‘Facebook is already too big and too powerful’: Senate to dig into Libra, the tech giant’s new crypto project

  • The US Senate Banking Committee plans to hold a hearing on Facebook’s newly announced Libra cryptocurrency project on July 16, Reuters reported.
  • On Tuesday, Democratic Sen. Sherrod Brown of Ohio, the ranking member of the committee, responded to the announcement of Libra with concern: “Facebook is already too big and too powerful.”
  • Facebook has ceded control of the coin to the Libra Association, a consortium of companies that will manage the cryptocurrency. However, Libra’s start at Facebook seems poised to put it under significant scrutiny.

The US Senate Banking Committee plans to hold a hearing to discuss Libra, Facebook’s newly announced cryptocurrency project, on July 16.

News of the hearing was initially reported by Reuters.

The hearing will also examine any issues of data privacy stemming from the project, according to the report. Witnesses at the hearing haven’t yet been announced, Reuters reported.

News of the hearing comes a day after Democratic Sen. Sherrod Brown of Ohio, the ranking member of the committee, expressed his concerns over Libra and what it could mean for the power Facebook holds over its users.

“Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. I’m calling on our financial watchdogs to scrutinize this closely to ensure users are protected,” Brown said in a statement on Tuesday in the wake of the announcement of Libra.

It’s not the first time that the committee has expressed concern over Facebook’s push into cryptocurrency. In May, after reports from The Wall Street Journal that Facebook was working on cryptocurrency-based payments technology, Brown and Republican Sen. Mike Crapo of Idaho, the chairman of the committee, cosigned a letter to Facebook CEO Mark Zuckerberg seeking more information on the social network’s intentions in the space.

“What privacy and consumer protections would users have under the new payment system?” the senators asked Zuckerberg in the letter, on behalf of the committee.

Other prominent lawmakers have expressed their own concerns: Democratic Rep. Maxine Waters of California, the chairwoman of the House Financial Services Committee, called on Facebook to pause the rollout of Libra until regulators had a chance to assess the plan.

“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters told reporters on Tuesday.

Facebook, for its part, has taken steps that might help insulate it from such criticisms, which is important as it continues to recover from its long string of scandals and clashes with politicians and lawmakers.

It has ceded control of Libra to the Libra Association, a group of companies including Andreessen Horowitz, Uber, and Spotify that will jointly oversee the new cryptocurrency. However, Facebook spearheaded the creation of this coin and remains a part of the Libra Association.

A spokesperson for Facebook directed questions to the committee. A spokesperson for the Senate Committee was not immediately available for comment.

On Tuesday, in response to Brown’s and Waters’ concerns, a Facebook spokesperson said, “We look forward to responding to lawmakers’ questions as this process moves forward.”

Source: BusinessInsider