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Mark Zuckerberg Is Ready to Fight the Government

By Evan Niu, CFA - Oct 1, 2019 at 1:43PM

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If the government tries to break Facebook up, Zuckerberg thinks the legal odds are in his favor.

In recent years, there's been a lot of talk in Washington about breaking up giant tech companies that have gotten too powerful. Regulatory agencies have opened up various inquiries into the business practices of many juggernauts, including for potential antitrust violations, as some companies may be using their market power to undermine competition. Facebook (META -3.78%), which has been the subject of innumerable scandals over the past three years, is among the entities that politicians want to break up.

Mark Zuckerberg is ready for a fight -- and is pretty sure the sprawling social networking conglomerate can emerge victorious.

Digital gavel made out of 1s and 0s

Image source: Getty Images.

If Zuck were a gambling man

In a bombshell report, The Verge has obtained two hours of leaked audio from internal Q&A meetings. Compared to public statements, His Zuckness is expectedly more forthright with employees about challenges the company faces. A lot of sensitive topics are covered in the discussion, but two are particularly relevant for investors.

Senator Elizabeth Warren, one of the leading contenders for the Democratic presidential nomination, has been among the most vocal lawmakers to call for Facebook to be broken up. One worker mentions the recent $5 billion fine imposed by the FTC, then asks if Zuck is worried about regulators and politicians like Warren trying to dismantle Facebook.

Zuckerberg believes that the law would be on Facebook's side:

So there might be a political movement where people are angry at the tech companies or are worried about concentration or worried about different issues and worried that they're not being handled well. That doesn't mean that, even if there's anger and that you have someone like Elizabeth Warren who thinks that the right answer is to break up the companies...I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge.

That situation would "suck for us," Zuckerberg concedes, as he doesn't want to have to "have a major lawsuit against our own government." The chief executive then argues that breaking up large tech companies would actually exacerbate issues like election interference and online abuse/harassment, since larger companies have more resources to invest in platform security.

Zuck takes a jab at Twitter to illustrate his point:

It's why Twitter can't do as good of a job as we can. I mean, they face, qualitatively, the same types of issues. But they can't put in the investment. Our investment on safety is bigger than the whole revenue of their company. [laughter] And yeah, we're operating on a bigger scale, but it's not like they face qualitatively different questions. They have all the same types of issues that we do.

Facebook hopes that it can govern itself sufficiently in order to prevent the government from stepping in. If the company fails to do so, Zuckerberg acknowledges that people will "keep on getting angrier and angrier" and "demand more extreme measures." The CEO concludes, "And that's when the rule of law comes in, and I'm very grateful that we have it."

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook and Twitter. The Motley Fool has a disclosure policy.

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