The Zuckerberg Testimony: 'Senator, We Run Ads'

Senator Orrin HatchMr. Zuckerberg, I want to ask you about your business model. You've said that Facebook is free and always will be. But how do you sustain a business model in which users don't pay for your service?

Mark ZuckerbergSenator, we run ads.

HatchI see. That's great. You run ads. And how do you make money from those ads?

ZuckerbergSenator, advertisers pay us to show ads to people. The ads are targeted based on information that people share on Facebook. We don't sell people's data. Advertisers tell us who they want to reach, and we show the ads to the right people without sharing the underlying data with the advertisers.

Senator Lindsey GrahamMr. Zuckerberg, who is your biggest competitor?

ZuckerbergSenator, we compete with a lot of companies. Google, Apple, Amazon, Microsoft. We compete with Twitter for attention. We compete with Snapchat for messaging. We compete with YouTube for video. The tech industry is very competitive.

GrahamIs there an alternative to Facebook in the private sector? If I don't like Facebook, what's the equivalent product I can go to?

ZuckerbergSenator, there are a number of social media platforms. Twitter, Snapchat, LinkedIn. People use multiple services. The average person uses eight different apps to communicate with their friends.

GrahamYou don't think you have a monopoly?

ZuckerbergIt certainly doesn't feel like that to me, Senator. We face intense competition in every aspect of what we do.

GrahamWell, I think you do. And I think that's a problem. But let me ask you another question. If you were designing a regulation for Facebook, what would it look like?

ZuckerbergSenator, I think the real question is what's the right regulation. I think there are a few principles: transparency, control, and accountability. People should know how their data is being used. They should have control over it. And companies should be held accountable when they make mistakes. I think regulation that embodies those principles would be good for the industry and good for the internet.

Senator Dick DurbinMr. Zuckerberg, would you be comfortable sharing with us the name of the hotel you stayed in last night?

ZuckerbergSenator, no. I would not be comfortable sharing that publicly.

DurbinIf you've messaged anyone this week, would you share the names of the people you've messaged?

ZuckerbergSenator, no. I would not want to share that here.

DurbinI think that's the point, Mr. Zuckerberg. The information that Facebook collects about its users -- where they stay, who they message, what they buy, what they read -- that's exactly the kind of information that most people would not want to share publicly. But Facebook collects it, and Facebook monetizes it. And the users don't always understand that's what's happening. That's the fundamental tension here. Your right to privacy, versus Facebook's business model. And right now, your business model is winning.

ZuckerbergSenator, I understand the point. I think everyone should have control over their information. That's why we give people the ability to control their privacy settings. That's why we're making those controls easier to use. I agree that we need to do better. And we are committed to doing better.

Senator Bill NelsonMr. Zuckerberg, yesterday I was talking about a particular type of chocolate. And this morning, I opened Facebook and saw an ad for that very same chocolate. Was Facebook listening to my conversation?

ZuckerbergSenator, no. Facebook does not listen to your conversations through your phone's microphone. That's a common misconception. We don't do that. The ads you see are based on your activity on Facebook, the pages you like, the things you click on, and other information you've shared with us. Not your microphone.

NelsonThen how do you explain the chocolate ad?

ZuckerbergSenator, I can't explain the specific ad without more information. But it's likely that you searched for chocolate, or liked a chocolate-related page, or that the advertiser targeted you based on demographic information that matched your profile. It's a coincidence that it happened the day after you talked about it. But I understand why it feels unsettling.

NelsonWell, it does feel unsettling. And I think a lot of Americans feel the same way. They feel like you're watching them. And they don't like it.

ZuckerbergSenator, I understand the concern. We want people to feel in control of their experience on Facebook. That's our goal. And when people feel like we're doing something without their knowledge, we've failed. We need to do better at explaining what we do and why.

Senator John ThuneMr. Zuckerberg, Cambridge Analytica obtained the data of 87 million Facebook users without their consent. That data was used to target political ads during the 2016 election. When did Facebook first learn about this?

ZuckerbergSenator, we learned in 2015 that a researcher named Aleksandr Kogan had shared data with Cambridge Analytica in violation of our policies. We demanded that Cambridge Analytica delete the data. They certified that they had. We took them at their word. We didn't follow up. We didn't audit. We didn't verify. That was a mistake.

ThuneYou didn't verify that they deleted the data. You didn't notify the 87 million users whose data was compromised. You didn't notify the FTC. You didn't disclose this to this committee. Why not?

ZuckerbergSenator, we should have. We made a mistake. We thought the data had been deleted. We thought the matter was resolved. We were wrong. We should have done more. We should have followed up. We should have notified people. We should have been more transparent. I'm sorry that we didn't. We're now taking steps to make sure this doesn't happen again. We're investigating every app that had access to large amounts of data before 2014. We're restricting the data that apps can access. We're making it easier for people to control their privacy settings. We're doing everything we can to earn back the trust we lost.