foster. Correct, and there are limits on that. There 
are well-defined legal limits, and that is why the credit card 
agreements are so long and no one reads them. All right. Thank 
you. My time has expired.
    Chairwoman Waters. The gentleman from Georgia, Mr. 
Loudermilk, is recognized for 5 minutes.
    Mr. Loudermilk. Thank you, Madam Chairwoman. And thank you, 
Mr. Zuckerberg, for being here today. Madam Chairwoman, last 
evening I was reading the Washington Post website because they 
had leaked some information that was interesting. And right 
below their headline was a caption of their motto that says, 
``Democracy Dies in Darkness.'' And I want to thank you for 
holding this hearing today in this hearing room in the light of 
the public, not in the basement of the Capitol complex behind 
locked doors as some other hearings are being held today. And I 
thank you for that because I think it is important that the 
American people be able to see what we are doing here in 
Congress.
    Mr. Zuckerberg, you have faced a lot of criticism here 
today and in a lot of what you are doing. I was in the 
information technology sector for 30 years. I have seen it. 
When people shake up the status quo, they get criticized, but 
even some of your harshest critics here today, I will venture 
to say, if they haven't already, will post their comments and 
maybe even the videos of their questioning on Facebook, which 
is a testimony to the impact that your vision, your innovation 
has had not only on American culture, but on business, on 
technology. And it doesn't come easy, and much of the criticism 
that I have seen in my tenure, because I am one of those who 
loves innovation. I love finding the place that technology can 
fit, and I think you share that as well.
    I remember back when Bill Gates was attacked because he 
challenged Linux. These are the types of things that innovators 
face, and I hope that you take this in the complimentary way 
that I mean it. But there is another gentleman in this town 
that I think you share a lot with, and that is President Trump. 
You are both very successful businessmen. You are both 
capitalists. You are both billionaires. You have done very 
well. But I think really what you share in common is you both 
challenge the status quo. He calls it, ``draining the swamp.'' 
You see it as innovation.
    Now, this town is intolerant to shaking up the status quo. 
Bureaucrats, politicians learn to manipulate the system to 
their advantage, and when you bring in new ideas, it is really 
hard for them to understand them. Some of the questions in here 
today have been indicative of, everyone wants to put what you 
are doing in a box, and quite often when you are thinking 
outside the box, there isn't a box to put it in. I think we 
should advance. I think we should seek innovation. I am not 
opposed to some of the things that you are trying to do. I am 
gravely concerned about the implications they have, the 
operation of it, but I think we need to give it due 
consideration.
    So my questions are really around how this thing is going 
to operate, how do you see it operating, because I don't see it 
fitting in a box. Now, the Federal Reserve Chairman told our 
committees earlier this year that if Libra causes problems 
related to money laundering, terrorism, financing, privacy, or 
consumer protection, they would rise to systemically important 
levels simply due to the size of the Facebook network. David 
Marcus has said if Libra is not done right, it could present 
systemic risk.
    Do you believe Libra is systemically important, especially 
since you are calling it a payment system, which is really done 
by central banks? Do you compare what you are doing with Libra 
to central banks, and should be you be regulated as such?
    Mr. Zuckerberg. Congressman, the distinction on what is 
systemically important, my understanding is that a big part of 
that is scale. And I think it is worth noting that just because 
Facebook serves a lot of people around the world doesn't mean 
that if we rolled out a product, that on day one all of those 
people would be using it. Like any of the things that we do, we 
would probably have to experiment and make the product work 
over time, and that would be risky. We are talking about a long 
public period--we were discussing this before--before actually 
getting any approvals and shipping stuff. But I actually think 
that there is also quite a risk that we ship something, and it 
takes a long time to even make that work.
    I think that if the plan works over time, it certainly 
could rise to the level that someone might determine as 
systemically important. I will defer to the regulators' 
judgment on when that is, but I don't think it is automatically 
the case that if something launches and it is a small subset of 
the people who use our services, that it has to be that on day 
one.
    Mr. Loudermilk. If it does get to that, that it is deemed 
systemically important, based on your previous statements that 
you are going to work with regulators, are you prepared to meet 
the requirements and the regulations that come with this 
systemically important financial service?
    Mr. Zuckerberg. Congressman, we would be, and that is why 
we are working on this project because we believe that, in 
addition to the other ideas for digital currencies and 
cryptocurrencies that are out there, having a payment system 
that is based on some of those technologies, but is regulated 
at the highest levels and upholds the highest standards on all 
of the areas around safety and security, whether it is 
financial stability, or fighting terrorism, or fighting crime, 
or fighting fraud, we think that that can exist with a digital 
currency, too. And that is what we are trying to help create 
here.
    Mr. Loudermilk. Thank you. I have several other questions I 
will submit for the record, but I see that I am out of time, 
and I yield back. And thank you for being here.
    Chairwoman Waters. Thank you. The gentlewoman from Ohio, 
Mrs. Beatty, who is also the Chair of our Subcommittee on 
Diversity and Inclusion, is recognized for 5 minutes.
    Mrs. Beatty. Thank you, Chairwoman Waters. Mr. Zuckerberg, 
I want to get through a number of questions--diverse asset 
management, fair housing issues, diversity and inclusion in 
privacy and security. Diversity and inclusion is very important 
to me and it is personal for me. I have been here before with 
Facebook about the lack of diversity and inclusion. I have 
discussed this repeatedly with your company over the past 
years. I am Vice Chair of the Congressional Black Caucus, and 
the Congressional Black Caucus, for the record, has had 
multiple meetings with your company, and here we are again.
    Let me get into asset management. Certainly, that is a 
large industry, as we know, something like a $70 trillion 
industry. Facebook has more than $46 billion on record in cash 
or cash equivalents and marketable securities. Are any of these 
funds managed by diverse-owned companies? Yes or no?
    Mr. Zuckerberg. Congresswoman, I don't believe--
    Mrs. Beatty. I will take that as a ``no.'' You have a 
stable of big law firms that work on your legal cases around 
the country. How many diverse-owned or women-owned law firms 
are contracted by Facebook? Just give me a number or a range?
    Mr. Zuckerberg. Congresswoman, I don't know off--
    Mrs. Beatty. I will take that as, ``I don't know.'' How 
many women or minority partners work on these cases?
    Mr. Zuckerberg. Congresswoman, I don't know the answer to 
that but I am happy to get back to you--
    Mrs. Beatty. It is my time. Did you review the packet that 
went out in a notification to you and your team about what was 
included today? Diverse asset management was in it. Did you 
read that?
    Mr. Zuckerberg. Congresswoman, I certainly--
    Mrs. Beatty. There is a piece of legislation that I am 
working on that was in the package. Did you or your team review 
it? Everybody has talked about your scholarly resume. Did you 
review the packet that was sent to you from this committee? 
Obviously, that is a, ``no.'' Let me go to someone you 
introduced. You introduced Laura Murphy. So you know who Laura 
Murphy is because you said her name, right?
    Mr. Zuckerberg. Yes.
    Mrs. Beatty. Okay. So you hired her as a consultant, and in 
your opening statement, you talked a lot about civil rights. I 
think we should probably phrase it a little differently, that 
your work with civil rights is a result of the number of 
lawsuits that you have had. The NAACP, and even Secretary Ben 
Carson filed a fair housing lawsuit against you for violations. 
So let me ask you this, do you know what redlining is?
    Mr. Zuckerberg. Yes.
    Mrs. Beatty. Okay. Then you should have known better, and 
maybe if you had real diversity or inclusion on your team, 
somebody in that room would have said what you were doing when 
you looked at what you were doing in housing, how you were 
redlining or using ZIP Codes to eliminate people from getting 
information. Now, have you read the report that Laura Murphy 
sent to you? You have said a lot about diversity, and you 
introduced her name, about this great study and her work. Have 
you read it? Do you know what the recommendations were? Do you 
know when she issued the report? Yes or no?
    Mr. Zuckerberg. I have seen the report.
    Mrs. Beatty. Okay. Tell me what the top 3 things were, 
because I have it right here. What were the top 3 things in her 
report? Somebody talked about lying in this committee, I'm just 
saying.
    Mr. Zuckerberg. One of them was around housing, which we 
have talked about. The other was around setting up a civil 
rights task force.
    Mrs. Beatty. And who is on the civil rights task force?
    Mr. Zuckerberg. Sheryl Sandberg is the person who is a--
    Mrs. Beatty. Okay. Well, we know Sheryl is not really civil 
rights, so I am trying to help you here. She is your COO, and I 
don't think there is anything, and I know Sheryl well, about 
civil rights in her background, so you have to do better than 
that for me if we are going to talk civil rights.
    Mr. Zuckerberg. It is an internal task force--
    Mrs. Beatty. Do you know who the firm that you employ for 
civil rights is?
    Mr. Zuckerberg. Congresswoman, I don't--
    Mrs. Beatty. How could you not know when you have employed 
the most historical, the largest civil rights firm to deal with 
issues that are major? And this is what is so frustrating to 
me. It is almost like you think this is a joke when you have 
ruined the lives of many people, discriminated against them. Do 
you know what percentage of African Americans are on Facebook 
in comparison to majority folks? Do you know what the 
percentages are?
    Mr. Zuckerberg. People using the Facebook--
    Mrs. Beatty. Yes. Do you know what the percentages are for 
African Americans?
    Mr. Zuckerberg. I don't, because we don't collect the races 
of people--
    Mrs. Beatty. It came out in a report by the Pew Research 
Center that was sent to you. Maybe you just don't read a lot of 
things that deal with civil rights or African Americans. I have 
a lot of questions I am going to send to you that I am not 
going to be able to get through, and I would like an answer, 
because this is appalling and disgusting to me. And I yield 
back.
    Chairwoman Waters. The gentleman from Ohio, Mr. Davidson, 
is recognized for 5 minutes.
    Mr. Davidson. Mr. Zuckerberg, thanks for coming and talking 
with our committee. I appreciate your presence here and your 
testimony. And frankly, I go back to when I first saw Facebook, 
and I said, why would anyone put this on the internet? And 
obviously, you had a vision for this company that frankly, some 
early stage venture capital companies took a pass on, and they 
missed it. I am sure they are kicking themselves today. But you 
have pulled off a truly innovative company that, while we 
haven't yet captured all of the possible innovation on the 
internet, you really hit a spot. And as a capitalist, as a guy 
who launched a successful company, scaled it up, and, as a 
founder, you are still, in large measure, in control of that 
organization, though it is publicly traded. So, 
congratulations. It is a rare feat.
    And I just wanted to get your insight about where the 
technology is headed. Prior to Facebook talking about Libra or 
a digital wallet, Calibra, there were people saying well, 
bitcoin is this niche thing. Listening to how some of my 
colleagues have addressed you, I suspect you may actually envy 
whomever Satoshi Yakamoto is because he is very anonymous. It 
is hard to subpoena Satoshi Yakamoto or ridicule him, but then 
again, no more control over bitcoin. There is no headquarters 
or anything else.
    You clearly made blockchain synonymous with bitcoin early 
on, but blockchain itself and distributed ledger technology, I 
believe, is going to be substantially bigger. And I think a lot 
of people took Facebook's entry into this space as a sign that 
you and others view this as a much larger space for emerging 
technology. Could you tell us a little bit about your views on 
that?
    Mr. Zuckerberg. Sure. I think that there needs to be a 
number of approaches here. I think some of the innovation in 
cryptocurrencies and the decentralized nature of that can be 
very valuable. I just think that is not what a big company like 
Facebook can add to the industry. I know once we are in the 
position that we are in, we are not going to create something 
that is decentralized, that can't hold up the highest standards 
of protecting against all the risks that we are talking about 
today, whether it is financial stability, or fighting 
terrorism, or crime, or fraud. We want to work with regulators 
to make sure that we can build something that is at that 
highest standard.
    I am generally in favor of ideas and innovation all across 
the space. I think that the U.S. financial industry, and 
especially the infrastructure on top of which to build 
financial services, is just, frankly, behind where it needs to 
be to innovate and continue American financial leadership going 
forward.
    Mr. Davidson. Yes, thank you for that. And I will say that 
when you talk about Calibra, I get your idea of that to stay in 
control of that, because as a company the size and scale of 
Facebook, you would certainly have Know Your Customer 
provisions, Bank Secrecy Act requirements, and have 
appropriately proposed to regulate Calibra as a money service 
business, including talking to FinCEN, all the things that 
people have to do in compliance with that.
    However, when you are proposing Libra, a cryptocurrency in 
the truest sense, you are really talking about creating money, 
the idea of money. And many of the things in this space that 
are proposed, we have been very sloppy with our language 
collectively to call everything in the space, 
``cryptocurrency,'' where many of these tokens don't aspire to 
be a currency at all. They just represent a good or a service 
and, in some cases, a commodity, and that they are not trying 
to be a security or a currency. And so that lack of clarity is 
driving a lot of the American innovators offshore, not because 
they are avoiding our laws, but because they do have regulatory 
certainty in other jurisdictions. Frankly, Switzerland is one 
of the leaders in this space for regulatory clarity.
    But when we think about Libra, you are one-21st, which is a 
bigger number than one-435th, I would say, and I am weighing in 
here today. Do you believe that Libra has a role to be 
centralized, or could the money itself be decentralized?
    Mr. Zuckerberg. Congressman, I think you are highlighting 
an important point, which is that there is a big difference 
between trying to create a new type of digital payment system 
and creating a new type of currency. What we are trying to do 
is a payment system that is based on a reserve of existing 
currencies.
    Mr. Davidson. Right, and I think centralization is the key. 
And I apologize, I would love to talk to you for about an hour, 
but I only have 10 seconds left. Centralization versus 
decentralization is the key because if you can distort or 
change the value, all of the effort in America securities law 
depends on the central actor, and in America currently, that 
would be regulated as a security, which has big implications. 
My time has expired.
    Chairwoman Waters. The gentleman from California, Mr. 
Vargas, is recognized for 5 minutes.
    Mr. Vargas. Welcome, Mr. Zuckerberg.. It is great to have 
you here. I am sure you are very excited.
    Mr. Zuckerberg. Thank you.
    Mr. Vargas. Still doing okay?
    [laughter]
    Mr. Zuckerberg. Yes.
    Mr. Vargas. I am almost tempted to ask you, since you can't 
lie to Congress, when you were compared to Mr. Trump, did you 
take that as a compliment? No, don't answer. That was a joke.
    [laughter]
    Mr. Vargas. But I do want to compliment you. Don't answer 
that other question. Make sure you don't answer, not even with 
a smile. Okay, no. The question I was going to ask you is this. 
I have heard you, and since I am on this row, I have heard a 
lot of your testimony. You have said that you won't go forward 
with Libra unless you get approval from all of the regulatory 
agencies that are required in the United States. That is 
correct, right?
    Mr. Zuckerberg. Yes.
    Mr. Vargas. Yes. Before you got here, you sent David Marcus 
to us, and I think that wasn't exactly the answer that he gave. 
I think that he was a little more aggressive in wanting to go 
forward, so certainly what you say supersedes what he says if 
there is any conflict in the two.
    Mr. Zuckerberg. Yes. I also think that our views on what we 
should do have gotten clarified since then.
    Mr. Vargas. And how did they get clarified?
    Mr. Zuckerberg. I think through the public discussion that 
is happening. I think we felt that he wasn't able to provide 
enough clarity to Congress when he was here, and we wanted to 
make sure that we came and had a clearer answer on this.
    Mr. Vargas. Okay. Thank you for doing that. One of the 
things I think that you are probably sensing from us is that 
the dollar is very important to us as a tool, a tool of 
American power and also a tool of American values. We would 
much prefer to put sanctions on a country than send our 
soldiers there. As you know, that power that we have because of 
the banking system is significant. You can see some of the 
outlaw states that we have today. We are able to work with our 
colleagues around the world to do something about what they are 
doing because of the power of the dollar. So when something 
threatens the dollar, we get very nervous, and I think we 
should be nervous, because that is something that, again, has 
been very useful for projecting American values and foreign 
power. Do you understand all that fairly well? I think you do. 
You have been hinting at that, but I want to make sure that you 
understand that, because you are playing in a space that is a 
delicate space for us.
    Mr. Zuckerberg. Congressman, at a high level, I certainly 
understand it, and that is why part of what we are doing is 
trying to design the system from the ground up so it can 
enforce U.S. sanctions, travel rule, a number of the 
regulations that are important for creating stability and 
security around the world. And that is, I think, some of what 
is at stake here is that I just think that if we don't 
innovate, there is no guarantee that we will be able to extend 
those same rules and project that kind of influence around the 
world going forward. I think we need to innovate as a country 
in order to keep on ensuring that we can do that.
    Mr. Vargas. And I think we want you to innovate, and 
obviously you are a disrupter in a positive way. But I think 
when we see that you want to go to Switzerland, it was said 
here that Switzerland gives you regulatory clarity. I would 
quote James Henry that Switzerland is, ``the grandfather of the 
world's secretive tax havens,'' and also one of the leaders in 
places where you can hide your money and do all sorts of other 
notorious things. Now, they are starting to loosen up because 
of that history. So, I would give you some advice and ask you 
to think of staying here in the United States. Don't go to 
Switzerland. If you are going to follow all of our rules, why 
do you want to go to Switzerland?
    Mr. Zuckerberg. The Independent Libra Association is--
    Mr. Vargas. It seems to be falling apart without you guys, 
frankly. They don't seem to exist without you. You are the big 
dog in this fight. Honestly, if you decide to bring it to the 
United States, it comes to the United States. You can hide 
behind that a little bit, but I won't believe it. I believed up 
to now, but that I don't believe. I think that if you wanted to 
bring it to the United States, you could.
