Skip to main content

Big tech is in the hot seat again.

Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg are due to testify on Wednesday before the U.S. Senate Select Committee on Intelligence in an extended grilling that will cover foreign influence operations on U.S. elections.

With the November midterms just two months away, the testimony may shed light on how prepared the companies are to fend off election interference -- and what they've done to combat abuse and fake accounts on their platforms, an issue that kneecapped the social media stocks last quarter. Since reporting their earnings in July, Twitter (TWTR) - Get Twitter, Inc. Report is down 18% and Facebook (FB) - Get Meta Platforms Inc. Class A Report is down 19%.

Facebook CEO Mark Zuckerberg testified before Congress for two days in April in connection with Facebook's misuse of user data and the Cambridge Analytica scandal, during and after which the stock regained much of its losses over the previous few weeks. On Wednesday, Sandberg could face a pointed line of follow-up questions on what Facebook has discovered since the scandal. 

"Facebook said they were going to do an in-depth review on third-party access to user data and report back to the Hill," Theresa Payton, a former White House CIO under President George W. Bush and CEO of cybersecurity firm Fortalice Soultions, told TheStreet. "In the first place, they'll ask: Have you finished your third-party data review, and what's the final verdict? I would also ask all of them, in the name of shutting down fake personas, how do you also ensure you are protecting the right to free speech?" 

In addition to facing questioning on foreign influence operations, Dorsey will also provide testimony on political bias to the House Committee on Energy and Commerce. The Twitter chief released a written statement to the Committee denying that the company's crackdowns on fake or abusive accounts are politically motivated: "From a simple business perspective and to serve the public conversation, Twitter is incentivized to keep all voices on the platform," Dorsey wrote.

TheStreet Recommends

In the past, Alphabet (GOOGL) - Get Alphabet Inc. Class A Report has mostly avoided the criticism that Facebook and Twitter have faced over fake accounts, Russian disinformation campaigns and related issues. Last week, however, Google Search was suddenly thrust into the limelight thanks to a tweet by President Trump claiming that search results are "rigged."

Separately, however, Alphabet may have raised the hackles of some members of the Senate because the company won't be sending its CEO, Larry Page. Page was invited by the committee in July, but instead offered its chief legal officer, Kent Walker, an offer that was rejected by the Committee.

In lieu of an appearance, Walker on Tuesday published a blog post and written testimony that outlined the company's efforts to prevent foreign interference on their platform, including a verification system for political ads and various cybersecurity initiatives. "While the nature of our services and the way we run our advertising operations appears to have limited the amount of state-sponsored interference on our platforms, no system is perfect and we are committed to taking continuing action to address the issue," Walker wrote.

Walker's statement likely won't be enough to satisfy Congress, Payton added. 

"They're going to want more follow up from Google," she said. "No company that trades in consumer information and curates and provides content on the Internet is going to be immune from this line of questioning."

On Tuesday, shares of Twitter were down 1% to $34.84, while Facebook shares fell 2.6% to $171.16 and Alphabet dipped 1.7% to $1,211.31. 

Facebook and Alphabet are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells FB or GOOGL? Learn more now.

Start, and end, your trading day right with TheStreet's 'Daily Snapshot' on your favorite smart-speaker. Learn more about TheStreet's market coverage for your trusted smart-speaker here.