META Meta Platforms Inc

Former politician joins a company under scrutiny

By Stu Woo in London and Deepa Seetharaman in San Francisco 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 20, 2018).

LONDON -- Facebook Inc. has hired one of Britain's best-known politicians as its top policy and communications executive, giving a Silicon Valley outsider the task of mending the social network's image as it deals with increased political scrutiny in the U.S. and abroad.

Facebook said Friday that Nick Clegg, who as deputy prime minister was Britain's No. 2 leader from 2010 to 2015, would replace Elliot Schrage, who said in June that he was stepping down.

Mr. Clegg starts his new job Monday and will move to California in January. Mr. Schrage will remain at Facebook and report to Chief Operating Officer Sheryl Sandberg as an adviser, focusing for now on helping Mr. Clegg transition to his new role, according to a Facebook spokeswoman.

Mr. Clegg's recruitment comes as trust in Facebook has eroded in 2018 and as Silicon Valley faces growing scrutiny from U.S. and European regulators on several fronts.

Facebook sparked outrage after allegations that data firm Cambridge Analytica improperly accessed information on tens of millions of Facebook users and over its disclosure last fall that Russian-backed propagandists had exploited the social network.

More recently, hackers believed to be spammers got access to the private information of 30 million Facebook users.

Facebook officials have been busy explaining the recent breach in Washington and to foreign governments, including the U.K. In Brussels, Facebook could face a European Union fine of as much as $1.63 billion.

Mr. Clegg, largely unknown in Silicon Valley, brings insight from one of Facebook's toughest battlegrounds. The 28-country European bloc increasingly sees itself as a bulwark against U.S. technology giants that it views as having too much power. It has probed the tax arrangements of U.S. tech companies including Apple Inc. and has clashed with Google on several fronts, most recently issuing the search giant a $5 billion fine for allegedly abusing the dominance of its Android mobile-phone software. Google is appealing.

The EU gained a new tool this spring when data-protection rules, called the General Data Protection Regulation, took effect. Regulators have the power to fine companies that don't comply.

Facebook Chief Executive Mark Zuckerberg and Ms. Sandberg spent a lot of time with Mr. Clegg before hiring him, said a person familiar with the process. Mr. Clegg started speaking to them this summer.

"This is an important time for Facebook. We have a lot of work to do to live up to our responsibilities and show the value we provide to the world. I'm looking forward to working with Nick and know his experience will be invaluable," Mr. Zuckerberg said in a statement.

In a Facebook post, Ms. Sandberg said the company faced serious challenges and "now more than ever" needed new perspectives.

The move is arguably Facebook's most high-profile external hire since poaching Ms. Sandberg from Google in 2008. As part of its search, Facebook spoke with a number of prominent public-policy and communications officials on Wall Street and some with ties to the Obama administration, according to people familiar with the process.

Among those who were interviewed or approached about the job were Denis McDonough, former White House chief of staff under Obama; Jay Carney, the former White House press secretary who is now senior vice president of global corporate affairs at Amazon.com; Jake Sullivan, a former senior policy adviser to Hillary Clinton's presidential campaign; and Jake Siewert, the head of corporate communications at Goldman Sachs Group Inc., according to people familiar with the process. Lisa Monaco, Mr. Obama's homeland-security and counterterrorism adviser between 2013 and 2017, was also approached for the role, one of the people said.

For the last decade, Facebook's policy and communications strategy has been set by Mr. Schrage, who currently reports to Ms. Sandberg. He has been the architect of Facebook's response to various controversies over the last two years, including the spread of misinformation during the 2016 U.S. presidential race.

Mr. Clegg will have to manage a hostile regulatory environment for tech companies as well as increasingly aggressive reporting by the media. Facebook insiders expect to face deeper regulation of its business; the new policy chief will play a major role in pushing for laws that favor the company.

That is particularly true in Europe, where Mr. Clegg has the most expertise and where EU Competition Commissioner Margrethe Vestager has emerged as one of the most aggressive regulators of big tech companies such as Facebook.

Mr. Clegg knows Brussels well, having previously worked for the European Commission, partly as a trade negotiator, before entering politics. He speaks several European languages, and was a European lawmaker. He said in a Facebook post Friday that the social network had a responsibility not only to users but also to society at large, and that it was at the heart of complex issues such as privacy and free speech.

Most Facebook executives have historically leaned to the left politically -- consistent with most of Silicon Valley -- and Mr. Clegg's appointment on the surface does little to provide protection from the right, which lately has battered tech giants over allegations of bias.

His appointment surprised Britain's political world Friday. He led the Liberal Democrats, a centrist group traditionally viewed as the country's third-biggest political party, from 2007 to 2015. He became deputy prime minister in 2010 after the Liberal Democrats joined the Conservatives in a governing coalition that lasted until his party faltered in the 2015 election. Mr. Clegg lost his own seat as a lawmaker in parliament in 2017.

Since then, Mr. Clegg has been a vocal advocate for the European Union, calling for a second referendum on the U.K.'s membership. Britain is set to leave the bloc in 2019.

The hire comes as Facebook's upper ranks undergo a major upheaval, which has contributed to infighting between Mr. Zuckerberg and other senior executives over the direction of the company.

In the past year, 10 senior and highly visible executives have left or announced their departures, including the co-founders of Instagram and WhatsApp, which Facebook bought years ago to power user and revenue growth. Longstanding lieutenants other than Mr. Schrage have also said they would step down, including Dan Rose, vice president of partnerships, and Colin Stretch, Facebook's general counsel.Meanwhile, several public funds holding Facebook stock are backing a proposal to push Mr. Zuckerberg out as board chairman.

Write to Stu Woo at Stu.Woo@wsj.com and Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

October 20, 2018 02:47 ET (06:47 GMT)

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