    Mr. Zuckerberg. Congressman, if you are trying to build a 
global payment system, I think that there is some value in 
housing the Independent Association in the country and in the 
place where a lot of the world's international institutions are 
based.
    Mr. Vargas. Which would be the United States.
    Mr. Zuckerberg. A lot of them are in Switzerland, too, but 
a lot of them are in the U.S., so you are right. And certainly 
our work on this through Calibra and everything that we do for 
Facebook, we are an American company. We are doing it here. 
That technology is here, and that is an important part of why I 
am committing that no matter where we are working around the 
world, we are going to follow U.S. regulations.
    Mr. Vargas. But I hope you go and take a look at that once 
again because I think that it would relieve a lot of fears if 
you did, in fact, house is it here in the United States and not 
in Switzerland. My time is almost up. Again, I appreciate it. I 
think for someone, an innovator like you, it is good to have 
someone who is sturdy and resilient. You are probably the right 
person at the right time to take this beating. Welcome.
    Mr. Zuckerberg. Thank you.
    Chairwoman Waters. The gentleman from North Carolina, Mr. 
Budd, is recognized for 5 minutes.
    Mr. Budd. Thank you, Madam Chairwoman. And, Mr. Zuckerberg, 
again, welcome here. I appreciate your time, and I also 
appreciate your example as an entrepreneur. Just by chance, you 
are not a securities attorney, are you?
    Mr. Zuckerberg. I am not.
    Mr. Budd. I didn't think so. We have several draft bills 
before this committee and as part of this hearing, which amend 
the securities laws, including the Securities Act of 1933 and 
the Securities Exchange Act of 1934. And before the committee 
takes any action on these bills, I hope we can receive 
testimony from various experts in securities law to provide 
their views on whether these bills might have impacts which 
really reach beyond stable coins. It is crucial that members of 
this committee be able to differentiate between Libra, which is 
really not a cryptocurrency, and actual cryptocurrencies like 
bitcoin, ethereum, and XRP, before we discuss draft 
legislation. Many of the proposals would stifle financial 
innovation, and if we are to remain a world leader in financial 
technology, it is vital that this committee not embrace 
reactionary laws against cryptocurrencies.
    Mr. Zuckerberg, Libra has been in the works within Facebook 
for the past year, and since the announcement of the potential 
members, PayPal, Stripe, Visa, Mastercard, and eBay have walked 
away from the association due to various regulatory and 
political concerns. Now, it is notable that every U.S. payment 
processor has exited the association. Unlike current Libra 
Association members like Uber, and Lyft, and various venture 
capital firms, payment processors were given one of the most 
difficult tasks when it comes to digital assets, and that is 
anti-money-laundering and Know Your Customer compliance.
    So with no major U.S. payment processors left in the Libra 
Association, how do you see the Libra Association building a 
compliance regime that adheres to the AML/BSA, or the anti-
money-laundering, Know-Your-Customer provisions that this body 
has worked hard to put into place?
    Mr. Zuckerberg. Congressman, thank you. My understanding is 
there are there are still payment companies that are part of 
the association, and, of course, David Marcus, who runs the 
Calibra subsidiary for Facebook, has run large financial 
services companies. He was the president of PayPal before 
coming to Facebook, so I think we have the right expertise to 
work through these problems, and we will work with regulators 
to come up with solutions on them. We also have a big security 
effort at Facebook, so for Facebook's part of this work, this 
certainly isn't going to be the first time in our company's 
history where we need to fight against sophisticated threats, 
or people who are trying to defraud others, or other types of 
harm, and we have built quite sophisticated AI systems in order 
to be able to work on some of those things.
    Mr. Budd. But would you say it is almost more starting from 
scratch now that these members have left the Association?
    Mr. Zuckerberg. Congressman, I don't believe that is the 
right characterization. Companies joined because they were 
interested in trying to explore what we were doing. A lot more 
companies are interested in joining in the future, and I would 
bet a lot more do join. The association was, I think, just 
officially incorporated, or I don't know what the right verb 
is, but it kind of was officially formed just in the last few 
weeks after months of planning, and there is certainly a lot of 
work ahead.
    Mr. Budd. Thank you. Given its centralized nature, how does 
Libra align with Facebook's earlier claims of building a pro-
privacy future, and how will you guarantee privacy and data 
autonomy during the initial phase of Libra?
    Mr. Zuckerberg. Congressman, thanks for the opportunity to 
talk about our privacy vision. At a high level, the way I think 
about this is that in our lives, we have public spaces, like 
town squares, and we have private spaces, like our living 
rooms, and I think we need digital equivalents of both. We have 
digital equivalents of the town square. That is what Facebook, 
Instagram, Twitter, and YouTube try to be, but we don't today 
really have a digital equivalent of a living room where you can 
interact in all of the ways that you would want to in an 
intimate and secure space. Our text messaging apps today are 
still primarily just text messaging, but I think there is an 
opportunity to, just like we have done with Facebook, build in 
a lot of the different utilities and tools for how you would 
want to interact with people in a broader space, whether that 
is joining communities, starting fundraisers, starting 
businesses, finding people to date, all of these kind of 
broader utilities.
    I think there needs to be something like that in private 
spaces, too. And one of the most important private ways that 
people interact is through payments. So, we are working on a 
number of different approaches here, some that work on top of 
the existing financial system that have the limitations of the 
existing financial system, but are easier to implement because 
we can build on top of everything that exists, and some that 
are more ambitious, like what we are trying to do here where we 
are trying to do a more thorough rethink of the system.
    Mr. Budd. Thank you. I yield back.
    Chairwoman Waters. The gentleman from New Jersey, Mr. 
Gottheimer, is recognized for 5 minutes.
    Mr. Gottheimer. Thank you, Madam Chairwoman. Mr. 
Zuckerberg, thank you for coming today to address our concerns. 
Yesterday, I wrote to Twitter about this letter that they had 
sent to me and to other Members of Congress allowing foreign 
terrorist organizations, Hamas and Hezbollah, to have a 
presence on their social media platform, drawing a distinction 
between good terrorist actors who have been elected and bad 
terrorist actors. I ask unanimous consent to enter this letter 
into the record, please.
    Chairwoman Waters. Without objection, it is so ordered.
    Mr. Gottheimer. Thank you. This issue is particularly 
troubling to me since individuals connected to Hezbollah and 
Hamas terrorist groups were recently found in my home State of 
New Jersey. Mr. Zuckerberg, do you agree with Twitter that 
foreign terrorist organizations, as designated by the United 
States of America, belong on a social media platform, or should 
Twitter have to take down Hamas and Hezbollah's affiliated 
accounts and content?
    Mr. Zuckerberg. Congressman, it is a little hard for me to 
comment on what Twitter should do, but I believe that we take 
down those accounts.
    Mr. Gottheimer. You are a leader on this issue, and your 
company, Facebook, currently Chairs the Global Internet Forum 
to Counter Terrorism, of which Twitter is also a founding 
member, so this is just pretty simple. Yes or no, should 
Twitter have to comply with U.S. law and take down Hezbollah 
and Hamas' official Twitter accounts? Do you think they should 
have Twitter accounts?
    Mr. Zuckerberg. Congressman, as a principle, I think all 
American companies should comply with American laws.
    Mr. Gottheimer. Okay. It sounds like, yes, you believe 
Hamas, and Hezbollah, and other terrorist groups, as designated 
by the United States of America, should have to take down their 
content, just like you have taken steps at Facebook to do so.
    Mr. Zuckerberg. Congressman, it is really not for me to 
tell Twitter what to do, but certainly our policy, and I just 
confirmed with our team here, is that we do not allow them on 
our services.
    Mr. Gottheimer. Right, and I hope that Twitter will also 
follow suit as to the steps that you have taken, and Google has 
as well. And while I greatly appreciate that Facebook has taken 
steps to remove terrorist content from your platform, I am 
still concerned that extremist content still exists in parts of 
your platform. For example, today there are still videos 
circulating on Facebook of the horrific shootings at 
Christchurch in New Zealand. I assume that troubles you, sir?
    Mr. Zuckerberg. Congressman, of course, that would trouble 
me. We build really advanced systems to detect all of these 
different types of harm and to take action very quickly. In 
general, this is an area where we have invested billions of 
dollars and have tens of thousands of people working on this. 
It is not that we are ever going to do a perfect job, but a lot 
of what I am committed to is, every 6 months now, we publish a 
transparency report on how we are doing, proactively 
identifying each of the categories of harm that exist, what the 
prevalence of them is on our services, what percent of that 
content our systems proactively identified versus someone had 
to report it to us. And our goal is to improve every period 
until we can drive that amount--
    Mr. Gottheimer. Right. You are taking all these steps, and 
some stuff, of course, it is hard to get everything is the 
point, but you are doing your best to try to get to everything. 
Is that--
    Mr. Zuckerberg. Congressman, I think that is right.
    Mr. Gottheimer. --a fair characterization? Thanks. Given 
that it still exists on the platform, it is part of the concern 
that I have heard from some about Facebook's ability to prevent 
Libra from being used to launder money or fund terrorism. Do 
you feel that you will have appropriate measures in place to do 
so?
    Mr. Zuckerberg. Congressman, I believe that we will be able 
to do so. We have built some of the most sophisticated systems 
in the world for addressing new threats. Election interference 
was brought up before. These are sophisticated nation-state 
actors from Russia, and Iran, and China now we see, too. They 
are very sophisticated, but we have been able to build systems 
that can proactively identify a lot of those efforts at this 
point, and I think if we can do that, that is a good example 
that suggests that we will be able to address some of these 
challenges, too.
    Mr. Gottheimer. I appreciate that Libra is part of a much 
broader ecosystem related to our leadership in the technology 
space. And, as we have all talked about, it is established in 
Switzerland rather than here where we have plenty of highly-
educated, intelligent citizens ready to be employed. And I 
think we should do everything humanly possible, which I 
appreciate your comments today, to keep our jobs in the United 
States of America and to make sure that we grow this space 
here. How do you think we can maintain this competitive 
advantage in the FinTech space, and how do we keep technology 
jobs of the future, like you have kept, and run them here? How 
do we continue to do that here?
    Mr. Zuckerberg. Congressman, most of the work, I think, is 
still to be done here in the United States. I think the biggest 
question for the future is competitiveness. There are clearly 
very real risks of building anything new in financial services. 
There are all the risks that we have talked about today. I just 
think that we need to make sure we balance making sure we get 
to very good answers on those things while still enabling 
American innovation.
    Mr. Gottheimer. Thank you, and thank you for your candid 
answers today. Thank you for being here.
    Chairwoman Waters. The gentleman from Tennessee, Mr. 
Kustoff, is recognized for 5 minutes.
    Mr. Kustoff. Thank you, Madam Chairwoman. I appreciate you 
calling this important hearing today, and I appreciate Mr. 
Zuckerberg for appearing. I think we have all heard loud and 
clear what you said about the need for innovation in this area, 
especially highlighting the challenge that we have in regard to 
China and where we are in this space as we compete with China, 
or as China competes with us. If I could roll back the clock, 
though, when you came up with this idea and went to your board 
of directors, how did you tell them that Facebook could 
monetize or profit from the creation of the use of Libra and 
Calibra? How did you explain that to your board of directors?
    Mr. Zuckerberg. Congressman, you may not believe this, but 
that is actually not the first thing that we talk about at the 
company. We focus on building services that are going to create 
value in people's lives, and we believe that if we do that, 
that we are able to get some of the value downstream.
    Mr. Kustoff. It eventually came up, though. And how did you 
explain that?
    Mr. Zuckerberg. We identified what we thought was a big 
need for financial inclusion and the ability to easily, and 
quickly, and affordably send money. The way that this will help 
Facebook over time, or our business, is that basically in our 
ads system, it is an auction, which means that if you are a 
small business, we don't have a rate that you have to pay. You 
bid and tell us what the ads are worth to you if you can get a 
new customer into your store or if you can complete a 
transaction. And what we basically see is that when we 
eliminate friction for a customer buying something from a 
business, then the value for that business of advertising on 
our system goes up, so they bid more in the ad system.
    If we can make it so that now, in addition to finding 
businesses that people want to interact with, people can also 
transact with them directly, I would expect that over time that 
will be into higher prices for ads because it will be worth 
more to the businesses so they will bid more in the ad system. 
But in order for that to happen, there are a lot of steps 
between now and then. We have to build a system that passes all 
the regulatory approvals. It has to end up being successful and 
useful for people. And then as kind of a third step far down 
the line, if all that plays out, then we may see a positive 
business impact.
    Mr. Kustoff. Facebook also becomes a marketplace where the 
currency is traded for the goods sold over Facebook?
    Mr. Zuckerberg. Congressman, that is correct, and that is a 
separate area that we are working on already. We distinguish 
between services that we are trying to offer and payments. Like 
this and some of the other payment efforts that we have from 
commerce efforts, we already have Facebook Marketplace, which a 
lot of people use to buy and sell things that they have made. 
There are a lot of secondhand goods that are sold there. A lot 
of people use it, hundreds of millions of people a month. We 
are building Instagram Shopping, which is a new way for people 
to basically connect with the creators and influencers they 
care about, and any kind of brand to make it so they can buy 
things online. And I think that is going to end up being a 
useful product for people as well.
    Mr. Kustoff. You mentioned, of course, one need is the 
underbanked or even the unbanked in our communities across the 
nation. Of course, another problem with that is that some of 
those people who are unbanked or underbanked also live in areas 
without broadband service or without sufficient broadband 
service to trade. Does Facebook have a plan to address those 
areas that lack the broadband access?
    Mr. Zuckerberg. Congressman, we do. We work on this both in 
the U.S. and abroad, and we started working on this in 2013 
when we launched the Internet.org Project. We now also have the 
Facebook Connectivity Project where we build technology. We 
build open source technology that mobile carriers can use to 
decrease their costs, which, in a competitive market, we hope 
some of those savings will be passed along to consumers. We 
have seen certain of these innovations when they get 
implemented in countries around the world because the cost of 
delivering broadband go down. Now some people can afford to 
access broadband who weren't able to before, and the amount of 
the population that gets connected goes up. Overall, the 
connectivity initiatives that we have had, we have measured 
that across the world, and we believe that they have helped 
more than 100 million people access the internet who weren't on 
the internet before.
    Mr. Kustoff. All right. And very briefly, you have heard 
concerns from both sides of the aisle about the operation 
locating in Switzerland. You heard it even before today's 
hearing. With all that considered, will you consider, yes or 
no, locating in the United States versus Switzerland.
    Mr. Zuckerberg. Congressman, at this point, we do not 
control the independent Libra Association, so I don't think we 
can make that decision. But Facebook's efforts--we are 
certainly an American company that is based here, and our 
investment will be largely here.
    Mr. Kustoff. Thank you.
    Chairwoman Waters. The gentleman from Guam, Mr. San 
Nicolas, who is also the Vice Chair of the committee, is 
recognized for 5 minutes.
    Mr. San Nicholas. Thank you, Madam Chairwoman. Good 
afternoon, Mr. Zuckerberg. Thank you for making the time to be 
with us here today.
    I first wanted to commend you for the amazing platform that 
you have built with Facebook. I think that you are very right 
in stating earlier that allowing for Facebook to be the kind of 
platform that would enable challengers to get their messages 
out there versus relying on traditional media, I think is very 
sound. And I am an example of that. I wouldn't be sitting here 
today if it wasn't for Facebook.
    My community on Guam is small. We have a limited amount of 
local media. So, I was able to reach a vast majority of my 
residents just by going through Facebook, and very 
inexpensively, relative to how much a 30-second commercial 
would have cost me. So, I think Facebook has brought a lot of 
opportunities for change and opportunities for new people to be 
able to take advantage of the power behind the platform.
    When you established Facebook, when you were first getting 
it started, did you ever imagine it would get this big?
    Mr. Zuckerberg. Congressman, no. I was building a service 
for my community in college.
    Mr. San Nicholas. Right.
    Mr. Zuckerberg. I thought someone might build something 
like this. I just didn't think it was going to be us.
    Mr. San Nicholas. Yes. I am sure, too, that when you were 
putting Facebook together you never imagined that you would 
have to be worrying about foreign election interference or 
human trafficking or child exploitation or privacy violations 
or housing discrimination on your platform. I am sure those 
things were not things that you thought about when you were 
putting Facebook together in the beginning, right?
    Mr. Zuckerberg. Congressman, you are right that the scale 
has grown quickly, and there are certainly a lot of problems 
that we are handling now, and addressing proactively now, that 
before we might have addressed reactively.
    And it is worth noting that we have had content policies 
since basically the beginning of the company. It is just that 
we used to enforce them reactively. Someone in our community 
had to flag a piece of content to us, and then we would handle 
it, which, of course, if you are starting in your dorm room, 
you can't have tens of thousands of people reviewing content. 
It is the only logical way to do it.
    But at some point along the way, we became a big company 
that has the resources to have all of these folks doing content 
and security review, and to build the kind of AI technology 
that we have today.
    Mr. San Nicholas. Right.
    Mr. Zuckerberg. And now that we can, I feel like we have a 
responsibility to do that.
    Mr. San Nicholas. And I think that you are going to do the 
best job that you can in order to make sure that gets 
addressed, and no doubt because your business model depends on 
it.
    I think the reason why there is a lot of concern in this 
room with respect to Libra is because while Facebook started 
out as a communications and sharing platform, and while the 
idea behind it never really was imagined to grow to this scale, 
or imagined to have these types of problems, I think that is 
the concern of Libra. And while Facebook is a communications 
and sharing platform, Libra is a currency and payment 
settlement platform, and that takes it to a whole new level in 
terms of what we might not be able to foresee in the future. 
