Facebook CEO to Testify at House Panel About Libra -- Update
October 09 2019 - 3:54PM
Dow Jones News
By Bowdeya Tweh and Peter Rudegeair
Facebook Inc. Chief Executive Mark Zuckerberg is slated to
return to Capitol Hill this month to testify before a House panel
about the company's foray into cryptocurrency, just weeks after
facing a chilly reception from lawmakers about his vision for
internet regulation.
The House Financial Services Committee said Wednesday that Mr.
Zuckerberg will be the sole witness at an Oct. 23 hearing that
examines Facebook's impact on the financial services and housing
sectors.
Facebook in June revealed plans to launch a new cryptocurrency,
known as libra, and digital wallet, called calibra, that could be
used to pay for goods online and send money world-wide.
Since the project was announced, it has received a steady stream
of criticism from lawmakers in the U.S. and other countries based
on Facebook's prior missteps in data privacy and skepticism that
the company could prevent libra from being used to launder money.
House Financial Services Committee Chairwoman Rep. Maxine Waters
(D, Calif.), and other Democrats have called on Facebook to abandon
plans to implement libra.
Mr. Zuckerberg has said Facebook wouldn't move forward with the
project in the U.S. until it had satisfied regulatory concerns. The
company has touted the project as having the potential to help
provide basic financial services to people who lack bank
accounts.
"Mark looks forward to testifying before the House Financial
Services Committee and responding to lawmakers' questions," a
Facebook spokesman said in a statement. Company executive David
Marcus faced wide criticism in July during a Senate Banking
Committee hearing focused on libra.
Mr. Zuckerberg, who also serves as Facebook chairman, met last
month with President Trump and members of Congress to address
various issues involving the social-media giant. He also spent two
days on Capitol Hill last year parrying questions from lawmakers,
some of whom called for stronger regulation of Facebook given its
dominant market position.
Facebook has hired seven additional lobbying firms to work on
financial issues and cryptocurrencies since June, federal
disclosures show. The roster of lobbyists includes former
congressional staff members from both parties, such as two former
aides to Senate Banking Committee Chairman Mike Crapo (R.,
Idaho).
Facebook's lobbyists have emphasized to congressional staffers a
willingness to work with U.S. authorities. After receiving a letter
in late September from Mr. Marcus, the Facebook executive in charge
of libra, Rep. Emanuel Cleaver (D., Mo.), a senior member of the
House Financial Services Committee, said: "Their desire to be
transparent in this process is a good start."
Mr. Zuckerberg's pending Washington visit comes as partners in
the proposed cryptocurrency-based payments network are
reconsidering their involvement. PayPal Holdings Inc. said earlier
this month it would withdraw from the group, but remained
supportive of libra's mission.
Mr. Zuckerberg's appearance on the Hill would come a little over
a week after the roughly two dozen companies it recruited to help
launch libra are slated to meet in Geneva. The Libra Association on
Monday will discuss the future of the libra payments network and
appoint a board to oversee it, and the meeting's outcome will
likely bear on Mr. Zuckerberg's congressional testimony.
If Visa Inc., Mastercard Inc. or other big companies commit to
moving forward with libra and agree to have their representatives
sit on its board, that could neuter complaints that Facebook is
dominating the project. But if more companies follow PayPal's lead
and withdraw, that would make it harder for the social-media giant
to argue that it doesn't have outsize control over libra's
future.
Hanging over the libra discussions is how Facebook and other
members in the Libra Association can assuage politicians' worries
that the payments network could be used to launder money or finance
terrorism. A pair of U.S. senators wrote to the CEOs of payments
companies Visa, Mastercard and Stripe Inc. this week to voice their
concerns over how libra will comply with financial regulations.
"If you take this on, you can expect a high level of scrutiny
from regulators not only on Libra-related payment activities, but
on all payment activities," the senators wrote.
European regulators issued a stern rebuke of Facebook's efforts
this week, saying libra had the potential to undermine the euro and
that legislation would be introduced to block the digital
currency's usage.
U.S. agencies have already moved to stiffen regulatory scrutiny
of Facebook's business since Mr. Zuckerberg's Capitol Hill visit
last year.
Federal regulators as well as a bipartisan group of state
attorneys general have launched antitrust probes into Facebook and
other large U.S. technology companies.
The Department of Housing and Urban Development has accused
Facebook of violating the fair-housing rules by allowing
real-estate firms to target customers by race, religion and other
factors. Facebook has said it is working to address concerns from
the agency.
Separately, the Federal Trade Commission levied a roughly $5
billion fine in July on Facebook to close a long-running probe into
data-privacy issues.
--Ryan Tracy contributed to this article
Write to Bowdeya Tweh at Bowdeya.Tweh@wsj.com and Peter
Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
October 09, 2019 15:39 ET (19:39 GMT)
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