Good morning. I'd like to welcome our witnesses today. Before I introduced them last week, most of Silicon Valley had its eye on Washington, d C. On Capitol Hill, a row of senators took their seats behind a tall wood paneled bench. In front of them three lawyers representing Facebook, Twitter, and Google. I welcome our witnesses. Colin Stretch, vice President General Counsel at Facebook, Sean Edge, General counsel at Twitter, and Kent Walker, Senior Vice president General Counsel at Google.
It must have been quite a scene, Sarah Fryer, where were you? I was in the room and the atmosphere was definitely tense. Yeah, the hearing kind of felt like a reckoning. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth? Please be seating.
The Senate Intelligence Committee was there to ask the tech companies about fake news and all the other kinds of miss leading information that Russia has been accused of spreading on social networks during the presidential election, stuff like automated accounts, political ads, and Facebook pages with names like being Patriotic and Donald Trump America that turned out later to have connections to Russia. Congress has been wanting answers for months now.
What was the full extent of Russia's influence campaign on social media, how many people had liked and shared this content, and how many had believed it. Many lawmakers weren't happy with the answers they were getting. Mount Senator, I don't have it in front of me. It would be happy to follow up. I don't have the data, but I will follow up and I will have to come back to you on that, Senator, Sir, We've had this hearing schedule for months. I find you it's a very very disappointing.
I'm Brad Stone and I'm Sarah Fryar, and this week Undercrypted, we're talking about the future of three big technology platforms, Facebook, Twitter, and Google, now that they're in hot water with Congress. We'll look back at how the public has slowly come to understand the volume of this manipulation from Russia and how widely it was circulated on these platforms. We'll also look ahead at how the companies are promising to address the problem and whether those measures will live up to
the kind of action Congress is calling for. Stay with us, so, Sarah, it's been really interesting to watch the story grow over the last year. It's been exactly a year since the presidential election, and I remember Mark Zuckerberg calling it a quote crazy idea that fake news might have swayed the electorate. The positions have really changed since then, haven't they. Absolutely.
I mean Facebook all during was very worried about claims that it was biased against conservatives, so they really didn't want to do much with the content on their platform, right, and they've been giving us more information about how many people were touched by Russian backed ads, what's the latest, And clearly they were trying to get out a little bit ahead of the hearing and acknowledged that this was
a bigger problem that they had acknowledged before. So remember back in April, they had this report that said that there was some interference in the election, they didn't name names. Faster forward to a couple of months later and they actually said that it was in fact Russian interference and
it included a hundred thousand dollars worth of ads. Now, last week they expanded the extent to what they knew by saying that a hundred twenty six million people on Facebook were potentially served Russian propaganda and fifteen million more on Instagram. Now, what was remarkable during these hearings was to see so many Democratic senators who clearly count the tech companies and their employees among their constituencies. I'm thinking
of senators like Kamala Harris or Mark Warner. I really reprimand the tech companies for not taking the issue seriously. Diane Feinstein of California. She thought that the tech companies just didn't get it. Because I've been very proud and I know Senator Harris is as well to represent this tech community from California, but I must say, I don't
think you get it. I have more than a little bit of frustration that many of us on this committee have been raising this issue since the beginning of his year, and our claims were frankly blown off by the leaderships of your companies. Dismissed, said, there's no possibility, nothing like this happening, nothing to see here. It was really interesting to see these senators take that stance, because they definitely get a lot of their donations for their campaigns from tech.
But this is something that across the board in Congress, we saw senators get very openly angry. Now, the tech companies have announced a series of measures to deal with this problem. Mostly they have to do with um partnering with fact checking organizations and hiring more people to go manually review ads and news stories. How much of a solution can that be? Well, I wrote a story last week that highlights just the incredible difficulty of solving these
problems that computers can't solve yet. And when you throw humans at the problem, you have to deal with a whole gray area of what should and shouldn't be allowed. In the case of fact checking, the volume of fake news stories is just too large for their third parties to handle and rowdy, you know, with with Facebook saying they would hire ten thousand more people, including contractors for
their safety and security team. The Twitter employee that the lee did Trump's account on their last day of work highlights how how tricky it can be to put the fate of your solfisal network in the hands of third party contractors. Right there can be unintended consequences. Now, one of the answers we heard most frequently during the hearings was I don't know, We'll get back to you. And
you know, there were there were senators. I think It was Mark Warner who said it kind of strained credulity that these tech companies didn't know that any of this was really happening. Candidly, your companies no more about Americans in many ways than the state's government does. And the idea that you had no idea of any of this
was happening strange my credibility. The companies were consistently dodging questions, and in fact I made a list and found that there were more than twenty things that they told senators they would get back to them on. They have a lot more investigating to do, they reassured everyone. I guess shouldn't say reassure. They confirmed to all members of Congress that they had not finished their investigations, as there may
be a lot more to find. Did the hearing really give us a better idea of what was happening on the platform during the election. Well, you know that about this group called the Internet Research Agency? What who are there? They're they're from Russia. Basically, what they want to do is spread memes that stir up controversy. They're trying, you know, when you troll somebody, you're trying to get into their head.
