WASHINGTON—Lawmakers grilled Facebook Inc. Chief Executive Mark Zuckerberg on Tuesday over the company’s handling of user privacy while also signaling they were prepared to embark on a new era of regulation for big tech companies.
During several hours of questioning, Mr. Zuckerberg sought to manage the discontent through a combination of contrition for missteps and calm explanations to complicated questions. And yet throughout, the 33-year-old billionaire was careful not to commit to any major changes in how the platform functions or how it sells advertising.
Mr. Zuckerberg acknowledged that Facebook feels responsibility for what is posted on its service.
“It’s not enough to just build tools. We need to make sure that they’re used for good,” he said. “And that means that we need to now take a more active view in policing the ecosystem.”
The financial markets reacted positively to the way Mr. Zuckerberg handled himself in the packed Senate chamber, with shares in the company ending the day up 4.5%.
Kicking off the first of two days of extended testimony, lawmakers criticized Mr. Zuckerberg for a lack of transparency, repeatedly expressing discontent with Facebook’s handling of a series of scandals in which the privacy of millions of users was violated.
Senators showed little consensus on what many in the technology industry fear the most—comprehensive legislation to force the protection of user data. But the legislators clearly opened the door to government action further than it had ever been opened before.
Tuesday’s unusual joint hearing likely marked the beginning of a long deliberation over regulating the tech industry, a topic that has, until now, failed to gain momentum on Capitol Hill.
“The status quo no longer works,” said Sen. Chuck Grassley (R., Iowa), the Judiciary Committee chairman. “Congress must determine if and how we need to strengthen privacy standards to ensure transparency and understanding for the billions of consumers who utilize these products.”
Mr. Zuckerberg conceded that government regulation might yield benefits, given the recent surfacing of such problems as fake news, foreign interference in elections and hate speech. “I think the real question as the internet becomes more important…is what is the right regulation?” he said.
Mr. Zuckerberg suggested openness to a few categories of potential government fixes, including transparency requirements concerning data use, mandates for user control over their data and protections for innovation.
And yet he hinted that the tech industry would resist any legislative move it thought went too far. “We still need to make it so companies can innovate,” or the U.S. will risk falling behind other countries, particularly China, he said.
The widely anticipated hearing was Mr. Zuckerberg’s first appearance before Congress. It involved a joint session of the Senate Commerce and Judiciary committees, with at least 42 senators attending, according to a congressional aide. Mr. Zuckerberg is scheduled to appear Wednesday before the House Energy and Commerce Committee.
The hearings mark a remarkable turn of events for Mr. Zuckerberg, who started in 2004 what was then called thefacebook.com in his dorm room to connect students at Harvard University. The social-media platform now is used by more than two billion people a month, as a critical source of news and information from friends and family.
Employees and executives say that transformation is largely due to Facebook’s corporate culture, which encourages rapid experimentation in keeping with its longtime motto, “move fast and break things.”
Until recently, that startup ethos was celebrated as an example of American ingenuity and gumption, including by Washington lawmakers, many of whom have rushed to buy campaign ads on the Facebook platform and eagerly took pictures with Facebook executives such as Mr. Zuckerberg and Chief Operating Officer Sheryl Sandberg.
Its friendly relationships with Washington lawmakers helped Facebook skirt past regulation, despite its growing size and a number of scandals related to user privacy and content policies over the years.
But over the past 18 months—arguably the most tumultuous in Facebook’s 14-year history—the downsides of the company’s approach have become increasingly apparent with users, regulators and advertisers questioning whether it should possess so much power over modern life without regulation.
“In the past, many of my colleagues on both sides of the aisle have been willing to defer to tech companies’ efforts to regulate themselves,” Commerce Committee Chairman John Thune (R., S.D.) said during Tuesday’s hearing. “But this may be changing.”
Senators touched on a number of concerns that have been growing in the public, including privacy, a lack of transparency, and Facebook’s dominance of social media.
“You don’t think you have a monopoly?” said Sen. Lindsey Graham (R., South Carolina) asked, to which Mr. Zuckerberg responded: “Certainly doesn’t feel that way to me.”
Ultimately, Mr. Zuckerberg didn’t promise basic changes to the design of its platform and advertising business, including Facebook’s reliance on users’ personal information to show relevant ads in their news feeds. Facebook instead is promising to enforce its policies more stringently.
He also suggested that some of the challenges being posed by contemporary technology could be resolved with more technology—notably artificial intelligence. But late in the hearing, he acknowledged that the technology’s risks aren’t yet well understood.
Of overwhelming concern was Facebook’s failure to protect privacy. Sen. Dick Durbin (D., Ill.) asked whether Mr. Zuckerberg would be comfortable sharing the name of his hotel in Washington, or the names of people with whom he has messaged through social media.
“Uh, no,” Mr. Zuckerberg deadpanned, drawing a few chuckles from the audience.
Mr. Durbin sought to frame the issue as a trade-off, asking how much privacy users needed to give up to be connected, to which Mr. Zuckerberg responded that “everyone should have control over how their information is used.”
Mr. Zuckerberg appeared well prepared for the questioning, but many senators were skeptical. Sen. Richard Blumenthal (D., Conn.) expressed anger over whether Facebook should have spotted that Cambridge Analytica improperly obtained data, suggesting the failure could violate an agreement Facebook has with the Federal Trade Commission.
“What happened here was in effect willful blindness—it was heedless and reckless,” Mr. Blumenthal said of Facebook’s missteps with regard to the data.
“No, senator,” Mr. Zuckerberg said.
“We’ve seen these apology tours before,” Mr. Blumenthal said. “You have refused to acknowledge even an ethical obligation to have reported this violation of the FTC consent decree.”
The senator said he has letters from Facebook employees that indicated not only a lack of resources but also a “lack of attention to privacy, and so my reservation about your testimony today is that I don’t see how you can change your business model unless there are special rules of the road.”
In 2012, Facebook agreed to obtain user consent for collecting personal data and sharing it with others. The FTC is now probing whether Facebook violated the terms of this agreement when data of tens of millions of its users were transferred to Cambridge Analytica, which worked with the Trump campaign.
Mr. Zuckerberg also said the company has been “working with” special counsel Robert Mueller’s investigation into Russian meddling in the 2016 election.
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