Mark Zuckerberg is under siege after a punishing year for his social network.
Zuckerberg’s power at Facebook is all-encompassing. He is the CEO, chairman, and controlling shareholder. But his authority is being interrogated like never before as part of a huge legal settlement, according to Politico and The New York Times.
The Federal Trade Commission has been investigating the Cambridge Analytica scandal, during which the personal information of 87 million Facebook users was weaponized in the 2016 presidential election.
The FTC’s work is coming to a head: Facebook revealed last week in its first-quarter earnings announcement that it had set aside $3 billion to settle the investigation into its data-handling practices.
- Facebook appointing an FTC-approved privacy official, a source told Politico. This “assessor” would monitor whether Facebook is complying with the FTC settlement and acting in the best interests of users, The Times added.
- Creating an “independent” privacy oversight committee intended to keep Facebook in check. This could be made up of Facebook board members and other experts, according to the reports. It would meet quarterly, sources added.
- Appointing Zuckerberg or another Facebook executive as a “compliance” officer. Theoretically, this would make that executive personally accountable for future data breaches.
The cumulative effect of these measures would be some of the biggest erosion of Zuckerberg’s authority in Facebook’s history. He would have independent experts looking over his shoulder, checking his homework, holding him accountable for mistakes, and working to ensure users are being protected. Some of those experts would report to the federal government.
Zuckerberg has historically bristled at the idea of independent oversight. Activist shareholders have tried to force Facebook into appointing an independent chairman, but the firm has strongly rejected the idea and voted it down.
Unhappy investors are planning another attempt to oust Zuckerberg as chairman at Facebook’s annual shareholder meeting on May 30. They also want to rip up the firm’s share structure to dilute his voting power. Facebook is again kicking against the plan, saying an independent chair would “cause inefficiency in board and management function and relations.”
The investors are likely to fail with their proposals, given Zuckerberg has more than half of the voting power. But the FTC may succeed in bringing some of the independent oversight they crave. In doing so, they can loosen Zuckerberg’s stranglehold on the firm he founded in his Harvard dorm room.
Facebook declined to comment when reached by Business Insider. Zuckerberg has repeatedly said the company needs to up its privacy game, and he revealed a new mantra this week: “The future is private.” This is a nod to his vision to supercharge private messaging and roll out end-to-end encryption.