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Home / Business / Zuckerberg will not answer for the Vågenforbundet at the hearing

Zuckerberg will not answer for the Vågenforbundet at the hearing



House Financial Services Committee lawmakers hope to get answers right from the top about Facebook's new cryptocurrency plans during Wednesday's hearing.

Less than satisfied with the responses during a July hearing from David Marcus, the executive director of Facebook's Libra project, committee members asked Facebook Chief Mark Zuckerberg to testify in front of the committee itself.

"I think it's important that we get Mr. Zuckerberg in front of the committee," Rep. Sylvia Garcia, D-Tex., Said that time. "Obviously this is his brainchild, and this is his company, and I think he would be the one with the answers."

But when Zuckerberg meets with the representatives Wednesday, he'll probably tell them that for many of their questions, they still have the wrong guy.

"By design, we do not expect to lead the effort forward," Zuckerberg will tell lawmakers about Facebook's commitment to libra, according to his prepared remarks.

Marcus told reporters that much at a dinner last week after the formal establishment of the Libra Association, the nonprofit that is going to control the cryptocurrency. Twenty-one members, including Facebook, Uber and Lyft, now officially form the group, each with a single vote, giving them power to decide who joins or is expelled from the organization and what rules will govern the currency.

Marcus said at dinner that Zuckerberg could certainly "share his own views, but he cannot engage or commit to anything on behalf of the association because he has no power to do so anymore," shared a Politico reporter at Twitter after the event.

Now for comment on how Zuckerberg plans to record libra during his testimony Wednesday, a Facebook spokesman pointed to Zuckerberg's prepared remarks.

Such a response from Zuckerberg may not play well with the representatives who brought him to Capitol Hill.

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9659002] "The origin of this idea was at Facebook, and now one of the senior executives is a key board member," a congressional staff familiar with the minds of members of the financial services com committee told CNBC in an email. "If Zuckerberg tries to downplay Facebook's influence in the development of libra, it will come across as unpleasant and probably not well received by members."

Since it first announced its cryptocurrency plans, Facebook has been trying to divert attention from itself by pointing to the company's prominent supporters, which included major payment companies such as Visa, Mastercard and Stripe. These companies have all since dropped out of the project after the senators warned them to "proceed with caution."

House leaders are likely to examine the leaner group of founding members, as they did during the last hearing. Rep. Alexandria Ocasio-Cortez, DN.Y., was enrolled on Libra's management last time, stressing that the members controlling the currency are companies and not democratically elected.

What lawmakers could get from Zuckerberg this time is a firmer commitment to Facebook's role in the Vågenforbundet, if not in the currency itself.

"Although the Guardianship is independent and we do not control it, I will be clear: Facebook will not be part of launching the libra payout system anywhere in the world until US regulators approve," says Zuckerberg's prepared testimony.

Zuckerberg will certainly face questions that go far beyond Facebook's commitment to the new currency. Lawmakers are ready to seize the rare opportunity to talk to the executive and under oath. In previous testimonies, Congress leaders have asked why consumers should trust Facebook with their money given their previous privacy scandals.

Facebook is currently facing several investigations into competition practices, including by the Federal Trade Commission and 47 attorneys general from US states and territories.

Rep. Ro Khanna, the Democrat who represents the California district that includes Silicon Valley, said Facebook should focus on getting its house in order before embarking on a new project like Libra.

"I just think they should first regain confidence in the core business model," Khanna, who is not a member of the House Financial Services Committee, said in an interview with CNBC in his office Monday. "I mean they have two billion people communicating, and they affect democracy, and they affect people's children and they affect a way of life. I think that's a lot to bite off of."

Khanna said he understands Zuckerberg's impetus to push the boundaries of what the company can do because the CEO is an "innovator." But that's not enough anymore.

"What I want to say to Mark when I see him next is that he has a greater responsibility now than just being an innovator," Khanna said. Making sure that the tools he made are not misused are "such a big, worthy project that I hope he would spend a lot of his energy on it."

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