National Capital Chapter

Facebook Fights Back – Right Move?

By Lawrence J. Parnell

The latest installment of The Wall Street Journal (WSJ) series The Facebook Files chronicles Facebook/Meta’s aggressive response to a whistleblower’s damaging congressional testimony and subsequent media interviews last October.

Frances Haughen, a former senior executive, provided documents and riveting testimony in October 2021 that shook the company from its lofty position.

During four congressional hearings and follow-up media coverage, which included a “60 Minutes” interview with Haughen, Facebook was frequently compared to “Big Tobacco” and its coverup of damaging internal research on nicotine. Others cited the fossil fuel industry (“Big Oil”) and its efforts to impede reforms aimed at managing climate change. Neither are flattering comparisons — to be sure.

For several days the story led on all the news platforms, dominated conversation on line, and stirred concern among employees, creating serious challenges to the company’s reputation. Wall Street did not react well either. The WSJ notes there was “… a 9% decline in the company’s stock price” since the testimony and their coverage of the leaked reports first broke.  Recently the stock price has recovered, but the bad news keeps coming for Meta.

In mid-January 2022, the congressional committee investigating the January 6 insurrection issued subpoenas to Meta (and other social media companies) seeking information on how social media was used to plan the assault on the U.S. Capitol.

Just last month, Facebook/Meta was sued for not alerting authorities to a plot, hatched on Facebook by extremists, to attack a federal courthouse in Oakland, Calif. The attack resulted in the death of the plaintiff’s brother and serious injury to another federal officer on duty at the time.

Faced with these enormous challenges to its reputation, how has Facebook/Meta responded?

Meta’s response to the whistleblower’s revelations has been a multifaceted communications and political strategy to “muddy the waters” and publicly cast doubt on her character and motivation. No doubt the company will resist the latest pressure from Congress as well, having already denied the January 6 committee’s request to provide this information voluntarily.

The “sharp elbowed” approach by Meta to public and political pressure, has included targeted messages to members of Congress about overreach by regulators; courting of conservative media and activists; and changes to policies to restrict employee access to company research and documents. As well, the company has claimed it is exempt under FCC rules from litigation for criminal behavior originating on its platform – such as the Jan 6  insurrection or the murder of the court officer in Oakland.

Perhaps those comparisons to Big Oil and Big Tobacco were not so farfetched after all…

Clearly, the issue of accountability remains alive in 2022 and will be revisited constantly until there is some resolution.

There is bipartisan pressure in Congress to address the many issues that have been raised. The motivation is simple: it’s a winning issue for both sides and will be exploited in the run up to the 2022 midterm elections.

Further, there is increasing concern among Meta’s large, institutional investors about the impact on the company . The WSJ reports that during an investor call in November, investors were “disappointed” with management’s response.  Likely these concerns – and others – will be raised in the year-end analyst call as well.

So, what should the company do?

Surrounded by politicians, investors, media, employees, and the public, Facebook/Meta should demonstrate a willingness to adjust its business model and accept reasonable – and inevitable — regulation. Where possible, it should show some compassion for victims of criminal behavior originating on its site as well.

In my view, maintaining this aggressive (and borderline unethical) strategy will result in more strict regulation, limitations on its business model, and lasting damage to the company’s reputation.

One need only look at Big Tobacco and Big Oil for a glimpse at Meta’s future if the company refuse to adjust on its own.

Lawrence J. Parnell
Associate Professor – Strategic PR
The George Washington University
Graduate School of Political Management