Roger McNamee, an early Facebook investor and former adviser to Mark Zuckerberg, has praised whistleblower Frances Haugen for coming forward with explosive claims about the social media giant and has called for strong regulations to stop harmful technologies.
Mr McNamee, who wrote the book Zucked: Waking up to the Facebook Catastrophe in 2019, said the California-based social site often shifts responsibility for its shortcomings to others, including users.
“All incentives direct the company to stay on its current course … because many other companies are imitating Facebook in the hopes of profit, fixing Facebook will not be enough,” Mr McNamee wrote in Time magazine.
“Every time Facebook faces pressure for change, it does something that sounds helpful but is not.”
Facebook and Mr Zuckerberg faced blistering criticism over the company’s practices and policies during testimony from Ms Haugen on Tuesday.
The former Facebook employee told a Senate commerce sub-committee hearing that Facebook algorithms promote posts with high levels of engagement, often pushing harmful or divisive content to users.
This "dangerous online talk has led to actual violence that harms and even kills people", she told legislators, noting that Facebook is "accountable to no one".
Before appearing before the Senate, Ms Haugen went on national US television on Sunday evening. This was followed by a nearly six-hour Facebook breakdown – along with its associated services WhatsApp and Instagram – on Monday.
The sudden disruption was caused by a domain name server issue, bringing a big chunk of online activity to a halt.
“Their communications systems have become central to our way of life, as the impact of this week’s … outage underscores, but they have their thumb on the scale, amplifying content that triggers fear and outrage because doing so maximises profits,” said Mr McNamee.
He said Ms Haugen, a data scientist from Iowa, has transformed the conversation about technology reform and accomplished more than what he and others had achieved in years of effort.
Ms Haugen, who began working for the company in 2019 and resigned in April 2021, leaked internal documents to The Wall Street Journal, the Securities and Exchange Commission, Congress and other news outlets.
Mr McNamee said it is evident that policymakers and media have constantly miscalculated the danger posed by Facebook, “buying into the company’s rosy claims” about the power of connecting the world and giving benefit of the doubt where none was deserved.
The tech industry is mainly unregulated, allowing big companies like Facebook to behave as “unelected governments”, he added.
“We need something like an FDA [Food and Drug Administration] for technology products … it would set safety standards, require annual safety audits and certification as a condition for every product and impose huge financial penalties for any harms that result,” Mr McNamee wrote.
He also condemned the practice of “surveillance capitalism”, whereby companies sell every last scrap of personal data they gather.
Surveillance capitalism is profitable for Facebook because users make decisions in predictable ways, “which facilitates manipulation”.
“Everything we do on a smartphone, every financial transaction we make, every trip, every prescription and medical test, every action we take on the Internet or in apps is tracked and most of it is available for purchase in a data marketplace,” he said.
He recommended regulations that would address three problems across tech – safety, privacy and competition.
“At a minimum, Congress must ban third-party use of sensitive data, such as that related to health, location, financial transactions, web browsing and app data," Mr McNamee wrote.
Mr Zuckerberg has disputed the allegations.
“It’s difficult to see coverage that misrepresents our work and our motives. At the most basic level, I think most of us just don’t recognise the false picture of the company that is being painted,” he said in a Facebook post.
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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