Damning testimony from former Facebook employee Frances Haugen has reignited bipartisan support for reining in the tech sector, with US lawmakers vowing to tighten regulations.
In a three-hour hearing, Haugen accused her former employers of pushing to maximise social interaction on its platforms at all costs, even when those interactions exacerbated addiction, bullying and eating disorders.
She also detailed how the company covered up research it had conducted on how its services impact children in particular, exposing them to round-the-clock bullying and content that negatively affected users’ mental health.
Richard Blumenthal, the Democratic chair of the Senate consumer protection subcommittee, told reporters after the hearing: “There was such bipartisan support today . . . I think it augurs well for actually getting [new legislation] across the finish line.”
But in a post on his own Facebook page Mark Zuckerberg hit back at the whistleblower’s claims. The Facebook founder and chief executive wrote: “Most of us just don’t recognise the false picture of the company that is being painted.”
Experts say one of the reforms most likely to gain Congressional approval is an expansion to the Children’s Online Privacy Protection Act to make it illegal for companies to collect personal information on under-13s without their parents’ consent.
Another is a move to limit Section 230 of the Communications Decency Act, which means social media companies cannot be sued for content which users post on their platforms, even if they moderate it.
Marietje Schaake: US tech needs to do a great deal better when it comes to democracy, argues the international policy director at Stanford University’s Cyber Policy Center.
Lex: Investors should take Frances Haugen’s allegations that Facebook mislead investors and advertisers seriously.
Thanks for reading FirstFT Americas. Here’s the rest of today’s news — Gordon
Five more stories in the news
1. Record gas prices hit bonds European natural gas prices shot to record highs yesterday, dragging down bond markets in a sign that investors are expecting energy shortages to cause wider economic damage. The moves continued today with the yield on 10-year UK government bonds trading at its highest price since 2019. European equity markets fell following falls in Asia.
2. Taiwan warns that China will be able to invade by 2025 Chiu Kuo-cheng, Taiwan’s defence minister, has warned that China will be fully capable of invading the island within five years, in the government’s first clear message to the public that the country faces a threat of war.
3. Private equity pays record premiums for public companies Private equity firms are offering the highest premiums for listed companies in more than two decades, paying almost 70 per cent above the previous share price in some cases, in a sign of the widening gap between cash-rich buyout groups and public market investors.
4. Amazon wins record US tax breaks Amazon has won a record amount of tax breaks this year as local officials try to lure the online shopping giant to expand its one-day or same-day delivery networks in their areas. According to data from Good Jobs First, Amazon has so far secured about $650m in sweeteners from local and state governments in 2021.
5. Allbirds walks back ‘sustainable IPO’ claims The self-styled ethical shoemaker Allbirds has walked back some of the ESG commitments it made ahead of its planned market debut. In an update to its IPO prospectus, the San Francisco-based start-up removed several key references to its “sustainability principles and objectives framework”.
- New Zealand has raised interest rates for the first time in seven years as concerns over rising property prices and inflation outweigh the importance of the Pacific nation’s battle to control the spread of coronavirus.
- Johnson & Johnson has asked US regulators to authorise a booster shot for its single use Covid-19 vaccine.
- Janan Ganesh: Acceptance of vaccinations and mandates shows that even in populist times voters want to be led.
The day ahead
High-level US-China meeting Jake Sullivan, US national security adviser, will meet Yang Jiechi, China’s top foreign policy official, in Switzerland today to discuss a possible virtual summit between Joe Biden and Xi Jinping.
General Motors updates on electric The Detroit carmaker will provide an update on its strategy around electric vehicles, software and self-driving vehicles, as well as on its financial outlook at its investor day event.
Levi Strauss reports earnings Third-quarter net revenue at the clothing group is expected to increase as people venturing out more following the easing of Covid-19 curbs spend more on casual apparel.
What else we’re reading and listening to
Why China is cracking down on crypto Beijing’s ban on cryptocurrencies pits the unlimited power of an authoritarian government against a decentralised network of computers beyond the control of any central authority.
Trading or gambling? Troubled day traders are increasingly turning to gambling helplines as mobile brokerage applications blur the line between investing and online sports betting — an issue that has drawn the attention of the US Securities and Exchange Commission.
From Panama to the Pandora papers This week’s exposé on the financial affairs of the rich and powerful, dubbed the Pandora Papers, highlights the progress that has been made since the world began to clamp down on offshore tax evasion in 2008. Global tax correspondent Emma Agyemang explains why.
Will American drivers go electric? For the past four decades Ford’s F-150 pick-up truck has been the best-selling auto in the US. America’s most iconic vehicle is now going electric but will drivers in the US embrace the new technology like consumers in Asia and Europe? This is the latest part of our electric vehicle revolution series.
Would you buy an electric vehicle? Do you already have one? Tell us in our latest poll.
Canada faces reckoning on abuse of Indigenous children Canada is in the midst of a reckoning over its treatment of Indigenous people. For decades children were forcibly removed from their families as part of an assimilation policy. Many were sexually and physically abused. A recent court case has shone a light on their plight.
The tiny fund that took on a US giant and won In the third episode of our special five-part series on sustainable or ESG investing, Charlie Penner of Engine No 1 talks about the very public proxy campaign he launched against ExxonMobil which forced the oil major to prepare for a future free of fossil fuels.
Greenland, the Baffin Base Camp and Georgia are three of the most adventurous destinations ski enthusiasts are heading to this winter. Oh, and there’s Uzbekistan. Could this Central Asian country be skiing’s next big thing?
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