And that is where I am very concerned.
    The key to my concern actually rests particularly in the 
fact that Libra is an asset-backed currency, and I heard you 
mention earlier today that you believe that you are going to 
have Libra be able to convert on a one-to-one basis, in terms 
of people being able to put a dollar in and being able to take 
a dollar out. But in listening to that and knowing how currency 
markets work and knowing that Libra is supposed to be backed by 
a basket of currencies, and that currencies fluctuate, it is 
virtually impossible to have a one-to-one ratio of money going 
in versus money going out when it is a single currency going in 
and a basket being invested that is going to have to come out. 
Has that been something that you have factored in?
    Mr. Zuckerberg. Congressman, it is, and I think 
economists--there is not a clear consensus on that point. I 
think some would argue that it is more stable to use a 
combination of currencies rather than to rely on any single 
one.
    Mr. San Nicholas. I think what you would have is less 
volatility. But if you were to have, for example, a basket of 
currencies that would include the euro, the yen, and the 
dollar, and someone were to put in a dollar today, because the 
euro, the yen, and the dollar all fluctuate differently, it is 
very unlikely you are going to be able to pull the exact amount 
out later. And that is why the currency markets use a lot of 
swaps and they use a lot of leverage to be able to have 
arbitrage and balance in order to be able to make sure things 
are able to settle in those ways.
    But when it comes to Libra, there is no singular entity 
responsible for making sure that one-to-one ratio is 
accountable. Let's say, for example, the association were to 
strive for that. They would, perhaps, use leverage to be able 
to meet that one-to-one demand, and things were to grow to a 
point where it would no longer be sustainable. At the end of 
the day, who is going to be responsible if Libra fails?
    Mr. Zuckerberg. Congressman, I think the point of the one-
to-one reserve backing is to prevent the kind of leverage that 
you see in the traditional banking industry.
    Mr. San Nicholas. But it just wouldn't be possible when you 
are using a basket of currencies.
    I think the main question I really want to have answered 
is, if Libra fails, who is going to be responsible for that?
    Mr. Zuckerberg. Congressman, the Libra Association will 
have the reserve, but I understand that this is an important 
question, and this is one of the things that we will be working 
on with FSOC and other regulators to make sure that we have a 
solution that meets their standard.
    Chairwoman Waters. The gentleman from Ohio, Mr. Gonzalez, 
is recognized for 5 minutes.
    Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman, and 
thank you, Mr. Zuckerberg, for being here today.
    As I have said many times in this committee, I believe 
distributed, permission-less blockchain technologies have the 
opportunity to fundamentally change the digital world in very 
positive ways, and I absolutely want this country to lead. I 
believe that is an altogether different statement and different 
thing entirely from what Libra is and what we are talking about 
today, which I think has a number of contradictions inherent in 
the project itself.
    When your colleague was here last, he mentioned, and the 
White Paper suggests, that the goal is to transition to a 
permission-less blockchain. Is that still the ambition, because 
it seems like it might not be anymore?
    Mr. Zuckerberg. Congressman, I think that is the 
aspiration, over time.
    Mr. Gonzalez of Ohio. So, that is a ``yes,'' over time?
    Mr. Zuckerberg. It is the aspiration. In order to fulfill 
the financial inclusion mission, there are going to be some 
people who may not be--
    Mr. Gonzalez of Ohio. Reclaiming my time, I appreciate 
that. So it is a goal, but it is not necessarily written in 
stone. As I told him, I don't think you will ever get there, 
because I don't think you have any incentive to, frankly.
    But that being the case, in this current world, where it is 
controlled by the Libra Association, the claim has been made 
that we don't have to trust Facebook, we don't have to trust 
anybody, similar to a claim that would be made on 
cryptocurrency, which I think is a valid claim. But inherent in 
that is that we do, because it is controlled. It is controlled 
by a centralized organization, which is the Libra Association.
    How can you make the claim that the Libra Association will 
adhere to all regulations in all places, but have one 
centralized organization that is going to enforce the law that 
way?
    Mr. Zuckerberg. Sorry, Congressman. I am not sure I 
understand.
    Mr. Gonzalez of Ohio. You have the Libra Association, 
correct? The Libra Association regulates Libra, correct? And 
that is going to be one uniform system, presumably.
    Mr. Zuckerberg. Yes.
    Mr. Gonzalez of Ohio. One uniform code of regulations. You 
also claim that Libra will adhere to all regulations in the 
countries of jurisdiction. How can you make that claim, because 
surely we can have two different sets of regulations in the 
U.S. versus the EU, in one central organizing structure?
    Mr. Zuckerberg. Congressman, I need to clarify the 
distinction between Facebook's efforts and the independent 
Libra Association. I am speaking for Facebook and what we are 
going to do, when I am committing that we are going to comply 
with U.S. regulations, and we are not going to launch anything 
anywhere in the world until we have those regulations.
    Mr. Gonzalez of Ohio. And would you disassociate from the 
Libra project entirely if Libra is going on a path that goes 
against U.S. regulations?
    Mr. Zuckerberg. Congressman, I have testified that we 
would.
    Mr. Gonzalez of Ohio. Thank you. And then, the next thing 
that is a big concern for a lot of folks that I talk to is, you 
mentioned you are not going to mix social and payment data, 
right, and I think it is important to keep that distinction. I 
am a trust-but-verify kind of a person, so what regulatory 
oversight are you willing to sign up for to ensure that is the 
case, because I don't necessarily just trust you to do that.
    Mr. Zuckerberg. Congressman, my understanding is the FTC 
order that we just entered into means that we are going to have 
to certify that, at each level of the company, every manager 
who is overseeing a team that involves people's personal data 
is going to have to certify, on a quarterly basis, that, to the 
best of their knowledge, their team is upholding the privacy 
commitments that we have made. So we have made public privacy 
commitments around this, and we will have to certify that. That 
will go throughout the company and up to me, and I will have to 
certify as well.
    Mr. Gonzalez of Ohio. Thank you. And you are satisfied with 
that?
    Mr. Zuckerberg. Congressman, I think that is a pretty 
robust framework.
    Mr. Gonzalez of Ohio. I wasn't meaning to criticize; I was 
sincerely asking.
    And so the final point I guess I would make is, we are 
painting this as sort of, if we don't it, China will do it. I 
think you will be hard-pressed to find somebody who is more of 
a hawk on China in this committee, so I agree with that. What I 
don't think is the right frame is if Mark Zuckerberg and 
Facebook don't do it, then Xi Jinping will do it. Like, this 
isn't Mark Zuckerberg versus Xi Jinping. I think that is a 
totally different thing.
    And so framing it that way, I believe, is somewhat 
misleading to me. I want us to innovate in this space and I 
want us to own the future of this space, but as you rightly 
point out, I believe that having a centralized organization, 
i.e., Facebook, doing this, frankly, I don't trust it, and I 
don't believe the American people trust it. And so, I would 
encourage you to work on ways to decentralize so that there is 
no control whatsoever.
    With that, I yield back.
    Chairwoman Waters. Thank you. The gentlewoman from 
Michigan, Ms. Tlaib, is recognized for 5 minutes.
    Ms. Tlaib. Thank you so much, Madam Chairwoman. And thank 
you so much for being here, Mr. Zuckerberg.. I know this is 
going to be really hard in this setting, but try to see me as 
not just a Congresswoman, but also as a mother who is raising 
two Muslim boys in this pretty dark time in our world, as I ask 
you these questions, as well.
    For years, advocacy organizations, as you already know, 
have been pleading with you and your team to prohibit hate 
groups from using the Events page, which fuels violence against 
African Americans, Muslims, Jews, immigrants, and the LGBTQ+ 
community. And you claim you are very serious about addressing 
it. In 2018, before Congress, you stated, ``We do not allow 
hate groups on Facebook. If there is a group that their primary 
purpose or a large part of what they are doing is spreading 
hate, we will ban them from the platform overall.''
    Mr. Zuckerberg, yes or no, is it still your policy to ban 
hate groups?
    Mr. Zuckerberg. My understanding is yes.
    Ms. Tlaib. Okay. Facebook's community standard, right now, 
as it reads, says, ``We are committed to making Facebook a safe 
place.'' Very good. ``Expression that threatens people or has 
the potential to intimidate or exclude or silence others isn't 
going to be allowed on Facebook.''
    I want to refer to a photo up on the monitor right now, 
showing a man holding a rifle outside of a mosque, intimidating 
fellow Americans. Mr. Zuckerberg, yes or no, does this meet 
your community standards?
    Mr. Zuckerberg. Congresswoman, I am not sure I am in a 
position right now to evaluate any given post against all of 
the different standards that we have.
    Ms. Tlaib. White supremacist hate groups still regularly 
use the Events pages to organize threatening protests in front 
of mosques, and these protestors are often armed. The hateful 
rally in this picture was planned on a Facebook Events page.
    And I do want to submit for the record, Madam Chairwoman, a 
press release and statement from Muslim Advocates, a Muslim 
civil rights group, to Mr. Zuckerberg, ``Reported hate groups 
are still on Facebook,'' and then also a Newsweek article that 
says, ``Facebook Has Failed to Stop Anti-Muslim Hate Groups, 
Despite Mark Zuckerberg's Pledge.''
    Chairwoman Waters. Without objection, it is so ordered.
    Ms. Tlaib. Thank you, Madam Chairwoman. Why haven't you 
stopped hate groups from using your Events page, and are you 
endorsing these groups by leaving their Events page up?
    Mr. Zuckerberg. Congresswoman, thanks for raising this. 
This is an area that I think is very important and that I take 
very seriously. It is very hard to police every instance of 
this, and a lot of the content in the stories that you are 
talking about I would personally condemn. And I don't think 
that this is the type of thing that I want on any of our 
platforms, and I am committed to making sure that we continue 
to invest more and do a better job here.
    We are not perfect. We make a lot of mistakes. People share 
across our services more than 100 billion pieces of content a 
day. So even if we make mistakes on a relatively small percent, 
that is still a lot of mistakes, in both directions--things 
that we take down that shouldn't be taken down and things that 
we missed that we leave up that we should have gotten to. And 
this is a constant effort to do better.
    As the state of the art and the technology improves, 
certainly, the state of AI today, to be able to identify 
different things is so much better than it was 5 years ago. But 
this is really hard stuff. Even if you assume, for example, 
that the photo that you are saying would have been against the 
policies, even within that, we have nuances in the policies. 
Like, you might be allowed to share it if you are condemning 
it, which, of course, seems important. If there is some sort of 
racist attack, you would want people to be able to share a 
video condemning it, but you wouldn't want people to be able to 
share a video of that same attack, glorifying it and trying to 
encourage others to copy it. And that ends up being nuanced, 
kind of linguistic analysis.
    We operate in more than 100 countries around the world. 
This has been one of the areas that has been hard for us to 
execute as well, as I think you and I would like us to. But we 
are improving, and I think this is an area that I take very 
seriously.
    Ms. Tlaib. Thank you. Recently, Facebook has taken it a 
step further by permitting politicians to violate their 
community standards. Mr. Zuckerberg, why should the very 
politicians who lead our country be held to a lower standard 
for truthfulness and decency than the average American?
    Mr. Zuckerberg. Congresswoman, this isn't about helping the 
politicians. This is about making sure that people can see for 
themselves--
    Ms. Tlaib. I know, but, Mr. Zuckerberg--
    Mr. Zuckerberg. --what politicians are saying.
    Ms. Tlaib. --it is hate speech. It is hate, and it is 
leading to violence and death threats in my office. It is 
untruthful. And I understand that folks are working on it, 
right, on your team, but if it is leading to actual real 
violence towards people who are innocent, these are untruthful 
statements but also those that it is a pretty dark time in our 
country and we need to be able to play a part in reducing that 
violence.
    Mr. Zuckerberg. Chairwoman, do you mind if I add some 
context on that question?
    Chairwoman Waters. I'm sorry. The time has expired. We have 
people waiting. Thank you. We would like for you to answer in 
writing, though, any questions that you have not answered.
    The gentleman from Tennessee, Mr. Rose, is recognized for 5 
minutes.
    Mr. Rose. Thank you, Chairwoman Waters, and Mr. Zuckerberg, 
thank you for being here with us today.
    As I have listened to the questions and testimony today, I 
am reminded of a quote from one of the great entrepreneurs back 
in my home State of Tennessee, a guy by the name of Cal Turner, 
Sr., who once said, ``People will forgive you for anything 
before they'll forgive you for being successful.'' And I know 
you have faced a lot of criticism because of the great platform 
that you have built and the success that you have had.
    Facebook today is still a brand that is synonymous with 
social media, and not necessarily known for its financial 
instruments. Mr. Zuckerberg, I think there are still many 
unanswered questions about the Libra project, and I can 
appreciate how you and your team have tried to convey your 
intent to work with regulators before fully launching Calibra. 
And I applaud you for releasing the Libra White Paper back in 
June, but I am trained as a lawyer, and so it does raise a bit 
of concern to me that that White Paper still, to this day, is 
not dated or versioned in anyway.
    Before I get into my deeper comments, I wonder if that is 
something you all might address, so that as time goes forward 
we might be able to have that as a reference point, as we look 
back.
    Mr. Zuckerberg. Congressman, I think that is good feedback. 
Of course, as I have said a number of times today, I don't 
control the Libra Association, but I would personally agree 
that what you just suggested would be a good addition.
    Mr. Rose. Thank you. Today, Facebook carries with it some 
tremendous reputational risk. From your testimony here today, I 
know you recognize that. Between the risk Facebook carries 
itself, and some of the distrust many Americans, and even some 
of my colleagues here today have in our financial services 
industry, how do you plan to launch Calibra and Libra in a way 
that consumers will trust the technology? Because, although it 
has been documented that Calibra will be a regulated 
subsidiary, it is still just that, a subsidiary of Facebook. 
And for better or worse, even though there is a consortium of 
several players working to launch Libra, Facebook is still the 
name most people associate with this new financial instrument.
    Again, how do you plan to launch Calibra and Libra in a way 
that consumers will trust the technology?
    Mr. Zuckerberg. Congressman, a big part of this is the 
regulatory framework that is in place. Earlier this year, I 
wrote an op-ed calling for clear rules for the internet outside 
of this area, where there are already quite clear rules. But in 
a number of the other areas that we have talked about today, 
including, what more guidance on electoral advertising and some 
of the things we have to do there, as well as privacy and data 
portability.
    And I just think we are in a moment where too many 
important decisions, I think, are being made by these big 
internet companies, and I certainly feel this myself. I feel 
like we are making too many important decisions about speech, 
and I think that we would be better off if we had a clearer 
democratic process and clearer rules around some of these 
things.
    In the area of financial services, this is an area where 
there are already some quite clear regulations, and that means 
that people don't just need to trust what any given company is 
doing. They know that the government and the clear rules that 
have been democratically established are being followed.
    Mr. Rose. Thank you. There is tremendous work left to do, 
from a reputational standpoint, I would say to you, and I do 
wonder how successful Libra and Calibra can be while Facebook 
is still trying to regain its reputational footing. I think you 
have your work cut out for you, frankly.
    Like many of my colleagues here today, I have security 
concerns about cryptocurrency, especially how bad actors, like 
terrorist groups and networks, will use these products. I would 
like to ask you about some cyber risks with the Libra project 
and what you would do if things go wrong. And we don't have 
much time. But if, somehow, hackers find a way to hack the 
technology, who will be liable?
    Mr. Zuckerberg. Congressman, I think that depends on where 
exactly the security vulnerability is. And if it is within our 
services, then I would assume that we will be liable. If it is 
in another part of the independent Libra Association, then it 
might be someone else.
    But this is going to be something that I would imagine the 
regulators will review. This would create either financial 
stability or other types of concerns, that we have talked about 
today, and this is part of why I am committed to making sure 
that we don't ship anything, any service here, until we have 
clearance from all of the appropriate U.S. regulators.
    Mr. Rose. Thank you, Mr. Zuckerberg, and I hope as that 
process continues, you won't exclude Congress, where and when 
it is appropriate, for us to perhaps revisit some of the 
regulatory framework.
    Thank you, and I yield back.
    Chairwoman Waters. The gentlelady from California, Ms. 
Porter, is recognized for 5 minutes.
    Mr. Zuckerberg. Madam Chairwoman, could we have a break 
after this round, after this next 5 minutes, maybe? I am 
drinking a lot of water.
    [laughter]
    Chairwoman Waters. Thank you very much. If we will start 
the clock over, we are going to allow Ms. Porter to start her 
questioning, and then we will break right after that. I 
understand there is a vote, so I want to know what is happening 
with the vote issues. Thank you.
    Ms. Porter. Mr. Zuckerberg, as you know, Facebook can be 
sometimes an unkind place, both toward my personal appearance, 
and today apparently, toward your haircut. But as the mother of 
a teenage boy, I just want to say, thanks for modeling the 
short cut.
    You have said, ``We have a responsibility to protect our 
data, and if we can't, then we don't deserve to serve you.'' Do 
you remember making that statement?
    Mr. Zuckerberg. Congresswoman, yes.
    Ms. Porter. And Facebook's privacy principles say: one, we 
give you control of your privacy; two, you own and can delete 
your information; and three, we are accountable.
    Today, can you affirm that Facebook cares about user 
privacy and still holds itself to the standards it articulates 
in its public policies?
    Mr. Zuckerberg. Congresswoman, we certainly care about 
privacy. It is incredibly important to people.
    Ms. Porter. Super. If that is true that you care about 
privacy and you are hewing to these principles, why are you 
arguing, Facebook, in Federal court, that consumers can't hold 
you liable for any of these promises, because, ``as plaintiffs 
submit, they and every Facebook user are bound by Facebook's 
terms of service, which release Facebook from liability for 
users' contract and common law claims?''
