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Facebook keeps getting bigger as it fights off checks on its power

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The social network added more users last quarter

Photo by Amelia Holowaty Krales / The Verge

Just minutes before Facebook released its third quarter earnings this afternoon, Twitter dropped a mic at its feet: CEO Jack Dorsey made the surprise announcement that his social network will ban political advertising starting in November to “focus our efforts on the root problems, without the additional burden and complexity taking money brings.”

Dorsey’s position was clear. These types of ads are risky when combined with the influence of social networks, and letting them run rampant without any oversight is dangerous.

Facebook, on the other hand, has steadfastly stood by its controversial policy to allow ads from politicians without fact-checking — in other words, to take money in exchange for boosting the reach of potential lies. (Facebook is far and away the largest internet platform for internet advertising, far outweighing Twitter.) The topic came up repeatedly at a hearing last week in which CEO Mark Zuckerberg appeared before Congress, ostensibly to answer questions about its struggling Libra blockchain and cryptocurrency project.

The controversy is already overshadowing Facebook’s rather stellar past three months. It yet again posted better-than-expected earnings, with ad revenue and net income surpassing Wall Street expectation with $6 billion in profit on $17.7 billion in sales. More importantly for Facebook’s long-term growth, the social network keeps getting bigger.

This past quarter, Facebook’s daily active user count grew 9 percent to 1.62 billion. Its monthly active user account grew 8 percent to 2.45 billion. Facebook says the number of people who use a product in its “family of services,” which includes WhatsApp and Instagram, every day is now 2.2 billion. Every month, that figure jumps to 2.8 billion. Facebook says the growth comes mostly from areas like India, Indonesia, and the Philippines.

But pressure from politicians and the public is mounting on Facebook, specifically with regard to its stance on lies in political ads and with its inclusion of Breitbart News as a trusted source in its recently announced news section. The company continues to see itself as a neutral arbiter for all viewpoints, even those viewpoints that may be misleading or outright false. And it continues to take money from politicians who wish to use its ad network to boost those messages, false or not, to millions of Facebook users.

The company’s position, that it does not get to decide who gets to speak on its platform, is rooted in the murky politics of free speech. “I don’t think it’s right for a private company to censor politicians,” Zuckerberg has said in defense of the policy. But that position, combined with the recent Breitbart controversy, has ignited another powder keg within the social network, and it’s now receiving considerable pushback both externally and internally.

Employees wrote an open letter to Zuckerberg, obtained by The New York Times earlier this week, condemning the policy in ways very similar to Dorsey’s stance on the issue. “Free speech and paid speech are not the same thing,” the letter reads. And Democratic politicians, activists, and liberal political action committee (PACs), are all now putting money toward stress-testing Facebook’s hands-off approach to see how far you can go in paying to promote falsehoods on the platform.

On a call with investors and the media after its earnings report, Zuckerberg recited a pre-written speech defending the company’s policies. In light of Twitter’s announcement, he also said Facebook would be sticking to its stance on paid speech and political ads.

“I don’t think it’s right for private companies to censor politicians or news,” he said. “Ads can be an important part of voice — especially for candidates and advocacy groups the media might not otherwise cover so they can get their message into debates. And it’s hard to define where to draw the line.” Zuckerberg also said the policy is not motivated by money; he estimates ads from politicians will represent less than 0.5 percent of next year’s revenue.

“Frankly, if our goal were trying to make either side happy, then we’re not doing a very good job because I’m pretty sure everyone is frustrated with us. Our values on voice and free expression are not partisan,” Zuckerberg added. He also said he suspects this will be a “very tough year” for Facebook going into the 2020 US election.

“This is complex stuff and anyone who says the answers are simple hasn’t thought long enough about all the nuances and downstream challenges,” he said. “I get that some people will disagree with our decisions. I get that some people will think our decisions may have a negative impact on things they really care about. But I don’t think anyone can say we’re not doing what we believe, or that we haven’t thought hard about these issues.”

Update October 30th, 5:22PM ET: Added statements from Facebook CEO Mark Zuckerberg form the company’s earnings call this afternoon.