Zuckerberg grilled in 6 hour testimony before US Congress

Mark Zuckerberg has defended the Libra Association and Facebook's involvement in it in a hearing before the US House Financial Services Committee which lasted for more than 6 hours.

As many anticipated, it became clear soon after the start of the hearing that it was to be a platform for the committee to air a wide range of concerns about Facebook, many of which were unrelated to the Libra Association.

Questioning around the Libra project focused on:

1. whether Facebook would agree to a moratorium on the development of Libra;

2. why various members of the Libra Association had departed;

3. whether Libra would proceed if sufficient regulatory approval cannot be obtained;

4. international competition in financial innovation;

5. how Libra would be backed.

Mr Zuckerberg's responses included:

1. Agreeing in principle to a requirement for Libra to be majority backed by the US Dollar if this would assuages regulator concerns;

2. An acknowledgement that the recent departures of Visa, Mastercard, Paypal, Ebay, Stripe, Booking and Mercado Pago are because Libra is plainly a "risky project and there’s been a lot of scrutiny”; and

3. That Facebook would be "forced to leave" the Libra Association if the association decided to launch Libra without approval of US regulators.

Mr Zuckerberg's prepared remarks focused on Libra as an opportunity to extend America's financial leadership, which clearly resonated with some committee members, including ranking member Representative McHenry (R-NC) who agreed that:

for those of us here as policymakers we should have a common understanding that innovation is coming, with us or without us,

The committee also put to Mr Zuckerberg questions around:

1. Whether the film, "The Social Network" was realistic;

2. How Facebook plans to prevent election interference;

3. His involvement in the Cambridge Analytica scandal;

4. Facebook’s perceived failure to prioritize diversity internally; and

5. Why Facebook has been cracking down on anti-vaccine content.

Toward the end of the hearing, Rep. Patrick McHenry complained that he was unsure whether the committee had "learned anything new here".

While the sentiment might be correct, as Zuckerberg's testimony largely reiterated David Marcus's testimony from July 2019, what seems clear is that what Mr Marcus and Mr Zuckerberg say about Libra may be less important to certain members of the committee than what those members wish to hear.