A little bit and get them angry, agitate them, and the ads and posts from the Internet Research Agency just touched all the hot button issues in the US that really get people riled up, from gun control to immigration to um terrorists, him all these things that you know. In some cases they organized protests on both sides of an argument and people actually showed up. Sarah, how much did it cost these internet troll farms to make this
kind of an impact on the election? On Facebook? A hundred thousand, forty six thousand of which was before the election. On the other platforms even less and compared to the bulk of their revenues, it was nothing. So so they spent forty six thousand dollars. How much did how much did the Clinton and Trump campaign spend on Facebook during I assume before the election? Are organized than than the other group? Uh? Approximately combined approximately eighty one million dollars
eighty one million and before the election. Yes, so eight one million. I'm not a great mathematician, but forty six thousand, eighty one mill you in would that be like five one thousands of one percent? Senator Mansion wasn't the only senator trying to get at the question of how much the companies had profited from Russia backed activity on the site. Kamala Harris, Senator for California, asked about it too, from the Russian sources. That's not my question actually, as American
advertising or legitimate advertising. How much money did you make from legitimate advertising that ran alongside the Russia propaganda? A diminimous amount, Senator. I don't have it in front of me. I would be happy to follow up. Okay, what about for Twitter? I don't have the data, but I will follow up and have you not looked into that? I believe? Are you asking how much advertising revenue we made for
the period? Totally? I'm asking how much advertising revenue did you receive from legitimate advertisers that advertised alongside or in connection with Russian properly Ganda. We haven't done that analysis, but we'll follow up and work on that. Okay, what about Facebook? The same is truy for Facebook, Senitor, you've not done that calculation. We've not done that analysis. I find that difficult to understand because it would seem to me that we would figure out how much you've profited
from Russian propaganda on your on your platforms. What Senator Harris is getting at here, and which has the social media companies understandably worried, is that Congress is concerned about fake news could result in new regulations or laws that
might impact their business. Sarah, how real of a worry is that Facebook has been pretty smart about redirecting the conversation to ads, and that's something where they have said that they're open to regulation, and Google and Twitter have agreed, Yes, sir, that's a really good distinction between political ads, which you know might be easier to regulate, Um, and then the unpaid content that we all see in our feeds on Twitter and Facebook. What's the chance that that gets regulated?
What would the implications be for Facebook's business if it was. Although they said how angry they were about the nature of what was posted by Russia, even Facebook kept coming back to the fact that it wasn't against their internal policies, that the only problem with the ads from Russia and the content from Russia was that it came from fake accounts.
Some of the senators have agreed with you, Um that ads were you know, a small part of the problem, but that you know, fake news stories, you know from Facebook, from YouTube, you know from Twitter really had the potential to change people's minds. Here Senator Ron Widen from Oregon making that point. Now, I'm of the view ads or a small part of a much bigger problem. Fake users posting stories on Facebook, videos on YouTube, links on Twitter can be used by foreign and domestic enemies to under
line our society. You need to stop paying lip service to shutting down bad actors using these accounts. Now, Sarah, why would the tech companies be scared? Listening to Senator Widen here, I I think that's something that scares people around the world. You know, you don't want the government deciding what is fake or not fake, especially when you have a president who considers uh, some mainstream media to
be fake news. It's it's really a dangerous game to play, and that's why Facebook has outsourced it's fact checking to third parties. They don't want to play it either. I mean, it seems to me that, frankly, this is as much a technology company problem as it is a problem inherent to our media environment. Right now, You've just you have frankly, credible news sources on the right and the left which are feeding sometimes stories that feel a little bit like propaganda.
