published Nov 15, 2018, 2:07:49 PM, by Ben Brody and Zoltan Simon
(Bloomberg) —

Facebook Inc. is coming under renewed fire for how it handled the spread of fake news and misinformation on its social network, including using aggressive tactics to discredit critics.

In the wake of a scathing newspaper report on the company’s approach to managing a deepening crisis, Facebook said Thursday that it ended its work with a Republican public affairs firm that had drawn links between enemies of the company and billionaire financier George Soros.

The move to cut ties with Definers Public Affairs came after the New York Times detailed the firm’s work amid widespread turmoil at the social media giant as it dealt with the discovery of Russian meddling in the U.S. presidential elections and data privacy breaches.

The newspaper said Definers tried to deflect criticism of Facebook by encouraging reporters to look into rivals like Google and to pursue stories about Soros stoking anti-Facebook backlash in Washington. Soros, 88, has been a frequent detractor of Facebook, calling it a “ menace” earlier this year.

Facebook issued a lengthy rebuttal to the story Thursday, denying that it asked Definers to pay for or write articles on its behalf or pushed journalists to spread misinformation. Without naming Soros, a Hungarian-born Holocaust-survivor, the company said its actions weren’t aimed at fueling anti-Semitic conspiracy theories. Rather, it said it encouraged reporters to look into the funding of anti-Facebook groups, most notably Freedom From Facebook, “to demonstrate that it was not simply a spontaneous grassroots campaign, as it claimed, but supported by a well-known critic of our company.”

Soros Group Denounces Facebook Over ‘Reprehensible’ Campaign

Facebook’s board also defended Chief Executive Officer Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg for the way the company responded to the Russian disinformation campaign on the social network.

“As Mark and Sheryl made clear to Congress, the company was too slow to spot Russian interference, and too slow to take action,” Facebook’s directors said in a statement. “As a board we did indeed push them to move faster. But to suggest that they knew about Russian interference and either tried to ignore it or prevent investigations into what had happened is grossly unfair.”

The Times story suggested Sandberg and Zuckerberg weren’t as involved with the serious issues facing the company as they should have been and instead were more concerned about continuing to defend Facebook’s reputation and embarked on an aggressive lobbying campaign to fend off critics.

“To suggest that we weren’t interested in knowing the truth, or that we were trying to hide what we knew, or that we tried to prevent investigations is simply untrue,” Zuckerberg said on a conference call with reporters.

Facebook shares dipped as much as 2.4 percent before recouping some losses. They were little changed at $143.58 at 2:10 p.m. in New York.

A longtime financial backer of Democratic causes and politicians, Soros is a favorite bogeyman of the right wing, which accuses him of anti-American plots. Last month, a suspected bomb was discovered in the mail of his New York home, the first of a dozen sent to Democratic and liberal figures including former President Barack Obama and Hillary Clinton.

Patrick Gaspard, president of Soros’s Open Society Foundations, called the use of Soros “reprehensible” in a letter to Sandberg

“These efforts appear to have been part of a deliberate strategy to distract from the very real accountability problems your company continues to grapple with,” Gaspard wrote in the letter, which he also sent to Zuckerberg, the company’s board members and congressional leaders.

Soros and his Open Society Foundations did give money to at least one of the component groups that make up Freedom From Facebook, an anti-Facebook group. Open Society Foundations has also funded other groups that criticized Facebook, although the support wasn’t directed at the anti-Facebook activities, a foundation official said. Freedom From Facebook wrote to the Federal Trade Commission on Thursday to reiterate its belief that the agency should seek fines against Facebook for alleged violations of a prior consent order. Facebook has said it has not violated the order, although the FTC is investigating.

Definers, founded by Republican campaign veterans, was hired at a time that Facebook was scrambling to adjust to unexpected GOP power in Washington after it had benefited from years of chummy relationships with Democrats. In addition to its research activities into Facebook critics, Definers also worked to coordinate press coverage of events and announcements.

A Definers spokesman said the firm was “proud to have partnered with Facebook over the past year on a range of public affairs services” and said that its memo on “the anti-Facebook organization’s potential funding sources was entirely factual and based on public records, including public statements by one of its organizers about receiving funding from Mr. Soros’ foundation.”

Soros’s family office, Soros Fund Management, sold out of its position in Facebook in the third quarter, according to a regulatory filing on Wednesday. The firm had held 159,200 shares in Facebook as of Sept. 30 valued at about $31 million.

The New York Times report has once again prompted the ire of lawmakers, who summoned Zuckerberg earlier this year for two days of Congressional hearings regarding the Russian affair and data privacy.

Facebook’s Leaders Didn’t Get It and Still Don’t: Shira Ovide

Senator Amy Klobuchar, a Minnesota Democrat who has sought to increase transparency of online political ads, said Thursday that she would write to Facebook and the Justice Department to ask whether any elected officials were targeted in the opposition research. She said it could be a campaign finance issue.

In 2017, Klobuchar proposed legislation to compel Facebook and others to disclose who bought political ads on their sites. The Times said that after a call from Sandberg at the time, Klobuchar dialed back criticism of Facebook, although her office stressed she didn’t change the bill in response to the outreach.

Other points Facebook refuted from the article:

Russia activity: The story said Facebook was aware of Russian activity on the platform as early as the spring of 2016 but was slow to investigate it. Facebook says it’s not true, citing Zuckerberg’s testimony to Congress in which he said: “Leading up to Election Day in November 2016, we detected and dealt with several threats with ties to Russia.” The Muslim ban: Facebook took issue with how the Times described discussions about Trump’s comments, on Facebook, calling for a “total and complete shutdown” on Muslims entering the U.S. Zuckerberg was reportedly appalled and wanted to take the comments down while Sandberg, in consulting with a well-connected Republican, Joel Kaplan, a former college classmate of Sandberg’s who had been hired as a company lobbyist, and others argued that shutting down the account could be seen as obstructing free speech. Facebook stood by that decision Thursday, saying that any suggestion that the “internal debate around this particular case was different from other important free speech issues on Facebook is wrong.” Commitment to fighting fake news: The article portrayed Zuckerberg and Sandberg as distracted by personal projects and said they passed off security and policy discussions to subordinates during critical moments over the past three years. Facebook said the two executives have been “deeply involved in the fight against fake news” and were “consistently involved in all our efforts to prevent misuse of our services.” Sex trafficking legislation: The Times reported that Facebook broke ranks with other tech companies in support of a bill called the Stop Enabling Sex Traffickers Act. Google and others were worried the bill would set a difficult precedent about regulating content on the site, but the Times linked Facebook’s support to the fact that the bill was sponsored by Republican John Thune who had pummeled Facebook over accusations that it censored conservative content. Facebook said Sandberg championed the bill because “she believed it was the right thing to do and that tech companies need to be more open to content regulation where it can prevent real world harm.” Android: The article recounted an incident after Apple Inc. CEO Tim Cook disparaged Facebook after the Cambridge Analytica scandal. The Times said Cook’s criticisms infuriated Zuckerberg, who later ordered his management team to use only Android phones. Facebook said Cook has “consistently criticized our business model and Mark has been equally clear he disagrees.” It said the company has “long encouraged our employees and executives to use Android because it is the most popular operating system in the world.”

–With assistance from Steven T. Dennis and Sarah Frier.To contact the reporters on this story: Ben Brody in Washington at btenerellabr@bloomberg.net ;Zoltan Simon in Budapest at zsimon@bloomberg.net To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net Molly Schuetz, Alistair Barr
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