    Mr. Zuckerberg. Congresswoman, I am not familiar with that 
specific legal argument.
    Ms. Porter. It is right there for you. You are arguing, in 
Federal court, that in a consumer data privacy lawsuit, in 
which your own lawyers admit that users' information was 
stolen, that the plaintiffs failed to articulate any injury. In 
other words, no harm, no foul. Facebook messed up, but it 
doesn't matter. Is that your position?
    Mr. Zuckerberg. Congresswoman, I am not familiar with all 
the context here, and I am not a lawyer, so it is a little bit 
hard for me to weigh in on the specifics.
    Ms. Porter. Mr. Zuckerberg, as CEO and the tremendously 
proportional shareholder of Facebook, you are responsible for 
the legal arguments that your company makes. You hire these 
lawyers. Will you commit to withdrawing this argument and this 
pleading and never again plead that there is no liability on 
Facebook when data breaches occur?
    Mr. Zuckerberg. Congresswoman, you are certainly right that 
I am CEO and I am responsible for everything that happens in 
the company. All that I am saying is that I imagine that there 
are more pages to this document, and--
    Ms. Porter. Okay. I am going to take that as a ``no'' for 
right now, but I would like you to consider it.
    Mr. Zuckerberg. I will.
    Ms. Porter. I think your pleading is inconsistent with your 
privacy principles, and I think that the American people are 
tired of this hypocrisy. I have been in Congress for 10 months, 
and I have already lost count of how many people have sat in 
exactly that chair and said one thing to me and to this 
Congress and then done another thing in Federal court.
    I want to turn to a different issue. Facebook is known as a 
great place to work--free food, ping pong tables, great 
employee benefits--but Facebook doesn't use its employees for 
the hardest jobs in the company. You have about 15,000 
contractors watching murders, stabbings, suicides, and other 
gruesome, disgusting videos for content moderation, correct?
    Mr. Zuckerberg. Congresswoman, yes, I believe that is 
correct.
    Ms. Porter. You pay many of those workers under $30,000 a 
year, and you have cut them off from mental health care when 
they leave the company, even if they have PTSD because of their 
work for your company. Is that correct?
    Mr. Zuckerberg. Congresswoman, my understanding is we pay 
everyone, including the contractors associated with the 
company, at least a $15-an-hour minimum wage, and in markets 
and cities where there is a high cost of living, that is a $20 
minimum wage. We go out of our way to offer a lot of--
    Ms. Porter. Thank you. I will take your word on the wage. 
Reclaiming my time, according to one report I have--and this is 
straight out of an episode of Black Mirror, these workers get 9 
minutes of supervised wellness time per day. That means 9 
minutes to cry in the stairwell while somebody watches them. 
Would you be willing to commit to spending one hour a day for 
the next year watching these videos, and acting as a content 
monitor, and only accessing the same benefits available to your 
workers?
    Mr. Zuckerberg. Congresswoman, we work hard to make sure 
that we give good benefits to all the folks who are doing this.
    Ms. Porter. Mr. Zuckerberg, reclaiming my time, I would 
appreciate a yes or a no. Would you be willing to act as a 
content monitor to have that life experience?
    Mr. Zuckerberg. I am not sure that it would best serve our 
community for me to spend that much time, but I have spent a 
lot of time looking at this content.
    Ms. Porter. Mr. Zuckerberg, are you saying you are not 
qualified to be a content monitor?
    Mr. Zuckerberg. No, Congresswoman. That is not what I am 
saying.
    Ms. Porter. Okay. Then you are saying that you are not 
willing to do it.
    How many lobbyists are on your payroll?
    Mr. Zuckerberg. Congresswoman, I don't know the answer to 
that.
    Ms. Porter. Sixty, so, 5 dozen lobbyists. I wanted to ask 
about the timing of your announcement this week to invest $1 
billion into housing charity on the day before your testimony 
before this committee. You may respond in writing. My time has 
expired.
    Chairwoman Waters. The committee will recess for 5 minutes.
    [brief recess]
    Chairwoman Waters. The committee will come to order.
    The gentleman from Texas, Mr. Gooden, is recognized for 5 
minutes.
    Mr. Gooden. Thank you. Mr. Zuckerberg, thanks so much for 
being here today.
    And I also want to thank the chairwoman for having this 
hearing. You have said a lot of things today that I don't think 
could have been said in the last hearing. It was important to 
have you here, and your responses to questions have been very 
direct and very helpful. So, thank you for that, and thank you 
very much for being here.
    I just had a few quick questions about the Libra 
Association. On the website, one of the benefits before Mr. 
Marcus appeared before our committee was that those who joined 
the association could derive dividends from Libra investment 
tokens, and that has since been taken off. Could you elaborate 
on that?
    Mr. Zuckerberg. Sure, Congressman.
    I think that there had been an idea that in order to 
encourage marketing of the payment service, there might be some 
investment that other companies could make into this and some 
return that they could make. But I think that idea has either 
morphed or been abandoned at this point.
    I am not sure exactly what the current state of it is, but 
is that what you are referring to?
    Mr. Gooden. Yes, that is. Do you think that is a reason 
some of these bigger name players pulled out of the 
association, or do you have a theory on that?
    Mr. Zuckerberg. Congressman, I don't think that is related, 
would be my guess. Those companies could have invested if they 
wanted to under that program, but I am not sure that they were 
planning to.
    Mr. Gooden. I kind of want to close on this line of 
Switzerland. I traveled with the chairwoman to Switzerland, and 
we found an environment there that seemed to be very pro 
bringing the association to Switzerland. And one of the things 
that was troubling to me was this idea that we have a great 
American company like Facebook and a great American success 
story like yourself who is pushing this idea on foreign soil.
    In your written testimony, one of the things you said is, 
``I believe this will extend America's financial leadership, as 
well as our democratic values and oversight, around the world. 
If America doesn't innovate, our financial leadership is not 
guaranteed.''
    Those are your words, and I agree with you. But why not 
bring this to the United States? Even if it means saying we 
tried this, we couldn't get our fellow Americans, we couldn't 
get Congress onboard, but we think we will have more success 
here at home. Why not give that a shot?
    Mr. Zuckerberg. Congressman, our subsidiary, Calibra, as 
well as a lot of the other independent--a lot of the other 
organizations are American. A lot of the work that we are doing 
is happening in America. The platforms that we are building, 
like WhatsApp and Facebook Messenger where people might be able 
to use Libra if the project moves forward, those are American 
products that carry our values, and it is contemplated that the 
reserve of the independent Libra Association be primarily 
American dollars.
    We have talked at length today about some of the reasons 
why it might make sense to headquarter an international 
association in a place that a lot of other international 
associations are headquartered. But I wouldn't take away from 
that that this isn't still going to be an American innovation 
that is extending America's financial leadership around the 
world.
    Mr. Gooden. I will just say this. Before this hearing, I 
kind of had two issues. One was some of the issues Facebook has 
had over the last few years. A lot of them have been voiced in 
this hearing today. And the other was the whole issue of moving 
this to Switzerland, and I just would say that I think you have 
done a good job answering our questions today.
    Any company as large as yours is going to have problems and 
will continue to have problems, and so I am not so much against 
the idea of Facebook pursuing an innovative idea like perhaps I 
was in the past, but it is difficult for me to get onboard with 
something that is so big being in another country. And I would 
implore you to consider bringing this home, perhaps as things 
move forward.
    You have said that you will pull out of the association if 
it goes in a direction you don't want it to go. I would argue 
that you have enough influence to bring this home and keep this 
American, and I would ask that you consider that.
    And I yield back.
    Chairwoman Waters. The gentlewoman from Iowa, Mrs. Axne, is 
recognized for 5 minutes.
    Mrs. Axne. Thank you, Madam Chairwoman, and thank you for 
being here, Mr. Zuckerberg.
    I asked my constituents what they would like me to ask you, 
and Madam Chairwoman, I would like to enter those questions 
into the record.
    Chairwoman Waters. Without objection, it is so ordered.
    Mrs. Axne. Thank you.
    I am going to talk about privacy in a second, but I want to 
start by reminding everybody here of Facebook's mission. It 
says your mission is to give people the power to build 
community and bring the world closer together.
    If your goal is to bring the world closer together, I 
believe that requires you taking your responsibility for our 
elections very seriously. I know yesterday you revealed new 
attacks from Russia and Iran, many of them targeting swing 
States, and I take those very personally because those are my 
constituents, and I would like you to keep that in mind when 
you are thinking about the people who are being targeted.
    I don't want to spend too long on this, but Facebook's size 
makes it a target for those kinds of attacks. And if Facebook 
is going to remain essential to how Americans communicate, I 
need you to work harder to prevent these kinds of attacks.
    But moving on, let us start with a couple of basics. How 
many American adults have a Facebook account?
    Mr. Zuckerberg. Congresswoman, actually, I don't know the 
exact breakdown off the top of my head. I can get back to you 
on that.
    Mrs. Axne. I believe U.S. and Canada combined is about 240 
million, or 85 percent of the adults. And the second question 
would be, I know substantially all of Facebook's $55 billion in 
revenue last year came from advertising, is that correct?
    Mr. Zuckerberg. Congresswoman, the vast majority comes from 
advertising. That is right.
    Mrs. Axne. Okay. So, $50 billion at least do you think 
comes from advertising?
    Mr. Zuckerberg. Yes.
    Mrs. Axne. And I believe this year you said you want to 
make sure that folks have an opportunity to control their data 
privacy. I believe you said this last year that you are going 
to make sure that folks have that opportunity even when they 
are not logged in to Facebook. Is that correct?
    Mr. Zuckerberg. Congresswoman, I am not sure what you are 
referring to. But in general, yes, I think people should have 
control over all of their information in all forms.
    Mrs. Axne. Do you collect data on people who don't even 
have an account with Facebook?
    Mr. Zuckerberg. Congresswoman, there are a number of cases 
where a website or app might send us signals from things that 
they are seeing, and we might match that to somebody who is on 
our services. But someone might also send us information about 
someone who is not on our services, in which case we likely 
wouldn't use that.
    Mrs. Axne. So you collect data on people who don't even 
have an account, correct?
    Mr. Zuckerberg. Congresswoman, I am not sure that is what I 
just said, but--
    Mrs. Axne. If you are loading up somebody's contacts and 
you are able to access that information, that is information 
about somebody who might not have a Facebook account, is that 
correct?
    Mr. Zuckerberg. Congresswoman, if you are referring to a 
person uploading their own contact list and saying that the 
information on their contact list might include people who are 
not on Facebook, then, sure. Yes, in that case, their 
information--
    Mrs. Axne. So, Facebook then has a profile of virtually 
every American, and your business model is to sell ads based on 
harvesting as much data as possible from as many people as 
possible. You said last year that you believed it was a 
reasonable principle that consumers should be able to easily 
place limits on the personal data that companies collect and 
retain.
    I know Facebook users have a setting to opt out of data 
collection and that they can download their information. But I 
want to remind you of what you said in your testimony, 
``Facebook is about putting power in people's hands.''
    If one of my constituents doesn't have a Facebook account, 
how are they supposed to place limits on what information your 
company has about them when they collect information about 
them, but they don't have the opportunity to opt out because 
they are not on Facebook?
    Mr. Zuckerberg. Congresswoman, respectfully, I don't agree 
with the characterization saying that if someone uploads their 
contacts--
    Mrs. Axne. That is just one example. I know that there are 
multiple ways that you are able to collect data for 
individuals. So I am asking you for those folks who don't have 
a Facebook account, what are you doing to help them place 
limits on the information that your company has about them?
    Mr. Zuckerberg. Congresswoman, my understanding is not that 
we build profiles for people who are not on our service. There 
may be signals that apps and other things send to us that 
include people who aren't in our community. But I don't think 
we include those in any kind of understanding of who a person 
is if the person isn't on our services.
    Mrs. Axne. I appreciate that. What actions do you know 
specifically are being taken or are you willing to take to 
ensure that people who don't have a Facebook account have that 
power to limit the data that your company is collecting?
    Mr. Zuckerberg. Congresswoman, what I am trying to 
communicate is that I believe that is the case today. I can get 
back to you on all of the different things that we do in terms 
of controls of services.
    Mrs. Axne. That would be great. Because we absolutely need 
some specifics around that to make sure that people can protect 
their data privacy.
    Mr. Zuckerberg, to conclude, Facebook is now tracking 
people's behavior in numerous ways, whether they are using it 
or not. It has been used to undermine our elections, and of 
course, I know you are aware Facebook isn't the most trusted 
name. I am asking you to think about what needs to be fixed 
before you bring a currency to market.
    Thank you.
    Chairwoman Waters. The gentleman from Virginia, Mr. 
Riggleman, is recognized for 5 minutes.
    Mr. Riggleman. Thank you, Madam Chairwoman, and thank you, 
Mr. Zuckerberg, for appearing today.
    It seems as though Facebook is somewhat of a regular 
fixture at the committee these days. Mr. Zuckerberg, my first 
question is simple, but very thought-provoking: How realistic a 
portrayal was, ``The Social Network?''
    [No response.]
    Mr. Riggleman. And the reason I ask that question, is I 
think we are getting to the beginning of ``The Social Network 
2,'' and I just want to be in charge of my own casting. I 
wanted that on the record right now, as we go forward.
    But I think your life story is impressive. I think with 
ingenuity and hard work, you can aspire to your dream and have 
the American Dream. However, I was part of the R&D 
infrastructure at the Office of the Secretary of Defense. I had 
to do a lot of rapid reaction or quick reaction capability 
development. So, I know the difficulty of trying to do 
something like this, especially in an agile process like you 
are doing.
    I have some real questions. When I was in the DOD, they 
played this thing called, ``stump the dummy,'' for me when I 
was trying to give a technical briefing. I will not do that 
today. I promise you that. I am going to ask some real 
questions here.
    You talked about the many countries--and I have a question, 
thanks, I looked it up, the power of Google: 170 million or so 
U.S. users, and 2.32 billion worldwide for Facebook.
    My first question is if this happens, and I know that 
Calibra is sort of an instantiation of Facebook and a wallet to 
hold an independent currency like Libra, right, is how I 
understand it. If you are in all of these separate countries--
and this is a technical question--do you believe it is possible 
to build a rule set or an algorithmic rule set, some kind of 
rule-based, machine-learning thing where you can comport or 
have the AML/BSA, the anti-money-laundering or bank security 
acts of each country sort of rolled into the algorithm when you 
buy Libra in that specific geographic entity or from that 
portion?
    I was wondering if that is something that is possible, that 
those rule sets could be built in automatically when you are 
actually logging in or building your Libra account through 
Calibra or through a wallet that might not be Calibra?
    Mr. Zuckerberg. Congressman, I think this is a good 
question. We are certainly looking at whether there are 
elements of the AML or KYC regulations that can be encoded at 
the network level and not just at the level of the individual 
wallets or payment companies involved.
    In terms of how this works in different countries around 
the world, what we find is that the American standard in 
regulations tends to be pretty strict, and that if we can build 
similar tools for verifying people's government IDs across the 
world in different places, and you can make a centralized 
investment in that and then have it apply in a number of 
places.
    And I think that if we comply with America's laws on this, 
then we will largely be in compliance with most of what needs 
to happen around the world. There may be some specific things 
that need to be done differently in some places, but I think 
the technical complexity would probably be relatively similar.
    Mr. Riggleman. Because I got the idea--we usually have 
prepared questions, but I am just riffing right now, because 
you talked about the renminbi, right, digitizing the renminbi, 
and we talked a little bit about the digital dollar. My 
question is this: When it comes to sort of anti-money-
laundering or illicit trafficking, my background was in Follow 
the Money, do you believe--and again, this is a technical 
question, not a how far we can go into this--do you believe it 
is possible on the AML side that you can tag the attributes of 
the transaction on those attributes rather than the entity 
itself to see if there is any nefarious activity with that 
specific token? In other words, by not going into the privacy 
portions of this, can we actually track what is happening with 
that token and at that point maybe look at if that token is 
doing something wrong without sort of identifying what the user 
is or the owner of Libra is for that transaction?
    Mr. Zuckerberg. Congressman, I think we likely will explore 
security measures like that. Just to analogize to another area 
of our work in kind of preventing nation-states from trying to 
interfere in the democratic process, that type of thing, of 
just looking at patterns of activity that kind of clusters of 
accounts are making so we can build these AI systems that can 
find amongst the billions of people who are using our services 
when a group isn't behaving in a way that a human would, and 
then we can pass that along to the FBI or the relevant law 
enforcement to help figure out what the right action to take 
is.
    That has certainly been one of the effective enforcement 
measures that you would be able to take. I would imagine that 
we will explore that here as well.
    Mr. Riggleman. So it's possible to tag maybe a portion of 
the attributes of the transaction attributes rather than the 
people who actually bought the Libra currency token itself, or 
there is a basket for the currencies. I have 15 seconds left. 
Next week, we will be talking about IP geolocation.
    I am excited about seeing how this goes along, but we are 
concerned based on AML and BSA, where you are going to go with 
this. But I thank you, and by the way, I just want to end with 
Tom Cruise. He will be playing me in ``The Social Network 2.''
    I yield back.
    Chairwoman Waters. The gentleman from Illinois, Mr. Casten, 
is recognized for 5 minutes.
    Mr. Casten. It is always a privilege to follow you, Mr. 
Cruise.
    [laughter]
    Mr. Casten. Thank you, Madam Chairwoman.
    And thank you, Mr. Zuckerberg.
