META Meta Platforms Inc

By Emily Glazer, Deepa Seetharaman and Jeff Horwitz 

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 (December 18, 2019).

Facebook Inc.'s senior leadership is increasingly divided over how to address criticism of the company's effect on U.S. politics, with board member and billionaire investor Peter Thiel serving as an influential voice advising CEO Mark Zuckerberg not to bow to public pressure, according to people familiar with the matter.

One flashpoint of late: political advertisements. Mr. Thiel has argued that Facebook should stick to its controversial decision, announced in September, to continue accepting them and to not fact-check those from politicians, the people said. However, some directors and executives are pushing for changes to the policy, including possibly banning political ads altogether, they said.

Mr. Zuckerberg and other Facebook executives have said publicly that the company continues to consider potential changes related to political ads.

"Many of the decisions we're making at Facebook come with difficult trade-offs and we're approaching them with careful rigor at all levels of the company, from the board of directors down," a Facebook spokesman said. "We're fortunate to have a board with diverse experiences and perspectives so we can ensure debate that reflects a cross section of views."

Mr. Thiel declined to comment.

The reaction to Facebook's decision on political ads, presented in October by Mr. Zuckerberg as a commitment to free speech, largely broke along party lines. Most Republicans, including members of the Trump reelection campaign, praised the decision, while many Democrats argued the company should do more to potentially limit the spread of misinformation. In the 2016 election, political actors used tech platforms to spread misleading or false information to specific groups of people.

The tensions within Facebook's leadership are emerging as the social-media giant grapples with mounting political challenges less than a year before the 2020 election. Facebook is the subject of several federal and state regulatory investigations, including by the Justice Department, over antitrust concerns and alleged privacy violations. Lawmakers from both parties have criticized the company for what they see as transgressions related to how it polices the site.

Facebook officials, including Mr. Zuckerberg, have vowed to fix the litany of problems confronting the company, but there is "pretty vigorous disagreement" among the leadership over how to tackle its political issues, one person familiar with the discussions said.

Some of Mr. Thiel's views are shared by others within Facebook, including on political ads, with many current and former executives advising Mr. Zuckerberg that the company shouldn't be in the position of deciding what claims are accurate, people familiar with the matter said. Others, including many rank-and-file employees, argue that Facebook's decision cuts against its yearslong fight to combat misinformation, they said.

Some close to the company say Mr. Thiel is extending his influence while the company's board and senior ranks are in flux. Over the past two years, more than a dozen senior executives have left or announced plans to leave Facebook.

This year alone, three longtime board members left, including lead independent director Sue Desmond-Hellmann. In April, Facebook said Netflix Inc. CEO Reed Hastings and former White House chief of staff Erskine Bowles wouldn't stand for re-election. Both men periodically had tensions with Mr. Thiel over politics, people familiar with the relationships said. Facebook hasn't yet named a new lead independent director.

Mr. Thiel's outspoken conservative and libertarian views have put him out of step with the largely liberal community of Silicon Valley. Mr. Zuckerberg has long valued Mr. Thiel's advice. Some people close to both men described their current relationship as an alliance, based in part on their long history together.

Mr. Thiel, 52 years old, was the first outside investor in Facebook, and ultimately made more than $1 billion on his stake. Early on, Mr. Thiel advised Mr. Zuckerberg, now 35, to focus on growing the Facebook platform's user base rather than on making money, contrarian advice at the time that laid the groundwork for Facebook's riches today. Mr. Thiel and his funds have since sold off most of their Facebook shares.

More recently, Mr. Thiel, a Republican who backed Donald Trump in his 2016 presidential campaign, has been helping Mr. Zuckerberg understand the dynamics within the Trump White House, people familiar with their relationship said. Ahead of the Facebook co-founder's October trip to Washington, D.C., the two met and talked privately to discuss strategy, one of the people said. On that trip, Mr. Zuckerberg spoke about the political-ads issue at Georgetown University and testified on Capitol Hill. Messrs. Zuckerberg and Thiel also had a private dinner at the White House with Mr. Trump in October. NBC News previously reported the dinner.

Mr. Thiel has sat on Facebook's board since April 2005 and is currently chair of Facebook's compensation, nominating and governance committee, which oversees succession planning and director nominations.

Mr. Zuckerberg and Chief Operating Officer Sheryl Sandberg have said repeatedly that they value ideological diversity on the board, although that view isn't shared by all of the company's workforce.

"Mark is friends with Peter Thiel and a lot of Republicans," said a former Facebook employee who worked in its political group. "It's a reality people aren't willing to accept."

Last year, after it was disclosed that the data of 87 million users improperly wound up with Cambridge Analytica, Facebook directors scrambled to address the political fallout from the revelation, partly because the British political consulting firm had worked for the Trump campaign. Some Facebook directors wanted to create an outside advisory group that would analyze a range of problems confronting Facebook and offer potential solutions to the board, people familiar with the matter said. The group would have been small and included at least one conservative, the people said.

Mr. Thiel was strongly against the idea, the people said. The board never convened the group.

Mr. Thiel's status as the founder and chairman of Palantir Technologies Inc., a firm specializing in custom database creation and analysis, on at least one occasion raised internal worries at Facebook, a person familiar with the matter said. Christopher Wylie, the former Cambridge Analytica employee whose allegations of data misuse kicked off the controversy, told U.K. officials in a hearing last year that "senior Palantir employees" had worked with the wrongfully obtained Facebook data.

Palantir denied having done so, but Facebook staff were asked to look not just at Palantir's potential role in the scandal but also Mr. Thiel's, according to a person familiar with the review. Facebook feared that his status as a prominent Trump supporter and a board member at both companies would make any violation discovered especially damaging, the person said.

"Mark Z. and Sheryl have specifically asked for investigations team to look into Palantir," according to contemporaneous notes taken by a person briefed on the review. Among Facebook's options, the notes say, was to "potentially leverage relationship with Thiel to force Palantir to have conversation with FB regarding data abuse."

Palantir said it doesn't offer social-media data gathering to any client and only works with data obtained lawfully, adding that it had no knowledge of or involvement in Facebook's review.

Write to Emily Glazer at emily.glazer@wsj.com, Deepa Seetharaman at Deepa.Seetharaman@wsj.com and Jeff Horwitz at Jeff.Horwitz@wsj.com

(END) Dow Jones Newswires

December 18, 2019 02:47 ET (07:47 GMT)

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