Or or could be misleading into these social networks where then gets propagated pretty widely. There are a lot of questions that the hearing is about what actually is fake news? How do you define it? And the answer from Facebook is that, well, you know, this is stuff that is probably false, but you're right that the bigger problem is a lot of misleading context and sensationalistic content, content that
gives information without its proper context. And there's nothing that anyone will be able to do about that, right, and yet the big tech companies are big, they're visible, and their targets and and so here Senator Diane Feinstein at the hearing really pointing the finger directly a Twitter, Facebook and Google and saying, you know, you're the only ones in a position to do something about this. You have
a huge problem on your hand. You've created these platforms and now they are being misused, and you have to be the ones to do something about um, or we will. Several Senators are now calling for action for new laws to regulate the tech companies, as well as consequences for countries that medal in US politics. That's what we're going
to get into next. Sarah, thank you, Okay, so at the hearing, it was clear that some senators wanted to take action against the social networks or see the company's proposed changes themselves to stop the circulation of false or misleading information. Senator Angus King for Maine said there should be consequences for the hostile states doing the meddling. The third thing that we have to determine, I think, is that this country has to have some kind of cyber
warfare deterrent capacity. Right now, there's no price to be paid for meddling in our democracy, and our adversaries have to understand that if they're going to understake a campaign like this, there will be a price to be paid. There will Republican Senator Richard Byrne. Democratic Senator Diane Feinstein called it a national security risk. In reality, though, regulating content on these sprawling social platforms is hard, much harder
than we might think. Josh Breusteen, that's something you've been writing about recently. Why is it so difficult to weed out all this bad information? Well, there's two distinctions that it's hard to make um on social networks. The first is whether or not something's political, and the second is
whether or not something is an advertisement. It's not quite as simple as just looking at television and knowing when the commercial breaks start, right, and what's in What's really insidious is that message can start as one thing political activity or speech, and then transform into advertising. Right, tell us how that works. Yeah, that's actually sort of the preferred model for advertising on social networks. You would see a message, something that a group would post onto its
personal Facebook or Twitter account. Um, that would just be a message, and then they'd pay the social network to promote it, to show it to people who aren't following them or might not see it otherwise. Then it's an ad. Then what happens is one of those people might retweet it or reposted or comment on it, and at that point it just becomes a message. Again. So the same message goes through several different statuses over its life cycle.
I can't imagine how you begin to to regulate that, you know, And here's Mark Warner, Senator from Virginia, making basically the same point that this stuff is much harder than it looks. For Facebook, much of the attention has been focused on the paid ads that Russian trolls targeted to Americans. However, these ads are just the timp of
a very large iceberg. The real story is the amount of misinformation in divisive content that was pushed for free on Russian back pages, which was then spread widely on news feeds of tens of millions of Americans. So, Josh, how much are tech companies willing to do to track this misinformation and police their own platforms. I think the tech platforms would love for this conversation to revolve completely
around advertisements. To the extent that they can offer some sort of self regulation involving the paid advertisements on their platforms, the better for them. Once they start talking about regulating what they call organic content, those are those first messages that someone just posts to their own account, then they're going to have a real big problem on their hands. One of the things that they seem to want to do is rely on users to flag or report content
that looks suspicious. You know, how how how big a part of the solution can that be? Yeah? I think all the solutions do involve some human interaction to a certain extent. But these are huge, sprawling platforms. There's lots of people on them, tagging things for various reasons. They're not going to manage to get everything, and also what you're going to find is people tagging things that maybe they just don't like or that they want to go
away for some other reason. So it feels almost lame to bring up the business question when we're talking about the future of democracy basically. But Josh, what kind of an impact with regulations have on revenues on profitability for these social networks? Yeah, I think it really depends on how wide any future regulations go. If there's something relatively targeted that says you have to tag political advertising on the websites, I don't think that would really impact the business.