    I understand about a month ago, you had a meeting in the 
Oval Office with the President and several Senators from both 
parties. Is that correct?
    Mr. Zuckerberg. That is correct.
    Mr. Casten. Was there a note taker present at that meeting?
    Mr. Zuckerberg. Congressman, I don't think that there were 
note takers at any of these meetings.
    Mr. Casten. Okay. So you are not aware if there is any 
record of what was discussed at that meeting?
    Mr. Zuckerberg. Congressman, I am not aware of any formal 
record.
    Mr. Casten. Okay. Did you or did the President at that 
meeting raise or discuss the antitrust investigations that are 
underway at the Department of Justice, the Federal Trade 
Commission, or the various State attorneys general?
    Mr. Zuckerberg. Congressman, I don't think so. But the 
meeting was private overall.
    Mr. Casten. And I understand there was no record. I am 
asking whether the subject came up.
    Mr. Zuckerberg. Congressman, those subjects didn't come up, 
but in general, I don't feel like it is appropriate for me to 
comment in too much detail on private conversations.
    Mr. Casten. We are in a public office. Did anyone discuss 
the policy change allowing the exemption of political figures 
and parties from misinformation, that prohibition on Facebook, 
in the course of the meeting?
    Mr. Zuckerberg. Congressman, no, that did not come up.
    Mr. Casten. I want to dive into that in a little bit more 
detail, not in the context of your meeting. If I understand 
your testimony here today, you have an aggressive posture 
against essentially allowing free speech, but blocking the 
speaker. For example, if Jenny McCarthy were to post something 
saying, don't get your kids vaccinated, would you take that 
down?
    Mr. Zuckerberg. Congressman, I think we probably would not 
take that down, but it is hard for me to comment on a 
hypothetical without looking at the actual post and looking at 
all the--
    Mr. Casten. So someone with a large platform who is 
spreading misinformation on your platform, you are saying you 
wouldn't take it down or you would? I thought you had earlier 
said that you would; it was only politicians you would limit 
that speech for?
    Mr. Zuckerberg. Congressman, in general, our policy is not 
to ban people from posting things that are false. You can say 
something on your page if you want. If an independent fact-
checker marks it as false, we will put a label on it that says 
that an independent fact-checker has marked it as false, and we 
will reduce the distribution and spread of it through the 
network.
    Mr. Casten. Let me follow up on my colleague, Ms. Tlaib's, 
comment. You said that you were trying to police and block hate 
crimes and hate speech. If a member of the American Nazi Party 
posted horrible anti-Semitic messages on Facebook, would you 
block that?
    Mr. Zuckerberg. Congressman, our policies against hate 
speech do lead to us taking down content completely. 
Misinformation--
    Mr. Casten. Okay, so now let me follow up. In the last 
election, Art Jones ran against Dan Lipinski in Illinois, a 
neighboring district to mine. He was a member of the American 
Nazi Party. Would he be allowed to speak on your platform in a 
different fashion than a member of the Nazi Party who is not 
running for elected office?
    Mr. Zuckerberg. Congressman, I am not familiar with who 
this person is.
    Mr. Casten. I am asking the question of whether you can 
spread hate speech if you are an elected official or trying to 
be an elected official, that you would not be allowed to if you 
were not in that capacity?
    Mr. Zuckerberg. Congressman, I think that depends on a 
bunch of specifics that I am not familiar with in this case, 
and can't answer to.
    Mr. Casten. Well, that is rather shocking.
    Mr. Zuckerberg. I can follow up--
    Mr. Casten. I don't think that is a hard question, but fair 
enough. Look, it strikes me, and let me just ask you some 
totally hypothetical questions. You don't have to answer any of 
these, and frankly, I don't think you want to answer any of 
them.
    Whether or not the First Amendment allows you to scream 
``fire'' in a crowded theater is an open question that we all 
struggle with, and how you define that. Whether or not the 
Libra is a bank or a credit card or a credit rating system and 
what regulatory environment it sits under is a hard question.
    You have the luxury and the privilege not to have to ask 
those questions and not to have to answer those questions. None 
of us on this side of the dais have that luxury. We have to 
figure that out. We have to sort that through.
    And you are a smart guy. You are a well-meaning guy. I have 
tremendous admiration for what you have built. But I would 
remind you of the wisdom of one of our great Supreme Court 
Justices, Louis Brandeis, who said, ``The greatest dangers to 
liberty lurk in the insidious encroachment by men of zeal, well 
meaning but without understanding.''
    One of my colleagues likes to ask everybody if they are a 
capitalist or a socialist. Justice Brandeis pointed out that 
when we have tremendous concentrations of power in our country, 
we only have three choices: we can allow that concentration of 
power to take over government, which is to embrace fascism; we 
can allow government to take over that concentration of power, 
which is to embrace communism; or we can embrace competition.
    Your luxury, sir, your privilege comes from the fact that 
as a country, those of us on this side of the dais have always 
chosen door number three, and I hope you have the wisdom to 
appreciate that.
    Thank you. I yield back.
    Chairwoman Waters. The gentleman from Minnesota, Mr. Emmer, 
is recognized for 5 minutes.
    Mr. Emmer. Thank you, Madam Chairwoman.
    Thank you, Mr. Zuckerberg, for being here and staying here 
throughout this entire process.
    Since I have the opportunity to help close out this 
hearing, I think I can safely say that this is at least the 
second time you have testified before Congress where Members 
end up looking like they have invested absolutely no time 
learning about new technologies in order to responsibly 
question tech companies.
    I think that is a fair takeaway from this hearing. Congress 
is nowhere close to catching up with some of the most basic 
changes happening in our society.
    And I would like to thank the Republican leader of the 
Financial Services Committee for the recent opportunity to 
serve as the ranking member of the Financial Technology Task 
Force. In this new role, I look forward to working with my 
colleague, Representative Lynch, to foster a competitive 
environment in which American innovation can flourish. This 
includes cryptocurrency, blockchain networks, and every area of 
FinTech.
    Mr. Zuckerberg, I have serious concerns about the structure 
of Libra and its establishment outside the United States. I 
also think it is incredibly important to distinguish Libra from 
cryptocurrency and truly decentralized open public networks. 
But what I am most concerned about is Congress and American 
regulators.
    Unfortunately, my colleagues have offered several proposals 
in conjunction with this hearing that could have a tremendously 
harmful impact on innovation in the United States. A few of 
these provisions appear to apply to securities regulation 
beyond actual securities.
    As co-Chair of the Blockchain Caucus, I frequently meet 
with entrepreneurs who try to follow the rules and never 
receive a clear answer from regulators that what they are doing 
is legal. It has not been clear whether innovators who play by 
the rules of the road will ever receive the assurances that the 
U.S. Government will not come after them. Clarity is incredibly 
necessary in securities law.
    We can support open public networks, and we can do so in a 
nonpartisan fashion. That is why I intend to introduce a bill 
that will make it clear that as long as you register as a 
security, or comply with an exemption under existing law, you 
will not continue to have prosecution from a regulator hang 
over your head when that asset is publicly distributed and, in 
fact, is a commodity.
    As lawmakers, it is our responsibility to explore all 
aspects of a platform like Libra that has the potential to 
impact so many and determine what, if any, laws should be 
passed to protect consumers while enabling businesses and the 
American economy to grow. If we don't lead in this area, others 
most certainly will.
    I am encouraged by new opportunities to address this issue 
and approach these types of innovations with a curious and open 
mind. It presents an exciting opportunity for commerce and 
remittances here in the United States and globally.
    We all understand that any new innovation presents risks. 
The Financial Stability Board just last week issued a detailed 
report of the various risks that should be considered when we 
look at something like Libra, the Libra platform that can be 
viewed as what is called a global stablecoin, or a potential 
global method of payment. These are serious risks that we, as 
lawmakers and as a committee, need to work through.
    But let me repeat that. We need to work through them. We 
should look at these issues, these opportunities, and these 
risks intelligently with input from experts in each of these 
areas. But what we should not do is immediately assume we need 
to ban them. The legislation identified for discussion during 
today's hearing would do just that.
    In your testimony, you present serious concerns with 
China's actions. I share this concern, but it should not come 
at the cost of even one single right of Americans, especially 
freedom of speech, assembly, and the right to due process. We 
can compete and excel beyond China not despite our freedoms, 
but because of them.
    Mr. Zuckerberg, apart from private, closed-door meetings, 
and being called to testify, what has Facebook done to engage 
the entire crypto community to help Congress and the regulators 
understand all of the innovations in this space and why it 
should be supported domestically?
    Mr. Zuckerberg. Thank you, Congressman. You are raising a 
number of important questions in here.
    This is part of the reason why we helped start the 
independent Libra Association. This is clearly an area where it 
can't just be one company operating by itself and trying to 
stand up a system like this, and a number of the other 
companies and organizations that are part of the Libra 
Association are companies that have been involved in the crypto 
community and were building great crypto companies and products 
for many years before we got into the space.
    I think some of them have come up here and talked to all of 
you about the work that they are doing, giving a diverse 
opinion on--I am representing my views on how I think that this 
can advance our economy and help lead to more financial 
inclusion and build good services for people. But I think over 
time, we will want more members of the Libra Association to--or 
whether we want them to or not, I think that they will be 
involved in helping to educate more folks as well.
    Mr. Emmer. Thank you. I appreciate it, and I look forward 
to continuing the discussion.
    Chairwoman Waters. The gentlewoman from Massachusetts, Ms. 
Pressley, is recognized for 5 minutes.
    Ms. Pressley. Thank you, Madam Chairwoman.
    I have always maintained that those closest to the pain 
should be closest to the power, driving and informing the 
policymaking. Now, one thing that is abundantly clear to me, 
Mr. Zuckerberg, is you are very close to the power, and that 
power is only growing.
    Although there is disagreement about who really created 
Facebook, you ultimately secured near unilateral control of the 
company. In fact, because of your control of 90 percent of 
Facebook's Class B shares, even if all other shareholders were 
to vote the same way, any proposal you don't support would 
still fail. All of that to say, Mr. Zuckerberg, Libra is 
Facebook, and Facebook is you.
    I know you understand the technological and business case 
for Libra. You have the stats, but I am not certain you know 
the stories and you understand the source of the pain that 
millions are experiencing, who are experiencing underbanking 
and credit invisibility.
    Mr. Zuckerberg, yes or no, in your adult life, have you 
ever been underbanked? Yes or no?
    Mr. Zuckerberg. I am going to go with, ``no.''
    Ms. Pressley. When I asked the head of Calibra about why 
people lacked bank accounts, he said he believed that 
``identity'' is a big problem. Yes or no, do you agree that 
authentication is the major hurdle to accessing the financial 
system?
    Mr. Zuckerberg. Congresswoman, I am not sure. I think it is 
probably different in different places around the world.
    Ms. Pressley. The same World Bank report cited in your 
Libra White Paper finds that almost two-thirds of 1.7 billion 
people who don't have bank accounts say it is because they lack 
enough money to open one. So, this is not about authentication. 
This is not about banking costs. This is about a tsunami of 
hurt that millions are experiencing because of a $1.6 trillion 
student debt crisis, because of rising healthcare costs and 
people having to use GoFundMe pages to pay medical bills. This 
is because of the racial and gender wealth gap.
    Again, you represent the power, but I don't think you 
understand the pain. There is underbanking because people are 
broke. And so, let me just ask you this question, yes or no, is 
it free to use the Calibra wallet?
    Mr. Zuckerberg. Congresswoman, the Calibra wallet isn't a 
service that is available today. Assuming we are able to launch 
it, it will be free.
    Ms. Pressley. So, there is no fee?
    Mr. Zuckerberg. Congresswoman, that is the goal is to make 
it so that--
    Ms. Pressley. So, there is no fee?
    Mr. Zuckerberg. Congresswoman, the goal is to make it--
    Ms. Pressley. Okay. Moving on, so if it costs money to buy 
Libra and costs money to use the Calibra wallet, I fail to see 
how this helps people with virtually no money. You are 
attempting to use technology to solve what is inherently an 
issue of wealth.
    At the end of the day, you are a business. What is in the 
business interest for you here, and do you believe in what you 
are building?
    Mr. Zuckerberg. Congresswoman, yes.
    Ms. Pressley. Yes or no, would you leave behind your 
children's inheritance in Libra? Do you believe in what you are 
building?
    Mr. Zuckerberg. Yes, I do. And it is--
    Ms. Pressley. Would you leave behind your children's 
inheritance in Libra? I think it is a fair question because--
    Mr. Zuckerberg. I think it is--
    Ms. Pressley. --you have proven that we cannot trust you 
with our emails, with our phone numbers. So, why should we 
trust you with our hard-earned money? If you can, answer yes or 
no, would you leave behind your children's inheritance in 
Libra?
    Mr. Zuckerberg. Congresswoman, I would, because it will be 
backed one-to-one by other sovereign currency.
    Ms. Pressley. All right. Moving on, I am running out of 
time here.
    Mr. Zuckerberg, your recent speech at Georgetown touched 
upon how you were affected by the start of the Iraq War when 
you were in college, and how, ``If more people had a voice to 
share their experiences, maybe things would have gone 
differently.''
    Earlier this year, you announced that Jennifer Newstead 
would join Facebook as general counsel. Ms. Newstead was the 
Chief Deputy in the Office of Legal Policy at the Department of 
Justice, and in the fall of 2001 was the day-to-day manager of 
the PATRIOT Act in Congress, according to John Yoo, author of 
the ``Torture Memos.''
    Ms. Newstead helped sell Congress on mass surveillance once 
already, and now she is advising you how to do it again. So, 
yes or no, is the PATRIOT Act reflective of your views on 
privacy and free speech? I have 10 seconds left; it is an easy, 
straightforward question. Is the PATRIOT Act reflective of your 
views on privacy and free speech?
    Mr. Zuckerberg. Congresswoman, there is a lot in there, and 
no, I do not agree with all of it.
    Ms. Pressley. Mr. Zuckerberg, that is not what your hiring 
choices indicate, and Maya Angelou told us a long time ago that 
when people reveal to you who they are, believe them.
    I yield back.
    Chairwoman Waters. The gentleman from Indiana, Mr. 
Hollingsworth, is recognized for 5 minutes.
    Mr. Hollingsworth. Good afternoon, Mr. Zuckerberg. I 
appreciate you being here, and I appreciate your thoughtful 
answers to many of the questions that have been posed and the 
the effort that you have undertaken.
    I actually do think you are really sympathetic to a lot of 
the plights around the world, including access to the financial 
system and some of the transaction costs associated with 
remitting money to individuals who may be far flung around the 
world. And I actually really do think that you care a lot about 
that, and I think your zeal and passion for mobilizing and 
harnessing technology to deliver better outcomes for a vast 
number of people is truly inspirational. And I appreciate the 
effort that you and many other people at Facebook and other 
technologies undertake every single day to empower people to 
live better lives.
    I wanted to ask in concert with that, I assume you and the 
others with you--and with Facebook in the Libra Association--
have made conscientious choices about the architecture of the 
technology to reflect what you are trying to do and lower those 
transaction costs and help intermediation across financial 
services. I wonder if you might talk about the technology a 
little bit and talk about the choices that you have made and 
how that reflects your genuine desire for this to be a tool of 
empowerment, a tool of connection, not an investment or a 
security or something like that. I wonder if you might talk 
about that for a second?
    Mr. Zuckerberg. Yes, thank you, Congressman.
    You are right that I think that there is an opportunity to 
build a new financial infrastructure, maybe not completely from 
the ground up, but take out a lot of the cruft that has been 
built up over the years. Having something that--
    Mr. Hollingsworth. Not that it is bad necessarily, what 
exists today, but it arose in an environment far different than 
what we have today?
    Mr. Zuckerberg. That is right. I agree with that. And this 
is the way that all systems work.
    Mr. Hollingsworth. Agreed.
    Mr. Zuckerberg. You build something up, and then more 
requirements get placed on it over time. You build more things.
    Mr. Hollingsworth. And technology advances enables us to 
jump over that, right?
    Mr. Zuckerberg. Absolutely.
    Mr. Hollingsworth. Right.
    Mr. Zuckerberg. I just think that we are in a different 
state of technology today, where some of the advancements in 
blockchain and some of the things that can be done 
decentralized, and in some cases, the combination of 
decentralized and centralized systems, which we are able to try 
to help facilitate here with Calibra and as part of the Libra 
Association, I think just allow a lot of the costs and 
inefficiency to be taken out of the system.
    I just think if you look at it today, you have your mobile 
phone. You have WhatsApp.
    Mr. Hollingsworth. Right.
    Mr. Zuckerberg. You can text someone around the world.
    Mr. Hollingsworth. Right.
    Mr. Zuckerberg. It is end-to-end encrypted. It gets there 
in less than a second, a lot less than a second.
    Mr. Hollingsworth. Right.
    Mr. Zuckerberg. It is easy to use. I just don't see why you 
shouldn't be able to send money in the same way. It should be 
able to get there quickly. It shouldn't take days to get there 
like current remittances do.
    Mr. Hollingsworth. Right.
    Mr. Zuckerberg. It should be free or extremely affordable. 
It may not be able to be completely free because we will have 
to comply with a lot of these regulations, and that will 
require people and work.
    Mr. Hollingsworth. Right, right.
    Mr. Zuckerberg. But just like the cost of text messages 
used to be very high before there was competition in that 
space, I think that the cost of money transfers should come 
down dramatically, too. And enabling that kind of competition 
and kind of a new way of thinking about the space is 
fundamentally what we are trying to go for.
    Mr. Hollingsworth. And I think that is right, and at least 
what I have read about some of the choices that have been made 
in the architecture behind the technology that reflects that 
desire, right? As you articulated, pegged to a basket of 
currencies, to be stable, not to be volatile, right?
