Congress members did their homework': Expert on big tech hearing

Director of the Tech Transparency Project Katie Paul and WIRED Politics Writer and Gilad Edelman joined Yahoo Finance Live to break down what to take away from the big tech hearing and what we may see from lawmakers in the coming months.

Video Transcript

SEANA SMITH: When we take a step back, I think the thought going into this hearing was that the other tech hearings have been called political theater, that Congress didn't really get to the bottom of the issues. I think we've gotten to the bottom of some of these issues, or at least a little bit more detail, especially when it comes to the algorithms and exactly what's being used to either moderate some content or promote other content. I'm curious just to get your take on whether or not you think that this hearing is a little bit more productive.

KATIE PAUL: Well, I think one thing that was notable right off the bat with this hearing is that Congress members did their homework. You see them asking very directed questions about not just the algorithms, but the business model. And this is something that we've seen them kind of evolve over hearings to ask. But when you see the yes and no questions with very specific examples from both sides of the aisle, I think it's clear that Congress members have done their homework, and they're gearing toward very pointed answers on things and not just accepting the usual spin.

ADAM SHAPIRO: Gilad, there was that documentary "The Social Dilemma," which actually helped explain to those of us who don't write code how the code, the business model for these platforms actually traps us into constantly using them. There was a question to one of the CEOs about, don't you keep trying to keep us there for longer and longer? And I was thinking, this person's about to answer with no. And then I thought, boy, your investors are going to want to hear that answer. So how do you as a CEO say, no, we're not trying to keep people on the platform for a long time, when in fact, that is what they're trying to do?

GILAD EDELMAN: This is absolutely the most interesting thing about what's been going on today. You hit on the key point. No one can take this seriously. It just-- it defies all logic and everything we know about how these companies do business. For Mark Zuckerberg and Jack Dorsey and Sundar Pichai to say that they don't make money by keeping people spending more time on the site. It's just absurd. We know that that's the case.

And I think that's really striking these companies. So it's quite right that the questions today, for as much of the political theater and chaos that there was, really reflect a more serious understanding on the part of the members of Congress of these underlying business models. And it's really striking that these CEOs cannot defend those business models. When asked, do you make more money by keeping people hooked on to your platforms, and they say no-- when we all know that the answer is yes-- that tells you something. They really don't have a way to defend what everybody at this point knows they're doing.

SEANA SMITH: Katie, I'm curious just to get your perspective on that. I mean, when we do hear that-- and it's not just from these CEOs. We've also heard similar comments made from Steve Jobs when he was the CEO of Apple. I mean, is this something that you think is valid? Or why do you think we hear these from a number of tech CEOs?

KATIE PAUL: Well, one of the things that is really interesting is at the beginning of the hearing, there was a question as to whether or not the CEOs were under oath, and why they would need the advice of counsel if they were not under oath. And not being under oath means that they can respond to Congress however they like. So these statements that their algorithms aren't pushing content meant to keep people on the platform that are demonstrably false really don't hold any sort of repercussions, which is notable.

But when you see the type of content that is being pushed, it's clear that these algorithms create a radicalization echo chamber. Just yesterday, the Tech Transparency Project released yet another report about the fact that Facebook is not only pushing users toward militia content, but actually creating pages for militia. This is something that the platform has been faced with many times before and still has yet to address.

ADAM SHAPIRO: Katie, I want to follow up on that, because there were pointed questions. I forget the congressperson who was asking it, but said, look, we found these sites last night. You're not pulling them down to Mark Zuckerberg. So what does Congress do next? We've heard the threat of breaking up the companies. But that's years out. What does Congress really do?

KATIE PAUL: Well, I think one of the things they're looking at doing-- and you kind of see it with the line of questioning-- is incentivizing the companies to remove the content, whether that's through fines or regulation. And there's been a lot of talk about changing section 230.

But these companies know this is coming. That's why you see Facebook continuing to lobby, pushing advertisements about the fact that they want regulation. But if you read Mark Zuckerberg's testimony from today, all of the things he's suggesting with regard to 230 reform would still immunize them for doing stuff that they're already doing to address content on the platform, which we know is not working. So Congress really needs to cut through that and ensure that the interference from these platforms through their lobbying efforts isn't really stopping what they're trying to do in terms of Congress.

And I think, you know, the fact that you also saw someone bring up USTR and the inclusion of potential 230 language in trade agreements shows that Congress is onto the fact that big tech is looking for alternative routes to keep this immunity.

SEANA SMITH: Katie and Gilad, stick with us here. We just want to bring in our other reporter, Alexis Keenan, here just for a little bit more conversation about the regulation and where we go from here. Alexis, I guess, how do you see that evolving?

ALEXIS KEENAN: Well, I think today, though, is just an example of it not evolving all that quickly. And we've known that that is a sticking point, because it has not been laid out by Congress exactly what the particular problem is. We have a lot of problems laid out, but we don't have a honing in on exactly what they want to do about it.

And so yes, we've heard about claims that these companies are abusing their 230 immunity by designing algorithms that amplify the discord on the platforms and that they act like publishers instead of good faith moderators. You know, and then we have these other things coming in talking about children and going down these different avenues, and protecting them, and how these companies are really promoting radical content, getting kids involved, getting them to stay on screen. Yes, a lot of problems.

But at the bottom line, you know, section 230 allows these internet services to not particularly be publishers. They are exempt from that. They do not have civil liability for restricting access or availability of what they deem to be objectionable content. They are private parties. They can do what they want under this law.

And so the question remains-- and I haven't heard it from any of the Q&A so far-- what are these solutions? We started to get into it a little bit with Zukerberg's proposal. Sundar Pichai has not really been pressed very hard on what Alphabet or Google would do. And then, of course, you have Jack Dorsey and Twitter saying, OK, we are putting forth these potential solutions where there would be sort of a crowdsourced solution. So I'd really like to see them drill down on solutions rather than, what are all of these problems that we've heard about so many times.

ADAM SHAPIRO: Gilad, is there a solution we could see from Congress addressing this issue of the algorithm in the business model that could come out within, say, one year?

GILAD EDELMAN: Well, the most interesting thing that's come up today that really made me sit up straight in my chair was when Congresswoman Eshoo almost offhandedly said that she was going to introduce legislation that would ban surveillance advertising. This is something that I've written about a lot. Surveillance advertising is a way of describing what is sometimes called behavioral microtargeting. This is the model of advertising that relies on tracking you everywhere you go online-- and offline for that matter, things like location tracking-- and then using that as the basis to serve your advertising.

And this is how these companies make their money. Facebook makes all of its money by serving personalized advertising. And it's kind of-- it's long been believed by a pretty small group of thinkers that getting rid of this business model would be the closest thing to a silver bullet for solving these myriad problems flowing from the social media companies. And so I was very interested to hear a member of Congress today actually propose that, because straight up banning things is not something that we've heard a lot.

We haven't heard a lot about that from Congress so far. It's much more, you know, calls for transparency, or maybe we should revised liability rules, or maybe-- let's investigate, investigate, investigate, and eventually we'll think of something. But the fact that Congresswoman Eshoo is going to introduce a bill doesn't mean it's going to happen. But if we want to talk about, are there concrete solutions, there's one. And it was just proposed today.