It probably wouldn't even really impact the business for political ads. But once Congress starts doing things like trying to regulate so called organic speech on the site, that could really impact the shape of a Facebook in a way that might also shape its underlying business, and I think that's really what the company's want to avoid. Okay, thank you, Josh. Thanks red So because it's so hard to trace content as it moves across a huge platform like YouTube or Facebook,
it's also extremely difficult to regulate effectively. But that hasn't stopped some senators from proposing new rules, right Garrett to Bink, that's true. Hi Brad, Hi Garrett. Uh So, you're our our New York based reporter and you're at the hearings last week. Tell us about one proposed piece of legislation that came up, the Honest Ads Act. You know, this
is a bill that's put forward by Mark Warner. He's a name that's come up in this conversation already, as well as Amy Klobach are another Democratic senator, and they actually got John McCain, the Republican, to sign on with them to support. And what the Honest Ads Act is, what it tries to do is take the rules that already applied to radio and TV political advertisements and require
online or digital ads to use those same rules. Okay, so when we hear at the end of a radio ad, you know, I'm I'm Joe Mansion and I approved this message, that kind of same disclosure will be required for internet ads exactly. So when you see a video or a display ad on Facebook or Twitter or even on you know, a newspaper's website, it'll have to say similarly, you know,
paid for by etcetera, etcetera, etcetera. But what they'll also have to include as if this bill as it is goes forward, is how many views it got who it was targeted to? And it's not just specific campaigns or candidates that will need to be disclosed. It's any issue of legislative national importance. So this could even be anything related to such a hot button no controversial issues such as gun control, that the platforms would have to go
and make sure that people paying for those advertisements. You know, we know who they are. Now. Some senators suggested that it was almost a patriotic duty for the tech companies to support this bill. Here's Joe Manchion talking to the representatives from the tech companies. Then you asked this, Are you or your CEO is concerned about the threatened damage your companies can do the US with your far reaching power and you have been identified as the major distributors
of fake news? Or is it basically just a business model? So, Garrett, one of the things that this bill does is is treat these internet platforms in the same way as news organizations are treated. Now, these companies have never wanted to be regulated in the same way that news organizations are. How nervous does this make them? Well, you know they are in a position of trying to push back against
everything right. I mean, the last thing that they want is to sort of have to be the ones who can choose, you know, what is political speech, to censor that. I mean, they're very careful about that. They want to be neutral platforms. That's what they've always said they are, and it looks like, you know, we are coming to a point where they can't hold that line, and that's why we're seeing some resistance here. What are the chances that the Honest Ads Act passes? It's a good question.
I mean we are seeing, you know, at the hearings a lot of Democratic senators and and UH representatives as well speaking out seemingly in support of it. The hope from the sponsors of the bill that after these these hearings um that a lot of other people would jump in and say, yeah, of course we need this, But we haven't quite seen that. And this is the only bill that's been proposed at this point. Right there's another bill that relates to um sex trafficking online that could
affect the tech companies we all. We also know that Senator Dian Feinstein said she's working on something that hasn't necessarily come out yet. She just said during the hearings that her staff are working on a bill that would require tech companies to tell a law enforcement when they see illegal activity on their platforms, but we don't know
exactly what that's going to look like. So, Garrett, were ten years into the social networking wave or twenty years into the into the Internet revolution, and these kinds of regulations, you know, they don't exist. Now, how difficult will it be for these senators to deliver on their promises of the past week. I mean, the main goal that they're trying to do here is to make sure that foreign
actors aren't meddling in US elections. Right, and even if you require Facebook or you know whoever is buying this advertisement to say it was paid for by X, if you're really trying to be sneaky, there's always ways around it. Right. This is the Internet, this is technology. They can use VPNs, they can use currencies that are not you know, if this is if these are Russian actors, they can use currencies that are not from Russia. There's all these ways
that you can get around it. And that's what the technology companies are saying. They said, you know, the representative from Pritter even use the phrase whack a mole when it came to trying to stop, you know, foreign actors from using nefarious ways to get onto social networks. Yeah. I do hate to end this conversation on a pessimistic note, but but it has been true throughout the history of the Internet. Bad actors do find a way around bottlenecks
instilled by regulation. Ye it looks like that. All right, Well, thank you, Garrett Vinc, Thank you, and that's it for this week's episode of Decrypted. Thanks for listening. Do you have a story about fake news that has affected you to send us an email at Decrypted at Bloomberg dot net, or you can reach us on Twitter. I'm Garrett Vink and I'm at Garrett D. That's g E R R I T D and I'm at at brad Stone. If you haven't already, please subscribe to our show wherever you
get your podcasts. And while you're there, I hope you take a minute to leave us a rating or a review that does so much to get us in front of more listeners. This episode was produced by Pio Gukari, Liz Smith, and Magnus Hendrickson. We'll see you next week.