    It is not truly a decentralized technology. It requires a 
central purpose. And I think that you have kind of built that 
architecture so that you can empower these individuals, and I 
think--look, it is really easy to talk about perhaps some of 
the demons that have been unleashed by technology, and it is 
really easy to forget the amazing advancements that we have 
been able to make as people, as humans, because of this 
technology. And I want this to reach more people around the 
world.
    You already have a tremendous network with, I don't know, 
2\1/2\ billion people connected to that network, right? The 
question is, what else can we connect to that network to make 
it not only more valuable for Facebook, not only more valuable 
for the association, but more valuable for each of those 
people?
    And to Ms. Pressley's point, each of those people who have 
felt for a long time disempowered, feel like they operate in a 
separate global economy than perhaps the developed world, they 
operate in a separate financial services system than the 
developed world.
    I believe in what you are trying to do, and I also take you 
at your word in saying that the goal is to comply. The goal is 
to get to the right outcome. The goal is to make a difference 
in people's lives.
    Facebook has already done that, and the fact that it 
reflects some of society's ills is not necessarily Facebook's 
fault. I think that we should reflect really carefully on 
ensuring we have the right crucible for developing this 
technology over time, and I appreciate the effort that you have 
undertaken with regard to that already.
    So, thank you for being here.
    Mr. Zuckerberg. Thank you.
    Chairwoman Waters. The gentleman from Utah, Mr. McAdams, is 
recognized for 5 minutes.
    Mr. McAdams. Thank you, Madam Chairwoman.
    Mr. Zuckerberg, in addition to my job as a Member of 
Congress, I hold the title, like you, of dad. I have 4 
children, ages 8, 11, and 14-year-old twins. And keeping them 
safe, not just for them, but for the thousands of kids who live 
in my district, is what I want to talk to you about today.
    Because the role online social networks play in the lives 
of our teenagers certainly causes me much stress and keeps me 
up at night. It is questions such as, who are my kids talking 
to online? Are they being groomed or exposed to illicit 
content? What does the exposure to what they see online mean 
for their physical and mental health development and their 
well-being?
    And I am sure these are questions and concerns that most 
parents have. So, I want to discuss the role that Facebook and 
other online social networks can play in keeping our kids safe. 
And I echo the points made earlier by my Republican colleague, 
Mrs. Wagner.
    A few weeks ago, the New York Times published a deeply 
troubling article on child sexual exploitation. The Times 
reported that technology companies, including Facebook, 
reported a record 45 million online photos and videos of child 
sexual abuse content last year. And Facebook specifically was 
responsible for the vast majority of reports of online sexual 
abuse materials, and thank you for your efforts to crack down 
on that.
    But Facebook Messenger alone was responsible for 65 percent 
of the reports, with roughly 12 million out of 18.4 million 
worldwide reports. I know you are aware of that report. The 
report also noted that only halfway through the year, a 
specialized law enforcement team had conducted 150 raids across 
my State of Utah in response to internet crimes against 
children and that they expect to arrest twice as many people 
this year compared to last year for crimes related to child 
sexual abuse material.
    This is clearly a problem in Utah, and a problem across our 
nation, and it isn't getting better. It is getting worse. Mr. 
Zuckerberg, yes or no, do you believe that online social media 
platforms such as Facebook have a role to play, even an 
obligation to ensure that their platforms are safe for our 
vulnerable populations, especially our children?
    Mr. Zuckerberg. Congressman, absolutely, and we do a lot of 
work on this. As you pointed out, I think the reason why the 
vast majority come from--
    Mr. McAdams. Yes, I saw your comments earlier to Mrs. 
Wagner to that effect, thank you.
    Mr. Zuckerberg. --Facebook is because we work to find this 
stuff.
    Mr. McAdams. And that is good to hear. Let us dig into the 
challenges on that, and the steps that Facebook is taking to 
ensure that our children remain protected.
    Mr. Zuckerberg, according to reports, WhatsApp has more 
average monthly users than Facebook Messenger, 1.6 billion to 
1.3 billion, respectively. But according to the New York Times 
report, Facebook Messenger reports roughly 65 percent of all 
sexual abuse reports, whereas, ``The data show that WhatsApp, 
the company's encrypted messaging app, submits only a small 
fraction of the reports that Messenger does.''
    I am curious as to why WhatsApp, your more popular 
messaging app, reports only a fraction of the incidents that 
Facebook Messenger does. Yes or no, is it in part because 
WhatsApp is encrypted end-to-end, whereas Facebook Messenger is 
currently not?
    Mr. Zuckerberg. Congressman, that is right. When the 
content is encrypted end-to-end, we can't actually see the 
content itself, so we have to do other measures to prevent bad 
connections between adults and minors.
    Mr. McAdams. That makes sense, thank you.
    Mr. Zuckerberg, earlier this year, you announced plans to 
move your Messenger app in the direction of WhatsApp by 
encrypting all communications sent over that app end-to-end. 
And I know, of course, there is a delicate balance between 
privacy and child safety, but I don't think this is an either/
or proposition. Facebook and other tech companies were founded 
with innovation at their core. I think we can have encryption 
and more secure messaging while still ensuring that we protect 
our children.
    That technology can play a role in keeping our children 
safe, even if the app is encrypted. I see great value in 
encryption technology and more secure data transmission, but I 
know that it comes with some risks. I am concerned about the 
move of Facebook Messenger to end-to-end encryption with the 
cryptocurrency rocket fuel if we don't get it right and the 
repercussions that it may have on our ability to stop predators 
who take advantage of our children.
    Seeing that my time is short, Mr. Zuckerberg, while I know 
that you are using some of your technologies to detect and 
delete explicit content, like AI, Facebook needs to be doing 
much more to protect our children. A move to encryption for 
Facebook Messenger will only proliferate the danger if not done 
correctly, all while giving you plausible deniability on what 
goes on on your platform.
    You can and should prioritize child safety as you move 
forward with privacy safeguards, and I urge you to work with 
child safety experts before taking any steps that could put our 
children in danger--45 million photos and videos last year of 
child sexual abuse material. We must do better. Our children 
deserve nothing less.
    Thank you.
    Chairwoman Waters. The gentlewoman from New York, Ms. 
Ocasio-Cortez, is recognized for 5 minutes.
    Ms. Ocasio-Cortez. It is good to see you, Mr. Zuckerberg. I 
think you, of all people, can appreciate using a person's past 
behavior in order to determine, predict, or make decisions 
about future behavior. And in order for us to make decisions 
about Libra, I think we need to kind of dig into your past 
behavior and Facebook's past behavior with respect to our 
democracy.
    Mr. Zuckerberg, what year and month did you personally 
first become aware of Cambridge Analytica?
    Mr. Zuckerberg. I am not sure of the exact time, but it was 
probably around the time when it became public. I think it was 
around March of 2018. I could be wrong, though.
    Ms. Ocasio-Cortez. When did Facebook COO Sheryl Sandberg 
become aware of Cambridge Analytica?
    Mr. Zuckerberg. I don't know, off the top of my head.
    Ms. Ocasio-Cortez. You don't know. Did anyone on your 
leadership team know about Cambridge Analytica prior to the 
initial report by the Guardian on December 11, 2015?
    Mr. Zuckerberg. Congresswoman, I believe so, and that some 
folks were tracking it internally. I am actually--as you are 
asking this, I do think I was aware of Cambridge Analytica as 
an entity earlier. I just don't know if I was tracking how they 
were using Facebook specifically.
    Ms. Ocasio-Cortez. When was the issue discussed with your 
board member, Peter Thiel?
    Mr. Zuckerberg. Congresswoman, I don't know that, off the 
top of my head.
    Ms. Ocasio-Cortez. You don't know. This was the largest 
data scandal with respect to your company that had catastrophic 
impacts on the 2016 election, and you don't know?
    Mr. Zuckerberg. Congresswoman, I am sure we discussed it 
after we were aware of what happened.
    Ms. Ocasio-Cortez. Okay. You announced recently that the 
official policy of Facebook now allows politicians to pay to 
spread disinformation in 2020 elections and in the future. I 
just want to know how far I can push this in the next year. 
Under your policy, using Census data as well, could I pay to 
target predominantly Black ZIP Codes and advertise the 
incorrect election date?
    Mr. Zuckerberg. No, Congresswoman, you couldn't. We have 
even for these policies around the newsworthiness of content 
that politicians say and the general principle that I believe 
that--
    Ms. Ocasio-Cortez. But you said that you are not going to 
fact-check my ads?
    Mr. Zuckerberg. If anyone, including a politician, is 
saying things that are calling for violence or could risk 
imminent physical harm or voter or Census suppression, when we 
roll out the Census suppression policy, we will take that 
content down.
    Ms. Ocasio-Cortez. So, there is some threshold where you 
will fact-check political advertisements. Is that what you are 
telling me?
    Mr. Zuckerberg. Congresswoman, yes, for specific things, 
like that where there is imminent risk of harm.
    Ms. Ocasio-Cortez. Could I run ads targeting Republicans in 
primaries, saying that they voted for the Green New Deal?
    Mr. Zuckerberg. Sorry. Can you repeat that?
    Ms. Ocasio-Cortez. Would I be able to run advertisements on 
Facebook targeting Republicans in primaries, saying that they 
voted for the Green New Deal? If you are not fact-checking 
political advertisements--I am just trying to understand the 
boundaries here, what is fair game.
    Mr. Zuckerberg. Congresswoman, I don't know the answer to 
that off the top of my head.
    Ms. Ocasio-Cortez. So you don't know if I will be able to 
do that?
    Mr. Zuckerberg. I think you probably will be able to.
    Ms. Ocasio-Cortez. Do you see a potential problem here with 
a complete lack of fact-checking on political advertisements?
    Mr. Zuckerberg. Congresswoman, I think lying is bad, and I 
think if you were to run an ad that had a lie, that would be 
bad. That is different from it being, in our position, the 
right thing to do to prevent your constituents or people in an 
election from seeing that you had lied.
    Ms. Ocasio-Cortez. So you won't take down lies, or you will 
take down lies? That one is just a pretty simple yes or no?
    Mr. Zuckerberg. Congresswoman, in--
    Ms. Ocasio-Cortez. I am not talking about spin. I am 
talking about actual disinformation.
    Mr. Zuckerberg. Yes. In most cases, in a democracy, I 
believe that people should be able to see for themselves what 
politicians that they may or may not vote for are saying and--
    Ms. Ocasio-Cortez. So you won't take them down?
    Mr. Zuckerberg. --judge their character for themselves.
    Ms. Ocasio-Cortez. So you may flag that it is wrong, but 
you won't take it down?
    Mr. Zuckerberg. Congresswoman, it depends on the context 
that it shows up in--organic posts, ads, the treatment is a 
little different.
    Ms. Ocasio-Cortez. One more question. In your ongoing 
dinner parties with far-right figures, some of whom advance the 
conspiracy theory that white supremacy is a hoax, did you 
discuss so-called social media bias against conservatives, and 
do you believe there is a bias?
    Mr. Zuckerberg. Congresswoman, sorry, I don't remember 
everything that was in the question.
    Ms. Ocasio-Cortez. That is all right. I will move on. Can 
you explain why you have named the Daily Caller, a publication 
well-documented with ties to white supremacists, as an official 
fact-checker for Facebook?
    Mr. Zuckerberg. Congresswoman, sure. We actually don't 
appoint the independent fact-checkers. They go through an 
independent organization called the Independent Fact-Checking 
Network that has a rigorous standard for whom they allow to 
serve as a fact-checker.
    Ms. Ocasio-Cortez. So you would say that white supremacist-
tied publications meet a rigorous standard for fact-checking?
    Thank you.
    Mr. Zuckerberg. Congresswoman, I would say that we are not 
the one assessing that standard. The International Fact-
Checking Network is the one who is setting that standard.
    Chairwoman Waters. Thank you. The gentlewoman from 
Virginia, Ms. Wexton, is recognized for 5 minutes.
    Ms. Wexton. Thank you, Madam Chairwoman, and thank you, Mr. 
Zuckerberg, for sticking around and answering all of our 
questions today. I know it has been a long day.
    Just so I am clear on the difference between Libra and 
Calibra, Libra is a global coin or currency or a global payment 
system, as you called it in your earlier testimony. Is that 
correct?
    Mr. Zuckerberg. Congresswoman, that is correct.
    Ms. Wexton. And it is going to be tied to a basket of 
commodities or currencies, and it is going to be backed by 
assets of the members of the Libra Association. Is that 
correct?
    Mr. Zuckerberg. Congresswoman, that is the current 
thinking, although as we have discussed in testimony today--
    Ms. Wexton. The current plan. It is--
    Mr. Zuckerberg. --there are other ways--
    Ms. Wexton. Right. It is still fluid. It is still a fluid 
thing. And it is going to be monitored and handled by the Libra 
Association, which is a not-for-profit entity, correct?
    Mr. Zuckerberg. Congresswoman, the reserve for, I believe, 
repayment system will be handled by the independent Libra 
Association, that is correct.
    Ms. Wexton. And that is a not-for-profit, right?
    Mr. Zuckerberg. That is correct.
    Ms. Wexton. You mentioned that several times in your 
testimony.
    Mr. Zuckerberg. Yes.
    Ms. Wexton. Calibra is the digital wallet. It is where 
somebody is going to put their Libra. Correct?
    Mr. Zuckerberg. Yes, Congresswoman. Calibra is our--
    Ms. Wexton. And that is a wholly owned subsidiary of 
Facebook. Correct?
    Mr. Zuckerberg. That is correct.
    Ms. Wexton. Okay. And that Calibra is a for-profit entity, 
right?
    Mr. Zuckerberg. That is correct.
    Ms. Wexton. Okay. I guess I am just kind of a little bit 
curious about how you are going to make your money, what the 
business model is. Do you anticipate that you are going to 
collect fees from vendors, much like a credit card processor, 
or are you going to mine data and use that to monetize the data 
that you get from people's purchases, or all of the above?
    Mr. Zuckerberg. Congresswoman, we are not going to share 
payment information from Calibra to the rest of Facebook for 
personalizing services. There are just a small number of 
limited cases where we might have to share data if overall 
security or tax law requires it.
    Ms. Wexton. So, how are you going to make money?
    Mr. Zuckerberg. The basic method here is through 
advertising overall. And the way that this is going to work--
    Ms. Wexton. So you will still use that data for advertising 
purposes?
    Mr. Zuckerberg. Congresswoman, no, sorry. If you will give 
me a moment?
    Ms. Wexton. Actually, I am going to reclaim my time, 
because my time is about halfway up.
    A couple of days ago, Facebook released its plan to protect 
the 2020 elections. I assume you are familiar with this 
document, ``Helping to Protect the 2020 U.S. Elections?''
    Mr. Zuckerberg. Yes.
    Ms. Wexton. Okay. The plan doesn't mention deepfakes, but 
it does talk about misinformation. I assume deepfakes would 
fall under this umbrella of misinformation, according to your 
plan here?
    Mr. Zuckerberg. Congresswoman, they could, and we are also 
working on a separate deepfakes policy as well for when it 
would be appropriate to take that action. Yes.
    Ms. Wexton. Do you understand there is a difference between 
misinformation and disinformation? Are you aware of that, that 
there is a difference between those two concepts? 
Misinformation is false information that is spread, regardless 
of whether there is intent to mislead. Disinformation is 
deliberately misleading information, manipulated narrative, or 
propaganda.
    Are you aware that there is a difference between those two 
concepts?
    Mr. Zuckerberg. Congresswoman, yes.
    Ms. Wexton. Okay. But do you believe it is not your 
position to get into what the intent of any kind of poster is 
in putting that information out there?
    Mr. Zuckerberg. Congresswoman, it is not that it is not our 
responsibility or that it is not good to take that into 
account. It is just that it is much harder to determine intent 
at scale, and I gave this example--
    Ms. Wexton. Okay. And I have an example, actually. We all 
saw the manipulated video of Speaker Pelosi that was posted on 
Facebook and reposted by a number of other folks. That was 
obviously digitally manipulated content. Now, that came out 
before this policy started. So did it have a third-party 
independent review to determine whether it was manipulated or 
not?
    Mr. Zuckerberg. Congresswoman, it did have a third-party 
fact-checker review it.
    Ms. Wexton. And how long did that fact-checking review 
take?
    Mr. Zuckerberg. I don't know how long the review took, but 
there was an operational mistake on our side which took too 
long for us to flag it for a fact-checker to look at. So, once 
we had flagged it for the fact-checker--
    Ms. Wexton. Okay. And then once the information came out 
that that was an altered video and it was essentially a fake 
video, who made the decision to leave it up?
    Mr. Zuckerberg. Congresswoman, our policy is that for 
misinformation, we don't--
    Ms. Wexton. I understand that that is the policy, but was 
there a recommendation that the video be taken down at any 
point in that process?
    Mr. Zuckerberg. Congresswoman, the policy is fairly clear 
on how we should act with that.
    Ms. Wexton. Were you involved in making a decision about 
whether that video came down or whether it remained up?
    Mr. Zuckerberg. Congresswoman, yes. And part of this was, 
okay, this is what our policy is now and recognizing that this 
example, among others, highlighted for us that we need a 
separate deepfake policy that may be different from how we 
treat ordinary misinformation. And that is what we are working 
on now. We have started by implementing this Deepfake Challenge 
to work on technical solutions for identifying deepfakes and 
figuring out what they are, and that is how we are proceeding 
on that.
    Ms. Wexton. You had me at ``yes,'' Mr. Zuckerberg. Thanks.
