‘I’m disappointed’: early Facebook investor Reid Hoffman says social media giant has lost people’s trust for ‘good reasons’
Facebook Inc. has lost people’s trust “for good reasons” and isn’t responding well to whistle-blower claims that the social-media giant prioritizes profit over user safety, according to one of its earliest investors, Reid Hoffman.
“I’m disappointed,” Hoffman said Wednesday in an interview with Emily Chang on Bloomberg Television. Facebook should have been more proactive in response to troubling signs revealed in its own research, he said.
“Good for Facebook for doing the research,” Hoffman said. “You discovered some things that are harmful—what are you doing about it?”
Facebook is embroiled in controversy after a former employee, Frances Haugen, shared thousands of pages of internal research and documents. They depict a company struggling with content moderation, giving preferential treatment to high-profile accounts and weighing the mental-health harm caused by Instagram on teen girls.
Last month, the Wall Street Journal published some of the research provided by Haugen, who then testified on Oct. 5 before a panel of the Senate Commerce Committee. At the hearing, she slammed Facebook for not prioritizing the well-being of its users. The company’s founder and chief executive officer, Mark Zuckerberg, denied the characterization, saying it was “just not true.”
Hoffman, who is a partner at venture capital firm Greylock Partners and a co-founder of LinkedIn, said he hasn’t yet spoken to Zuckerberg but has offered his help with the crisis that the company is facing.
To regain trust, Facebook has to be “extra transparent,” he said. “They have to come forward and say, ‘Look, here’s our dashboards, here’s our metrics, here is the ways we are trying to work on this and do things.”
One particular area of scrutiny is the impact of Facebook’s services on children. In that area, Facebook’s products have the potential to be “great,” Hoffman said. They can be educational and engaging, but the company needs to study the topic and invest more in protecting minors, he said.
Facebook encountered a barrage of cross-aisle criticism from lawmakers during this month’s hearing, with Antigone Davis, the company’s global head of safety, defending its practices.
“Facebook knows its products can be addictive and toxic for children,” Democratic Senator Richard Blumenthal, the chairman of the subcommittee presiding over the hearing, said at the time. “They value their profit more than the pain they caused children and families.”
The company also is contending with lawmakers’ claims that it has become a monopoly following the acquisition of Instagram in 2012 and the 2014 takeover of WhatsApp—two deals that weren’t fought by antitrust regulators at the time.
Hoffman argued that breaking up the company would be the wrong course of action and could hamper technological developments that improve consumer safety. Instead, Facebook should set up a centralized way of tracking the impacts of its platform, he said.
“I precisely think the wrong answer is breakup,” he said. “Start with accountability, start with transparency, start with a dialogue of what you’re doing. See if you need regulation from that point of view.”
More tech coverage from Fortune:
- How tech companies are trying to prevent ethical lapses around A.I.
- Tesla’s overseas diehards question their faith as Elon Musk opens self-driving FSD beta—but only in the U.S.
- ClassPass gets acquired by Mindbody—but doesn’t rule out IPO
- Safety officials want to know why Tesla didn’t issue a recall for critical software issues
- Everyone should care about NFTs, says Andreessen Horowitz’s Katie Haun
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.