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Whistleblower Says Facebook Won't Change Without More Regulation

Frances Haugen shared disclosures that prove Facebook repeatedly misled the public, choosing to grow at all costs and favoring its profits over user safety.

Facebook  (FB) - Get Facebook, Inc. Class A Report whistleblower Frances Haugen on Tuesday urged members of Congress to change the regulatory framework the social networking giant operates under or it will continue to favor corporate profits over the safety of its users.

"As long as Facebook is operating in the shadows, hiding its research from public scrutiny, it is unaccountable. Until incentives change Facebook will not change. Left alone Facebook will continue to make choices that go against common good, our common good," said Haguen in her opening remarks during a Senate Commerce subcommittee hearing.

"The severity of this crisis demands that we break out of our previous regulatory frames," she added.

Shares of the Menlo Park, Calif., company on Tuesday closed 2.06% higher at $332.96.

Haugen has worked as a product manager at large tech companies since 2006 including Google  (GOOGL) - Get Alphabet Inc. Class A Report, Pinterest, Yelp and Facebook. Her work has largely focused on algorithmic products like Google Plus search and recommendation-related decisions that power the Facebook NewsFeed.

"I understand how complex and nuanced these problems are. However, the choices being made inside Facebook are disastrous -- for our children, for our public safety, for our privacy and for our democracy," she said.

The tech giant needs to be willing to accept some trade-offs on profit, she reiterated.

"I saw Facebook repeatedly encounter conflicts between its own profits and our safety. Facebook consistently resolved these conflicts in favor of its own profits. The result has been more division, more harm, more lies, more threats and more combat," she said.

Haugen submitted documents to lawmakers that prove Facebook has repeatedly misled the public about "safety of children, the efficacy of its artificial intelligence systems, and its role in spreading divisive and extreme messages."

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Facebook said it did not agree with Haugen' characterization of the company but agreed it was time to create standard rules for the Internet.

On Sunday, the former Facebook product manager, in an interview on CBS's "60 Minutes" said, "There were conflicts of interest between what was good for the public and what was good for Facebook. And Facebook over and over again chose to optimize for its own interests like making more money."

Haugen's legal counsel has reportedly filed at least eight complaints about Facebook with the U.S. Securities and Exchange Commission.

Facebook's services including affiliates Instagram and WhatsApp were down for about six hours Monday, one of the longest outages in the history of Facebook. 

The shut down was caused by a faulty configuration change. "We also have no evidence that user data was compromised as a result of this downtime," it said in a blog post.

"Yesterday, Facebook had a platform outage. But for years, it has had a principles outage. Its only principle is profit," said Sen. Ed Marky.

Facebook has focused on scale over safety and dissolved its civic integrity teams after the 2020 presidential election, said Haugen.

"This is not simply a matter of certain social media users being angry or unstable or about one side being radicalized against the other. It is about Facebook choosing to grow at all costs, becoming an almost trillion dollar company and buying its profits with our safety," said Haugen.

"Congress can change the rules Facebook plays by and stop the many harms it is now causing," she added.

Facebook is expected to report its third-quarter earnings in the first week of November.