    Mr. San Nicolas. [presiding]. The gentlewoman from 
Pennsylvania, Ms. Dean, is recognized for 5 minutes.
    Ms. Dean. Thank you, Mr. Chairman.
    And thank you, Mr. Zuckerberg, for being here before our 
committee.
    Mr. Zuckerberg, does Facebook do any business with Trump 
International Hotel here in Washington, D.C.?
    Mr. Zuckerberg. Congresswoman, I do not know the answer to 
that.
    Ms. Dean. There have been public reports of enterprises and 
even governments doing business with Trump hotels to curry 
favor with the Administration. Do you think you could get us 
the answer to whether or not you have been doing any business, 
Facebook, your company, has been doing any business with the 
hotel?
    Mr. Zuckerberg. Congresswoman, I will look into it with my 
team.
    Ms. Dean. And you will be able to get us data and 
information?
    Mr. Zuckerberg. My team will follow up with you.
    Ms. Dean. Is there any chance that Facebook actually books 
blocks of rooms at Trump International Hotel and does not use 
them?
    Mr. Zuckerberg. Congresswoman, I would be very surprised to 
hear if that were the case.
    Ms. Dean. Who in your company would be in charge of the 
people who would do such bookings?
    Mr. Zuckerberg. Congresswoman, I am not even sure, because 
I would be very surprised if that were a thing that we would 
do. I am not sure what team would be in charge of a thing that 
I don't think we are doing.
    Ms. Dean. But you don't know? You have no idea?
    Mr. Zuckerberg. Congresswoman, I have certainly never heard 
of anything like that happening. I will confirm it after this.
    Ms. Dean. But you don't know if Facebook has booked for any 
occasion a room or a block of rooms at Trump International 
Hotel?
    Mr. Zuckerberg. Congresswoman, what I am saying is I am not 
aware of that. It is hard for me to sit here and know all of 
the things that our organization hasn't done.
    Ms. Dean. So to be clear, you don't have any knowledge of 
that?
    Mr. Zuckerberg. That is correct.
    Ms. Dean. Even though what you are proposing here, Libra, 
will most likely be regulated by Congress and by this Trump 
Administration. Is that correct?
    Mr. Zuckerberg. Congresswoman, that is correct.
    Ms. Dean. And we do know that enterprises and even foreign 
governments have booked rooms at Trump Hotel, and there is a 
real concern about currying favor with the Administration by 
doing business there. Do you worry about that, too?
    Mr. Zuckerberg. Congresswoman, I have seen the stories, and 
I--
    Ms. Dean. Do you worry about that, too?
    Mr. Zuckerberg. I understand the concern, yes.
    Ms. Dean. Do you share the concern?
    Mr. Zuckerberg. Congresswoman, yes. If someone is trying to 
inappropriately curry favor, that is bad.
    Ms. Dean. I look forward to your sharing that information 
with this committee.
    Let us move on to the role of trust. Federal Reserve Board 
Chairman Jerome Powell said Libra faces many serious concerns 
regarding privacy, money laundering, consumer protection, and 
financial security, trust. Before we move forward to Libra, why 
don't we look back on the issue of trust and you and Facebook?
    As you know, from 2009 until 2011, there were many 
complaints against Facebook, and in 2011, you, Facebook, agreed 
to settle with the FTC regarding deceptive practices, at least 
8 counts of wrongdoing, breaches of privacy. In 2012, the FTC 
accepted a final settlement with you, Facebook, because 
Facebook said you could keep your customers' information 
private and that you would agree to accept or require their 
expressed consent before sharing information.
    Is that correct? That was your 2012 agreement?
    Mr. Zuckerberg. Congresswoman, that sounds roughly correct.
    Ms. Dean. That was a consent decree with the Federal 
Government. You think that is roughly correct?
    Mr. Zuckerberg. That sounds roughly correct.
    Ms. Dean. Did you live up to that?
    Mr. Zuckerberg. Congresswoman, I think that is up to our 
regulator to decide. I think we have certainly made--
    Ms. Dean. Are you aware of your July settlement for a fine 
of $5 billion?
    Mr. Zuckerberg. Of course.
    Ms. Dean. You are aware?
    Mr. Zuckerberg. Of course.
    Ms. Dean. From 2009 until this very year, while under a 
consent decree to clean up your credibility with your customers 
to protect their privacy, to protect them from deceptive 
practices, you failed to do that for 10 years. Am I correct?
    Mr. Zuckerberg. Congresswoman, I wouldn't agree with that 
characterization.
    Ms. Dean. But you settled for $5 billion in recognition of 
that failure. I will move on.
    Given your history, why should Congress, regulators, and 
the public trust you to create what amounts to the world's 
largest bank, what really amounts to a shadow sovereign 
government? Why would we want you to do that?
    Mr. Zuckerberg. Congresswoman, we are not creating a bank. 
We are helping an organization create a payment system, and I 
don't think that regulators--
    Ms. Dean. A payment system of shadow currency that really 
would operate more like a government. And I want to quote you, 
``In a lot of ways, Facebook is more like a government than a 
traditional company. We have this large community of people, 
and more than other technology companies, we are really setting 
policies.''
    More like a government, right? That is Facebook.
    I see I have very little time left. I am going to end with 
an expression that my son taught me recently, that we earn 
credibility drop by drop, but we pour it away in buckets. I 
suggest and my hope is that Facebook will go back to earning 
credibility drop by drop from those very customers you profit 
from.
    Thank you very much.
    Mr. San Nicolas. The gentlewoman from North Carolina, Ms. 
Adams, is recognized for 5 minutes.
    Ms. Adams. Thank you very much, Mr. Chairman.
    And thank you, Mr. Zuckerberg.
    Today, my colleagues and I have asked a lot of questions 
about trust. You just heard one. Facebook is playing a game of 
catch-up to build user trust, especially among the African-
American community in the United States. And according to a 
report produced for the Senate Intelligence Committee, the 
Russian influence campaign on social media in 2016 in that 
election made an extraordinary effort to target African 
Americans.
    They used an array of tactics to try to suppress turnout 
among Democratic voters and unleashed a blizzard of activity on 
Instagram, which you also own, that rivaled or exceeded its 
posts on Facebook. And so the report states that no single 
group of Americans was targeted by IRA information operatives 
more than African Americans.
    As a Black woman who has fought my entire life against 
voter suppression efforts and tactics, I implore you to ensure 
your platform does not become a dark place for fringe elements 
to amplify hate, racism, and bigotry, or otherwise allow those 
that would wish to do harm to exploit the very real racial 
tensions that still exist in America today.
    My question is specifically how will Facebook work to 
monitor the current platforms and Libra to ensure that you are 
not creating yet another avenue for bad actors and 
cyberterrorists who are currently using Facebook's platform to 
upend our national security, to exploit our cultural divisions, 
to suppress voter turnout, or otherwise interfere in our 
democratic systems?
    Mr. Zuckerberg. Thank you, Congresswoman.
    I will first address the elections point, and then I will 
talk about the approach that we are taking with Libra, if that 
is okay.
    On elections, we were certainly, and unfortunately, on our 
back foot in 2016. And while we were looking for certain types 
of security threats like hacking and when we found that the 
Russian government was engaged in that, we identified folks 
like the FBI and the DNC, when we found that. But we weren't at 
the time looking for these kind of coordinated information 
operations.
    Since then, we have now built very sophisticated systems to 
identify this kind of behavior that we believe are more 
sophisticated than what any other company is doing and, 
frankly, a lot of governments. This Monday, we proactively 
identified on our own a new and sophisticated set of attacks 
coming from Russia and Iran, which while that shows that these 
governments are still trying to engage in this kind of election 
interference, it also, I hope, will give us some confidence 
that we can now more proactively identify these threats and nip 
them in the bud.
    On Libra--do you want me to address Libra or--
    Ms. Adams. Quickly, because I have another question.
    Mr. Zuckerberg. Okay. I think that we are aware over the 
last few years where we have had a number of challenges that we 
are now to--a lot of what we do is too kind of central to the 
democratic process and to society for us to just kind of go off 
on our own and come up with what we think the answer is and 
show up and launch it.
    That is why with Libra, what we are doing is we launched 
a--we wrote a White Paper, co-wrote this White Paper in order 
to invite this conversation because we knew that this is very 
sensitive. There are a lot of issues that we need to work 
through, and we wanted to do so in an open way and--
    Ms. Adams. Let me stop you there, if you don't mind. I want 
to ask you another question. I will send it to you in writing, 
too. But with the recent settlement on the employment 
discrimination charges, the current lawsuit by HUD for 
international discrimination and evidence indicating Facebook 
and its various algorithms are still intentionally 
discriminating based on race. So why should Members of Congress 
or regulators or the public trust that Facebook would not 
intentionally discriminate in its offerings with Libra? How can 
we trust that?
    Mr. Zuckerberg. Congresswoman, on principle, that is not 
something that we would ever want to do or would be in our 
interest to do. But this is also why there is regulation.
    I think part of the challenge right now that internet 
companies and particularly us face is that there is not 
sufficient regulation in a number of areas where we operate. I 
think we need Federal privacy legislation. I think we need data 
portability legislation. I think clearer rules on elections-
related content would be helpful, too, because it is not clear 
to me that we want private companies making so many decisions 
on these important areas by themselves.
    Ms. Adams. On the algorithm biases on your platform, how 
will you address them?
    Mr. Zuckerberg. As part of the settlement that we made with 
the NFHA and civil rights groups, we have agreed to study this 
in depth. The first thing that we need to figure out is what 
the right way to study it is, because right now, we actually 
don't know the race and ethnic background of people in our 
community, and it is not clear that people want us to track 
that.
    So I think we need to figure out the right way to do this 
research so we can understand if there is any disparate impact 
and how to mitigate it.
    Ms. Adams. I am out of time. Thank you very much.
    Mr. San Nicolas. The gentleman from Illinois, Mr. Garcia, 
is recognized for 5 minutes.
    Mr. Garcia of Illinois. Thank you, Mr. Chairman, and thank 
you, Mr. Zuckerberg, for being here today.
    When your representative from Facebook Libra was here a 
little over a month ago, Mr. Marcus, I heard three really 
positive things about Libra. One, that it is a nonprofit 
organization and one of the aims of creating this project 
includes banking the unbanked or the underbanked. And two, 
creating a more stable system for transferring money. As an 
immigrant, I appreciate all of those things.
    You have said that Libra and Calibra will follow Federal 
laws and regulations. However, you have not been clear on which 
laws and regulations apply to your project. For example, you 
told Mr. Perlmutter earlier today that you were not seeking a 
bank charter.
    If you could answer yes or no, should Libra be regulated as 
a bank?
    Mr. Zuckerberg. Congressman, I don't believe so.
    Mr. Garcia of Illinois. Yes or no?
    Mr. Zuckerberg. I don't believe so. Libra is a payment 
system, not a bank.
    Mr. Garcia of Illinois. So, that is a, ``no.'' In addition, 
questions have been raised about whether or not U.S. securities 
laws apply to a stablecoin like Libra. Another yes-or-no 
question, should Libra be regulated by the Securities and 
Exchange Commission (SEC)?
    Mr. Zuckerberg. Congressman, my understanding is that the 
SEC is currently discussing this. We believe that it is not a 
security--
    Mr. Garcia of Illinois. Do you think that you ought to be 
regulated by the SEC, yes or no?
    Mr. Zuckerberg. Certainly, they get to decide whether they 
believe that it is a security--
    Mr. Garcia of Illinois. Okay. You won't answer the 
question. Mr. Zuckerberg, you are unable to give clear answers 
about which laws should apply to your project, which is 
concerning to me, given your advertising monopoly and your 
corporate power. Whenever we have blurred the lines between 
commerce and banking in this country, we have run into 
problems.
    That is why I am introducing the Keep Big Tech Out of 
Finance Act today. I don't think that we can trust you. In 
2012, the FTC caught you breaking the law, told you not to do 
it again, and then you did it again. You did not give a 
deposition to the FTC as part of that investigation. The FTC's 
Associate Director of Enforcement has said that if you had 
testified under oath, it would have opened up, ``a huge amount 
of litigation outside of the FTC.''
    Maybe that helps us understand the $5 billion payment. It 
is concerning that as part of the FTC settlement, you and other 
Facebook executives were absolved of personal responsibility 
for all the wrongdoing during the covered period.
    Mr. Zuckerberg, you have unilateral control over Facebook, 
with nearly 60 percent of the voting shares. As other 
colleagues have mentioned, Facebook acts as a de facto 
government with you at the helm. You are not accountable even 
to your shareholders on your board. And throughout the day, we 
have heard how you evaded accountability even when the 
government has attempted to hold Facebook accountable for its 
violations.
    Facebook's reach and power is now so significant that 
former U.N. Ambassador Samantha Power recently pointed out that 
Facebook is worth more than 137 countries in the United 
Nations. Mr. Zuckerberg, how much wealth and power is too much 
for a single private corporation, and how much wealth and power 
is too much for you?
    Mr. Zuckerberg. Congressman, I think you may misunderstand 
my motive. I am certainly not doing this because I am trying to 
make more money. I have committed that I am going to give 99 
percent of the Facebook shares away during my life to 
philanthropic causes through the Chan Zuckerberg Initiative 
with my wife. So, making money is certainly not my main motive 
here.
    I am trying to use the position that I have to do things 
that I think are going to make the world better, and they are 
going to improve people's lives. And I would hope that that is 
what you would want me to do. We are in a unique position.
    Mr. Garcia of Illinois. Thank you for your answer.
    Let me just say this. From all that I have heard in the 
last month plus coming into this hearing and your testimonies 
this morning, this afternoon, I think that Facebook has 
acquired too much power, it has become too big, and we should 
seriously consider breaking it up.
    Thank you. I yield back, Mr. Chairman.
    Mr. San Nicolas. The gentlewoman from Texas, Ms. Garcia, is 
recognized for 5 minutes.
    Ms. Garcia of Texas. Thank you, Mr. Chairman, and thank 
you, Mr. Zuckerberg, for sticking with us. And you are coming 
close to the end, and I had a lot of the questions on my list 
that others have asked. So I will do follow-up on several of 
those.
    I want to just start by picking up on something my 
colleague from Illinois has asked, Mr. Garcia. Do you agree 
that Libra is a stablecoin?
    Mr. Zuckerberg. Congresswoman, I think you--
    Ms. Garcia of Texas. Yes or no would be fine.
    Mr. Zuckerberg. I think you could characterize it as a 
stablecoin.
    Ms. Garcia of Texas. It is a stablecoin?
    Mr. Zuckerberg. I think so.
    Ms. Garcia of Texas. Okay. Well, we can agree on that. 
Again, following up on Representatives Maloney and Foster, who 
asked you about anonymous wallets, do you think they should be 
allowed to exist on the Libra network?
    Mr. Zuckerberg. Congresswoman, I think that there are some 
competing equities here, and I think allowing some amount of 
that to exist could facilitate the goal of financial inclusion. 
But I also understand that that increases some risk.
    Ms. Garcia of Texas. The risks are high, and I think that 
you were asked that question from one of my colleagues on the 
other side of the aisle in terms of compliance with anti-money-
laundering laws. And of course, it is a huge concern, and like 
Mr. Vice Chairman, I, too, traveled with the chairwoman abroad, 
and we did talk to Germany, who has now said that they will bar 
you from their country.
    We talked to Qatar. We talked to Cyprus. And they all 
shared the same concerns and have suggested that they, too, may 
bar you from their countries. I think France has already 
decided to do that.
    You may be right. This may not work. And I am concerned 
that I don't hear a firm commitment from you to work on some of 
these issues because this is a national security risk. We 
cannot afford to have terrorists. We cannot afford to have 
money laundering made easier by the app that you have or the 
Libra network that would make it much easier for them to 
access.
    While I think your goal of the unbanked is laudable, I just 
think that it will not be them who use it. I agree with my 
colleague, Ms. Pressley.
    Moving on, do you think that you will be able or the 
association will be able to really work a ratio that is one-to-
one that will ensure that it will always be stable?
    Mr. Zuckerberg. Congresswoman, I think so. That certainly 
will be the default if someone buys a--
    Ms. Garcia of Texas. Because this is not the full faith and 
credit of the U.S. that we are talking about. We are talking 
about a mix in the basket of potentially euros and yens and 
dollars, and those fluctuate. So the impact is not only to this 
country, but to many other countries. Do you have any idea how 
they actually plan to manage that?
    Mr. Zuckerberg. Congresswoman, that will be up to the Libra 
Association to manage. That is not under my control, but that 
will be regulated by--
    Ms. Garcia of Texas. But Mr. Marcus is under your control?
    Mr. Zuckerberg. I am not sure I would say that. But he 
works for me.
    Ms. Garcia of Texas. He works for you.
    [laughter]
    Ms. Garcia of Texas. He works for you, and he chairs the 
board, does he not, or he is a member of the board?
    Mr. Zuckerberg. Sorry, can you repeat that?
    Ms. Garcia of Texas. He works for you, and then he, in 
turn, is part of the association, is on the board. So that is a 
big voice that you have on the board. Even though you have been 
very careful of calling it an independent association, I am 
suspect of that.
    Mr. Zuckerberg. Congresswoman, both things can be true. 
David runs the Calibra subsidiary for Facebook. He is a member 
of Facebook's executive team. He is also our delegate and a 
board member, but only one of the board members of the 
independent Libra Association.
    Ms. Garcia of Texas. Who is the Chair of the board of the 
association? Is it not Mr. Marcus?
    Mr. Zuckerberg. Congresswoman, I actually am not sure if 
the Libra Association board has a Chair.
