Frances Haugen: Breaking up Meta won’t fix this bigger problem

Frances Haugen became a household name after leaking thousands of pages of Facebook’s internal documents showing problems at the social media giant on topics ranging from its impact on young people to how it treated high-profile users to a lack of action that allowed misinformation to spread.

And in a new conversation roughly six months after those documents first started to become public, Haugen spoke with Yahoo Finance Editor-in-Chief Andy Serwer about how lawmakers should tackle problems at Facebook, which has since been renamed Meta Platforms (FB).

She suggests that lawmakers' calls to break up the tech giant — which owns WhatsApp, Instagram, and Facebook Messenger — might not actually fix its biggest problem. That problem, according to Haugen, is a lack of transparency that has allowed the company to put profits over public safety.

“You're just going to see the problems repeat,” she said of a potential breakup of Facebook. “Unless we have mandated transparency, the incentives will stay the same.”

But much of the focus in Washington in recent years has indeed centered around the question of breaking these platforms up.

Federal Trade Commission chair Lina Khan has focused much of her energy so far on antitrust issues around Meta as well as Amazon (AMZN). Khan’s agency is currently in the middle of a lawsuit that claims Facebook’s 2012 acquisition of Instagram followed by its 2014 purchase of WhatsApp represented an illegal “anticompetitive shopping spree” aimed at perpetrating the company’s monopoly. Meanwhile, the Department of Justice is overseeing inquiries into Apple (AAPL) and Alphabet (GOOG), the parent company of Google, also largely on antitrust grounds.

'As long as we're arguing about censorship, we're not going to hold them accountable'

Haugen also doesn’t think it will help if Washington makes a move to censor the companies. Lawmakers on both sides of the aisle in Washington have floated ideas to rein in the content on social media. But they have different approaches to doing that.

Some on the left have focused on problems like medical misinformation on the platforms while many Republican lawmakers contend the social network silences conservative voices.

“Facebook knows that as long as we think the argument is about censorship...we will never resolve it,” Haugen says. “But what Facebook knows is that there's lots of solutions that don't involve content, they involve the dynamics of the algorithm.”

Before she blew the whistle on Meta, Haugen earned a degree in electrical and computer engineering and worked on promoting democracy and eliminating misinformation as the lead product manager on the company’s civic misinformation team.

In 2021, she turned on her employer and delivered tens of thousands of Facebook's internal documents to the U.S. Securities and Exchange Commission as well The Wall Street Journal, which produced a long series of stories from the documents. Other news outlets also obtained some of the documents and published related stories.

She says she became alarmed and made her move when she saw "the information that Facebook was withholding from the public was critical to public safety.”

‘Nutrition labels’

Haugen has now appeared before Congress multiple times as well as before the European Parliament, where she has outlined problems at Facebook and warned against "inaction" by policymakers.

She says there might be a space for productive action in Washington even amid all the noise.

“The main thing that I think there's a point of common ground is people on the left and on the right believe that people have the right to make informed choices, that you only really can consent or voluntarily choose to do something if you have enough information to make that choice,” she says. “And so I've been pushing for what I call nutrition labels.”

The idea is modeled off of the U.S. government's move in the 1970s to provide standardized labels on processed food for both the ingredients and the nutritional values of products for sale.

Haugen notes as an example that the government never banned trans fats. But, she added, “as soon as consumers had that information, it disappeared from all their products.”

Apple already applies the concept with Privacy Nutrition Labels designed to give iPhone users information on the apps they download. The idea of a broader label implemented by the Federal Trade Commission has bounced around Washington for years.

Haugen says that “the public has a right to have real data...on how these platforms work, so they can make choices.”

Targeting ‘algorithmic amplification’

Washington is also debating a range of ideas on algorithms, another focus of Haugens. One such effort would amend Section 230 of the Communications Decency Act, the law that allows platforms to operate without being held liable for third-party content posted on their platform.

The Protecting Americans from Dangerous Algorithms Act would “hold large social media platforms accountable for their algorithmic amplification of harmful, radicalizing content that leads to offline violence.” The bill would preserve most elements of Section 230 but open up the platform to lawsuits specifically around their algorithms.

Haugen says she isn’t in favor of a full repeal of Section 230. However, she cautions: "I think Facebook should be responsible for that content because they've made a bunch of intentional product choices that were in their business interest that we have paid the cost of, in terms of more extreme content, in terms of rabbit holes people are getting sucked into."

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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