The tech execs who have called out Facebook's trust problem

Deputy Managing Editor
Yahoo Finance

Salesforce (CRM) CEO Marc Benioff used bold language in an interview with “CBS This Morning” when he called Facebook (FB) the “new cigarettes of our industry.”

“It’s a technology that’s addictive, it may not be that great for you, and it might be something that you want to go back to,” said Benioff, whose company focuses on cloud computing. “So maybe this is a time where the government has to step in and regulate.”

The Salesforce CEO’s strong words come amid a time of turmoil for Facebook. Last month, Facebook CEO Mark Zuckerberg was grilled in Congress after the social network revealed that a consulting firm tied to President Donald Trump’s campaign had improperly accessed the data of up to 87 million users.

Salesforce CEO Marc Benioff REUTERS/Mike Blake
Salesforce CEO Marc Benioff REUTERS/Mike Blake

Subsequently, House Democrats released a trove of Russia-backed Facebook ads aimed at sowing discord during the 2016 presidential election.

‘We could make a ton of money if we monetized our customer’

The scandals have cast a negative light over big tech as a whole, and Benioff is not the first CEO in the industry to call out Facebook. Just this weekend, Apple (AAPL) CEO Tim Cook moved beyond the usual platitudes in his graduation speech at Duke University when he broached the subject of data privacy.

“We reject the notion that getting the most out of technology means trading away your right to privacy, so we choose a different path — collecting as little of your data as possible, and being thoughtful and respectful when it’s in our care,” said Cook, whose speech was live streamed on Yahoo Finance. “Because we know it belongs to you.”

Cook got another Facebook dig in during an interview with Recode’s Kara Swisher last month, when he pointed out that Facebook earns money from users’ data.

“The truth is we could make a ton of money if we monetized our customer. If our customer was our product, we could make a ton of money. We’ve elected not to do that,” Cook said, generating applause from the audience, according to a transcript.

Reed Hastings, co-founder and CEO of Netflix. REUTERS/Steve Marcus
Reed Hastings, co-founder and CEO of Netflix. REUTERS/Steve Marcus

Another big-tech CEO, Netflix’s (NFLX) Reed Hastings, has also taken pride in the fact that his company has a revenue source that’s divorced from users’ data.

“I’m very glad we built a business not to be ad-supported but to be based on subscription,” Hastings said on the company’s “earnings interview” last month, which Yahoo Finance’s JP Mangalindan noted was an apparent reference to Facebook’s core business.

“We’re very different from the ad-supported business, and we’ve always been very big on protecting all of our members’ viewing. We don’t sell advertising. So, I think we’re substantially inoculated from the other issues that are happening in the industry — and that’s great.”

Lesser-known tech CEOs also weigh in on Facebook

Another tech CEO, Tinder’s Elie Seidman, also sought to differentiate his company from the social network during an interview earlier this month with Yahoo Finance’s JP Mangalindan. That interview came the same week that Facebook revealed that it’s launching an online dating platform, prompting Seidman to point out that Tinder, unlike Facebook, does not rely on advertising dollars. It is that reliance that might encroach on users’ privacy, as companies can use people’s data to target their ads.

“We don’t have a lot of the data complexity, and we don’t sell data,” Seidman said. Then, he added, “Our members are paying us, and I think that’s a really important idea, which is that we make money if our members have a better experience.”

Other tech CEOs have supported new regulation to rein in Facebook, including Ashish Toshniwal, who runs the app developer Y Media Labs. “If Washington decides to regulate Facebook, I think that would be a good thing,” Toshniwal told “CBS This Morning.”  “And I feel it will be good for Facebook as well. Like, lot of people who do not have the trust in Facebook, will probably have more trust if Facebook is regulated.”

‘Ripping apart the social fabric of how society works’

Figures in the tech industry with past ties to Facebook have also voiced concerns over data privacy and the purportedly addictive nature of the social network.

Last year, former Facebook executive Chamath Palihapitiya told a group of Stanford Graduate School of Business students that he felt guilty about helping to create Facebook. “I think we have created tools that are ripping apart the social fabric of how society works,” he told the students.

Chamath Palihapitiya, Founder and CEO of Social Capital. REUTERS/Brendan McDermid
Chamath Palihapitiya, Founder and CEO of Social Capital. REUTERS/Brendan McDermid

And last month, former Facebook employee Sandy Parakilas told NPR that he was concerned about the social network’s desire to access users’ data.

“They have a business model that is going to push them continuously down a road of deceiving people,” he says. “It’s a surveillance advertising business model.”

Of course, Facebook is not the only tech giant to rely on personal data for its revenue. As the Wall Street Journal’s Christopher Mims noted, there’s a giant company that has even more of your data than Facebook — Google (GOOG, GOOGL). But for now at least, it seems Facebook is the poster child for big tech’s “big brother”-like tendencies.

Erin Fuchs is deputy managing editor at Yahoo Finance.

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