    Ms. Garcia of Texas. Most boards are governed by an 
executive committee or a Chair. Otherwise, it is just a bunch 
of people in the room having coffee and reading a board agenda. 
I would be surprised by that.
    Mr. Zuckerberg. Congresswoman, I don't know the answer to 
that.
    Ms. Garcia of Texas. But let us just go ahead and move on. 
Now you responded with Ms. Porter, we talked about the number 
of lawyers. The 60 that was mentioned, are those lobbyists here 
in D.C. working for you?
    Mr. Zuckerberg. Congresswoman, I am not sure what you are 
referring to.
    Ms. Garcia of Texas. Ms. Porter, my colleague who sat right 
behind me, asked you about the lawyers, and she referred to 
some litigation that you are involved with in terms of the 
liability issues. Well, then, I will ask you, how many 
lobbyists do you have here working for you?
    Mr. Zuckerberg. Congresswoman, I don't know the answer off 
the top of my head.
    Ms. Garcia of Texas. You don't know how many lawyers you 
have working for you here in D.C.?
    Mr. Zuckerberg. No, Congresswoman, I do not know the 
breakdown of our exact office here.
    Ms. Garcia of Texas. Have you ever worked with them to try 
to get the Federal Reserve to have a digital dollar?
    Mr. Zuckerberg. Congresswoman, my understanding is we have 
certainly talked to the Federal Reserve about a number of 
things, as they are one of the key stakeholders here.
    Ms. Garcia of Texas. It seems to me that if you want to 
help the unbanked and do all these great things--
    [Gavel sounding.]
    Ms. Garcia of Texas. --that you would work in an approach 
that would include the U.S. Government. What better partner 
could you have?
    Mr. San Nicolas. The gentleman from Minnesota, Mr. 
Phillips, is recognized for 5 minutes.
    Mr. Phillips. Thank you, Mr. Chairman, and welcome, Mr. 
Zuckerberg. When you get to me, you are almost at the end. So, 
congratulations. And I am one who celebrates innovation and 
innovators and, frankly, wish we had more of both here in our 
Congress.
    Have you read the book, ``Future Shock,'' Alvin Toffler's 
1970 book about--
    Mr. Zuckerberg. Congressman, I have seen it, and I actually 
have a copy, but I have not read it yet.
    Mr. Phillips. It is a long one, but I recommend it. Toffler 
defines future shock as, ``too much change in too short a 
period of time.'' And I think it is fair to say that regulation 
certainly has to play catch-up to our tech revolution, and that 
is in no small part why we are here today.
    I have a number of questions for you. In 2017, Congress 
released a trove of political ads found on Facebook by agents 
acting on behalf of the Russian government. Now, you have 
acknowledged that some of those ads were paid for with Russian 
rubles. Is that correct?
    Mr. Zuckerberg. Congressman, that is correct. In 2016 and 
in general, we were on our back foot and behind what we needed 
to be doing to prevent election interference, and since then, 
we have built very sophisticated tools and have played a role 
in defending against foreign election interference in more than 
200 elections around the world.
    So, I have some confidence that our systems are in a much 
better state today on that.
    Mr. Phillips. Okay. But at that time, you were certainly 
aware that Federal law prohibited foreign nationals from 
spending money to influence a Federal election, correct?
    Mr. Zuckerberg. Sorry. Could you repeat that?
    Mr. Phillips. At that time, Facebook was aware that Federal 
law precluded foreign nationals from spending money to 
influence a United States election?
    Mr. Zuckerberg. Congressman, I am sure our legal team was 
aware of that, but we didn't at the time vet a government ID of 
every person buying an ad. Today, one of the measures that we 
have taken to strengthen our protections against election 
interference is to require a government ID, and for an 
advertiser to prove their location if they want to run 
political ads or issue ads across our system.
    Mr. Phillips. Which I celebrate, by the way. In fact, we 
are about to vote on something called the SHIELD Act here in 
the House. One of my bills is in it, the Firewall Act, which 
would make sure that foreign money would not be allowed to buy 
online political ads in our country.
    Let us move the conversation to Libra. Will Facebook accept 
Libra as payment for advertisements on its site?
    Mr. Zuckerberg. Congressman, I imagine if the project 
proceeds to that stage, that we would do that. But we haven't 
developed our full set of policies around where exactly it is 
going to hook into different parts of our system. The priority 
right now is to help the Libra Association and make sure that 
Calibra, as a subsidiary, can design systems that can comply 
with all of the U.S. regulations and secure regulatory 
approval.
    Mr. Phillips. Okay. But so you understand what will be kind 
of a collective concern, which is if you can use Libra to buy 
ads on Facebook and you can be anonymous essentially in so 
doing, the potential challenge that we face then relative to 
our electoral law?
    Mr. Zuckerberg. Congressman, I can assure you that we are 
not going to allow any weakness to enter into the system that 
requires verification of people's government IDs for buying 
political ads.
    Mr. Phillips. Okay. And on the subject of verification, as 
Twitter has verified accounts, has Facebook--I would love to 
hear your thoughts on whether Facebook has considered or would 
even consider verifying its users so that in transactions, 
especially as we consider what will be a revolutionary 
initiative in the form of Calibra and Libra, to ensure that 
accounts are verifiable? And if not, why not?
    Mr. Zuckerberg. Congressman, this is an area where I think 
we are going to do a lot more in the years to come. We started 
with political ads and political discourse running large pages 
because that is some of the most sensitive content. But I do 
think that what you are talking about is going to be a trend in 
the development of our systems over the coming years where for 
anything that people are doing that has sensitivity, we are 
likely going to increasingly require verification, either by 
government ID or other things, so we can have a clear sense of 
people's authentic identity.
    There are costs to doing that. Not only does it introduce 
friction, but I think there are some kind of equities to 
balance in terms of whether people broadly are going to want 
Facebook to be verifying that many people's identities.
    But I think in general, to balance the safety and security 
questions, going in that direction for more use cases likely is 
the right thing to do.
    Mr. Phillips. Would it be a competitive advantage or 
disadvantage for Facebook to ensure all of its users are 
verified?
    Mr. Zuckerberg. Congressman, I doubt we will ever get to 
the place where every single person is verified, but I think it 
could cut both ways strategically. Certainly, if people have 
verified identities, that creates a culture of authenticity and 
helps us with security across the platform. On the flip side, 
that is imposing a lot of constraints and friction on people 
who are just trying to use a service in the way that they would 
on a day-to-day basis.
    Mr. Phillips. I thank you, and I yield back.
    Mr. San Nicolas. The gentleman from Texas, Mr. Gonzalez, is 
recognized for 5 minutes.
    Mr. Gonzalez of Texas. Thank you, Mr. Zuckerberg, for being 
here. And if you are lucky, I may be the last person to ask you 
a few questions.
    I know earlier, you mentioned Facebook is working harder to 
protect our 2020 elections. However, we also have a major event 
in our country, which is the 2020 Census that is coming up, and 
the 2020 Census is particularly important to our country. It is 
important to my district, which has been undercounted 
historically.
    We had a Supreme Court case where the Court agreed to not 
allow the question to be asked, the citizenship question to be 
asked in the 2020 Census. My question is, if an ad were to be 
run on Facebook that was stating that if immigrants participate 
in the Census, their information will be turned over to ICE, 
which is a false statement, would you allow such information to 
remain on the platform if offered by a politician or an 
ordinary citizen?
    Mr. Zuckerberg. Congressman, I am not sure I caught the 
specific example, but let me answer the principle level and 
then--
    Mr. Gonzalez of Texas. The question is, if an ad says that 
if immigrants participate in the Census, their information will 
be shared with ICE, which is a false statement, would you take 
this ad down, or would you allow it to stay on the platform if 
an ordinary citizen or a politician posted this?
    Mr. Zuckerberg. Okay. Congressman, where we are right now 
is we have in place a voter suppression policy, and we are 
working on finalizing that to extend that to a Census 
suppression policy as well.
    Mr. Gonzalez of Texas. This isn't voter suppression.
    Mr. Zuckerberg. I agree. I'm sorry, I am trying to answer 
your question. Where we are extending the current set of 
policies that we have around voter suppression to a new Census 
suppression policy, too. We recognize that this is important 
and rises to a level above normal hoaxes or misinformation 
where we would allow someone to post it, but we would just mark 
it as potentially marked false by independent fact-checkers. 
For voter suppression information, we actually take it down, 
and we will do the same thing for Census suppression 
information.
    We are currently working on finalizing the specifics around 
what that policy will be, and I would expect that we will roll 
it out in the coming weeks. Before that, it is somewhat hard 
for me to answer any specific questions or hypotheticals about 
whether content would or would not be included in that.
    But this policy is coming. We take it seriously. I agree 
that this is extremely important.
    Mr. Gonzalez of Texas. It is really egregious, and we are 
really concerned, and we are going to be watching out for this. 
So are you saying that this is something that you guys are 
searching for, or would it have to be reported to you that, 
hey, this might be something that is improper, take it down. Or 
do you have a system in place, are you working on a system in 
place to not only take it down when it is reported, but 
actually search and destroy this type of negative and improper 
information that is inseminated on Facebook?
    Mr. Zuckerberg. Congressman, thank you for the question.
    In general, for our content moderation, it is a combination 
of AI and technical systems that can do proactive scanning, and 
then a combination of that and human review.
    What we found is for the state-of-the-art, you want both. 
You want to use computers and AI to do what computers are best 
for, which is basically looking at a lot of things and making 
very quick judgments, and you want to use people for what 
people can uniquely do, which is making nuanced judgments and 
often judging linguistic variation between things that are 
important for some of these policies.
    Mr. Gonzalez of Texas. It just seems with the vast 
resources that Facebook has, and the importance for our 
national security to have a proper count of the people in our 
country, that we would expect you to be more proactive. I think 
Facebook has been a major success, as you know, and I think its 
continued success will depend on what happens in 2020 because 
we will be watching.
    We really enjoy it. I enjoy your platform. I think you have 
done amazing things for this country and around the world, but 
we really want you to be responsible, especially when it comes 
to national politics and national issues like the Census. And 
we think Facebook has a responsibility to do so, and I hope 
that you can follow through on this. We will be watching.
    Thank you very much.
    Mr. Zuckerberg. Thank you. I certainly care about this a 
lot.
    Mr. San Nicolas. Now that we have exhausted all of our 
Members present, I recognize the ranking member for 5 minutes 
for a closing statement.
    Mr. McHenry?
    Mr. McHenry. Thank you for your testimony, Mr. Zuckerberg.
    Clocking in at just over 6 hours, this is not a brief 
hearing. We have covered, I think, the full range of topics for 
the fullness of your corporation, and so, frankly, I am not 
sure that we have learned anything new here as policymakers on 
Capitol Hill. We covered a lot of topics, but my fear is that 
we still don't have a deeper understanding of how Libra will 
work, how it might further financial inclusion, or this 
question of cross-border movement of value, of money, or how it 
may expand access to financial services for the Americans who 
need it most. We don't have clarity about that.
    And as I said earlier, I have my own real concerns about 
Facebook and, quite frankly, many of the big tech companies, 
and that is why I said at the beginning of this hearing that 
you are here to represent not just your company, but Silicon 
Valley and the biggest of technology companies.
    We have had an opportunity for our Members to express many 
of what I view as valid concerns about the pitfalls emerging 
from new technologies, particularly on the privacy front, and 
you have heard it from both sides of the aisle in terms of 
privacy and the work that you acknowledge that Facebook needs 
to continue to do to regain that trust that your users expect.
    And as well as opportunity for members to express, quite 
frankly, their anger at the commonalities of the digital age. 
Some of that fear is rightly directed at Facebook, sure, but 
not all of it. And again, there are real concerns about the 
digital age and about big tech.
    But make no mistake, for those of us here as policymakers, 
I think we should have a common understanding that innovation 
is coming, with us here in Washington, D.C., or in the United 
States or without us, because there is a very competitive 
environment we have around the globe with enormous competition. 
You can just look at a couple of examples dealing with the 
Chinese repression of free speech that gives us great pause as 
Americans, and that regime using technology, sophisticated 
technology to repress people's freedoms as a disturbing sign of 
what big technology could do and could bring to bear on 
unwitting people.
    So I think it is important that we encourage responsible 
innovation here in the United States. I think it is important 
that we create regulatory certainty so that we can have 
innovation occur here, especially when it comes to digital 
currencies and new ways of transmitting monies. But I think we 
need to ensure, as policymakers on both sides of the aisle, 
that we embrace that next wave of innovation and embrace it in 
a more fulsome way.
    And in closing, I would like to submit for the record, Mr. 
Chairman, a letter dated from just a few days ago from Senator 
Rounds, the distinguished Senator from South Dakota, to 
Anchorage Trust, expressing concern that innovation in this 
country is falling behind the rest of the world. I think he 
outlines in a very solid way that we need to have some 
regulatory certainty in order to foster this innovation.
    With that, Mr. Zuckerberg, thank you for your testimony, 
and I yield back the balance of my time.
    Mr. San Nicolas. Thank you.
    Without objection, it is so ordered.
    Mr. Zuckerberg, I want to thank you, on behalf of the 
committee, for making the time to be here today. I would also 
like to thank your shareholders. I think your time is 
incredibly valuable. I don't quite know how many millions of 
dollars your shareholders had to lose today for you to be able 
to spend these 6-plus hours here with us, but I wanted to thank 
you and I would like to thank them for you making the effort to 
be here today.
    It is a heroic effort. It has been a very long hearing. But 
as we have commonly heard, with great power comes great 
responsibility. And as the head of perhaps the largest 
communications network globally, when you talk about 
interactions and likes and comments and shares and photos and 
all of the different ways that your platform touches people, 
that is a tremendous amount of power that also comes with a 
tremendous amount of responsibility.
    One of the amazing things about this Congress is that we 
have 441 Members, to include our Territories, and that brings 
to the table perspectives from throughout the country, from the 
great State of North Carolina all the way to the Territory of 
Guam in the middle of the Pacific Ocean.
    And when you have some common themes of concern and 
hesitation and questions that kind of sound similar across this 
country, that is a responsibility that you have, given the 
power that you wield with the awesome enterprise that you run 
in this country.
    And so, on behalf of the American people, I think it is 
important that we factor in the concerns of basing this Libra 
operation in Switzerland, outside of the legal ability of the 
United States to be able to so exercise and so regulate. I 
think that it is important for us to firmly consider that our 
concerns aren't just limited to the United States of America, 
but our responsibility as the reserve currency of the world to 
make sure that we are looking out for the overall currency 
impacts that a third-party currency might so present.
    And with that, I think that it is very important for us to 
be able to reflect on those things not just as a body, but the 
Libra Association in general and Facebook and yourself in 
particular.
    And with that, I recognize our chairwoman, Chairwoman 
Waters.
    Chairwoman Waters. Thank you very much.
    Mr. Zuckerberg, I would like to thank you for coming today. 
When we talked about the possibility of this meeting, I 
indicated that it may be uncomfortable for you, but I also 
indicated that I am sure that you would know how to handle it. 
So, I hope you have learned today just how many concerns and 
questions Members of Congress and the public have, and not just 
with the Libra project.
    Facebook's diversity failures include an abysmal record of 
hiring and promoting people of color and women, contracting 
with diverse suppliers, and investing in diverse asset 
managers. And it appears that the Libra Association's board 
diversity numbers are following Facebook's example.
    Facebook has failed to follow our fair housing laws, and 
has inherently discriminatory algorithms. Facebook has 
repeatedly failed to protect consumer data. Facebook is serving 
as the vehicle for misinformation campaigns and election 
interference by malicious state actors, and Facebook is looking 
to leverage its massive size and economic power to now dominate 
the global financial system.
    Regarding the Libra project, we heard concerns ranging from 
your failure to unequivocally prevent anonymous use, which 
means sex traffickers and child pornographers and other bad 
actors can finance their nefarious activities. We also heard 
repeatedly that this project poses a systemic threat to the 
U.S. and global economy, and I hope that you have heard these 
concerns and that you will heed our warnings.
    And I think there is a lot more discussion to be done about 
the way that you have framed your concerns about freedom of 
speech and the fact that politicians are isolated in your 
concerns about freedom of speech and that you are opening up 
the opportunity for not only attacks that not necessarily, I 
guess, would be tolerated if you were doing some fact-checking 
and that suppression. I am very concerned about suppressing the 
vote.
    I am pleased that you have information that you shared with 
us about a civil rights audit that is going to be done because 
they are going to tell you a lot about how politicians initiate 
the kind of voter suppression. It is not simply that we are 
concerned about voter suppression by others, other than 
campaigns. It is not that we are only concerned about 
governments that are involved in voter suppression. We are 
concerned about Democrats versus Republicans, Republicans 
versus Democrats, Independents versus Republicans, Independents 
versus Democrats, et cetera, et cetera, et cetera.
    This is serious stuff, and we have been the victims of it 
for far too many years, exercised in the most creative ways 
that you could imagine. So, when you talk about opening up this 
so-called free speech opportunity, I want you to know that I 
can envision certain elected officials with billions of dollars 
who can buy as many ads as they need to buy, and would take out 
those ads to suppress voters in very creative ways.
    With that, I yield back the balance of my time, if I have 
any.
    Mr. San Nicolas. Thank you, Madam Chairwoman.
    The Chair notes that some Members may have additional 
questions for this witness, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to this witness and to place his responses in the record. Also, 
without objection, Members will have 5 legislative days to 
submit extraneous materials to the Chair for inclusion in the 
record.
    This hearing is adjourned.
    [Whereupon, at 4:12 p.m., the hearing was adjourned.]

                            A P P E N D I X


                            October 23, 2019
                            
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