California Sen. Dianne Feinstein was just a twelve-mile drive from Facebook headquarters in Menlo Park, Calif., when she fielded a question about what Washington is doing to protect America’s Democratic process from cyber attacks by foreign actors.
“It’s a very real danger,” Feinstein told the audience of several hundred tech industry executives and students, gathered in the heart of Silicon Valley for what was billed as a “fireside chat” with the state’s Democratic senior senator. “I think when you have these big platforms that it’s not possible to say, well, we’re just like a phone book and we’re benign. You’re not benign.”
Feinstein did not, however, proffer any particular policy solutions. Nor did she utter the name of the platform making headlines around the world for the role it played in the 2016 presidential election.
After the event, however, Feinstein had a word of warning for Facebook and the other social-media behemoths that call California home. “Fix it before it really breaks,” she told a scrum of reporters who gathered around her to ask about the data privacy scandal that has engulfed the company in recent weeks.
Feinstein’s measured response is a sign of the balance many of the state’s leaders in Washington are trying to strike as they prepare for Facebook CEO Mark Zuckerberg’s much-hyped visit to Capitol Hill this week. Those hearings are expected to shine an unflattering light on the social media company and its ilk, who have been in a public relations freefall since 2016 thanks to revelations of Russian infiltration and a massive leak of data to Cambridge Analytica – a political firm tied to Donald Trump.
These Internet companies and their executives are also, however, some of California’s most significant employers, taxpayers and political donors. As such, the state’s representatives in Congress are wary of policies that could strangle their business model, killing a goose that’s laid not just one, but cartons of golden eggs.
Sacramento-area Rep. Doris Matsui said she wants to protect local companies’ ability to innovate. “I understand, I’m from California, we really want to make sure innovation is there because so many things have really been helpful to us,” she said. But the Democratic Congresswoman, who sits on one of the House Energy and Commerce committee that will hear from Zuckerberg this week, also said the recent revelations had made her more clear-eyed about the downsides of Facebook and other platforms. “We really need to look at the privacy aspects of it because it not only impacts what Facebook is doing but many other sectors,” Matsui said.
Rep. Anna Eshoo, who counts Zuckerberg among her Palo Alto-area constituents, chastised the company in the San Jose Mercury News on Thursday. “An American company, I believe, has a responsibility to America,” said Eshoo, a senior member of the Energy and Commerce Committee.
Feinstein and fellow California Sen. Kamala Harris are also likely to strike a tough tone in their Judiciary Committee hearing with Zuckerberg Tuesday afternoon, as are the state’s seven members of Congress who sit on the House Energy and Commerce Committee that will hear from Zuckerberg on Wednesday.
At a Senate Intelligence Committee hearing on Russian meddling in November, Feinstein told senior executives from Facebook, Twitter and Google that while she is proud to represent California’s tech community, “I must say, I don’t think you get it.” Harris followed with pointed questions on the companies’ advertising practices and efforts to combat foreign cyber operations.
But while elected officials have begun to take a harder look at Facebook and related companies, the state’s delegation is also working with them – prodding their leaders to be more proactive as a way to avoid the kind of heavy-handed regulation Washington may be tempted to impose.
“The best result would be to try to figure out the path together,” said Carl Guardino, president and CEO of the Silicon Valley Leadership Group, which hosted Feinstein for the “fireside chat” on April 2. The trade association represents nearly 400 companies across the region. “I think we have members (of Congress) here who know, appreciate, understand and represent the Valley that can help be those bridge builders,” Guardino said
Democratic Rep. Ro Khanna, one of the lawmakers who represents part of Silicon Valley, including tech hotbeds like Sunnyvale, Cupertino and Santa Clara, said internet companies need to realize that “the days of Ayn Rand libertarianism are over.” At the same time, “We don’t need bureaucrats in Washington sitting there and scribbling designs for Instagram and Google and Facebook tools.”
Facebook appears to be responding to the pressure. On Thursday, the company announced that it would allow users across the globe to access privacy settings that comply with the European Union’s stringent privacy standards. And on Friday, Zuckerberg announced in a post that the network will require political advertisers to verify their location and identity.
Zuckerberg also said the company supported legislation in Congress that would require online political ads to disclose their source of funding. Feinstein is a co-sponsor of the Honest Ads Act in the Senate, but only one California House member, Democrat Jim Costa, is a sponsor of the House version.
A spokesman for Harris said his boss is open to new legislation on social media and elections, as well. Matsui and Eshoo were both noncommittal about proposed policy changes.
Khanna is advocating for an “Internet Bill of Rights” along the lines of what former President Barack Obama and his team of tech advisers proposed in 2012. And he believes Internet companies in his district are open to the idea. “They completely, I think, understand the need for a regulatory framework,” the congressman said. But they want to make sure “that it’s not a sledge hammer approach, that it doesn’t over-empower bureaucrats that may not understand how fast technology moves.”
If that happens, the risks to California are significant. The technology industry employs roughly 800,000 people in the Bay Area, alone. And the ultra-rich, many of whom made their fortunes in tech, fuel a large portion of the state’s tax revenue.
They’re also major political donors. In 2016, Facebook, alone, gave a combined $1.4 million to political candidates via its corporate PAC and employees. Nearly half of that cash went to Democratic presidential candidates Hillary Clinton and Bernie Sanders. Another $170,000 went to California lawmakers, led by Harris, Eshoo, Khanna, fellow Silicon Valley Rep. Zoe Lofgren and House Minority Leader Nancy Pelosi.