A Bad Week in a Bad Year for Facebook as Scandal Roils Leadership

November 16, 2018

By Conor White and Amanda Weston

Facebook's latest scandal has raised serious questions about founder and CEO Mark Zuckerberg's oversight of the troubled media giant.

This week, a New York Times investigation found that Zuckerberg downplayed and denied Russian meddling in the 2016 election on his platform. The report also said he and COO Sheryl Sandberg launched a multi-pronged lobbying campaign against rival tech companies through a consulting firm called Definers Public Affairs that engaged in questionable tactics, like linking anti-Facebook activists to liberal billionaire George Soros.

In a call with reporters on Thursday, Zuckerberg denied the allegations and said he and Sandberg were unaware of Definers' actions.

But in a year that also included a massive security breach and revelations about the mishandling of user data, this latest scandal cast doubt once again on the company's direction.

“It exposes and reinforces what I think a lot of people already fear, which is that there’s something off with Facebook’s ($FB) moral compass,” Issie Lapowsky, senior writer at WIRED, told Cheddar Friday.

“So unless that changes, unless they are making decisions from this core belief that they don’t need to protect their reputation above all else at any cost, but that maybe they can be more transparent and be more open, then I think they’re going to continue facing these crises and their stock price is going to reflect that.”

Michael Nuñez, deputy tech editor at Mashable, said a removal of Zuckerberg or Sandberg from control is unlikely, especially in light of a supportive statement from Facebook's board released Thursday.

But he said Zuckerberg's blanket denial was eyebrow-raising, nonetheless.

"It's a little unusual that both Sheryl and Mark would claim that they had no idea that a Republican-opposition research firm was hired in order to basically slander their rivals such as Apple and Google and also just discredit activist protesters," Nuñez said.

Lapowsky was also skeptical.

“I’ve seen members of Definers sitting in the room with Facebook executives when they’re announcing big changes to the company,” Lapowsky said. "So it does seem pretty hard to believe that the two top leaders of this company wouldn’t have known that they were working with Definers.”

On Friday, Definers released a statement defending its work with Facebook.

"A fraction of our work with Facebook included providing research and background information about critics – both on the left and the right," the statement said, "This practice, standard across many industries, is based on researching public records and databases available to anyone. When we do research, each item includes a link to the source material – a standard way to ensure information is communicated in facts, not innuendo."

On the call with reporters, Zuckerberg promised to improve transparency, saying the company will install an independent oversight body to review appeals for content removals ー a "Facebook Supreme Court," of sorts.

Facebook also said it will change its algorithm to catch “borderline content” that doesn’t explicitly violate the site’s policies. The change in procedure is meant to minimize the reach of sensational posts.

Nuñez thinks it's a good start, but it might not be enough.

"I think it is important for the company to show people that they are doing things and making changes," he said, "But Facebook is fighting a battle on many different fronts, and part of it is public opinion."

Facebook's biggest concern? A simple one.

"If people stop trusting it, they might be less likely to log on to the app," Nuñez said.