CNN's 'Fareed Zakaria GPS' - Chris Hughes On Facebook (Transcript)

CNN’s FAREED ZAKARIA GPS featured an interview with tech entrepreneur and investor Christopher Hughes, who co-founded Facebook, and previously was an investor and editor-in-chief for The New Republic.  Zakaria and Hughes discussed Hughes’ views on the future of large tech companies and their compatibility with democratic societies.

Here is a transcript of the entire segment, courtesy of CNN:

FAREED ZAKARIA, HOST:  My next guest says that Facebook is too big, Mark Zuckerberg is too powerful, the company needs to be split up.  You might expect such sentiments from say Elizabeth Warren who has been railing against the power of tech companies.  You probably would not expect such ideas from the co-founder of Facebook, Chris Hughes but that is what Hughes put forth in a New York Times opinion piece entitled, “It’s Time to Break Up Facebook.” And Chris Hughes, who was Zuckerberg's roommate at Harvard, joins me now. 

CHRIS HUGHES, CO-FOUNDER OF FACEBOOK:  Thanks for having me.

ZAKARIA:  Chris, that was an explosive piece. Let me – let’s get right to the chase.

The biggest argument against your position is that Facebook provides services for free to people and when people choose to use Facebook, WhatsApp, Instagram, they are voluntarily ceding that privacy, they know that Facebook is using it and they're accepting the idea that they get an incredible free service that they like -- Facebook, Instagram, WhatsApp -- in return for allowing Facebook to use their data. What's wrong with that? That's the free market.

HUGHES: Well I don't think that’s quite right for two reasons.  First off, I think that users do pay quite a bit to use Facebook. They don’t pay with dollars but they pay with their data and with their attention -- you know, the average users on the site, on Facebook, for an hour a day, on Instagram for 53 minutes and we are providing immense amounts of data, not just on those apps, but as we move around the web, that gets consolidated into our Facebook profiles.

So, there is a lot of data and attention going into it, and I think it's also not true because the space is so locked down -- Facebook has become such a strong monopoly that there's no alternative.  It's not like there's a choice that people could go elsewhere and pay to use another social network that doesn't collect as much data on them or doesn't provide them targeted advertising. Facebook is all of social networking because it owns Facebook.com, Instagram, and WhatsApp. So without any kind of competition there's no accountability.

ZAKARIA:  But again what the defenders will say is yeah, but you wouldn't have had WhatsApp, which is free messaging for large parts of the world, without – you know, Facebook can afford to take -- extend the reach of these programs because it has this dominant position – again, that this is the market at work, people are choosing it.

HUGHES:  Well, if there were other things to choose from then that would be true, but I don't think there are in the social networking space.  I think WhatsApp is a good example of a company that serves I think billions of people now and still has a somewhat small staff, and you know, the founder of WhatsApp too has left the company and Brian has called to delete Facebook as well. The founders of Instagram have also left the company and have not spoken out yet, but I think that there is a sense across the board that Facebook has acquired these companies, is pulling them into the mothership and is stifling competition everywhere it can.

ZAKARIA:   So, in a way your approach to anti-trust, the government – theory of government that breaks up monopolies is a little different from the way we've been operating for the last 30 or 40 years.

The - ever since Robert Bork famously wrote a book in the 1970s, people have said as long as the consumer benefits from a lower-priced product, any degree of consolidated power is OK. And you're saying no.

HUGHES:  Well the long history of anti-trust is that it's a way of holding businesses that have gotten too big and too powerful accountable. So it’s built on the same principle of checks and balances that our founders outlined in the Constitution for the different branches of government but for the private sector as well.  So starting in the 1890s and really all the way up until the 1970s, anti-trust was practiced in this country as a check on the large powerful companies that had effectively frozen markets that were preventing competition from doing its thing.  Now that took a different direction in the 1980s because of the Bork revolution to a more narrow standard, the consumer welfare standard, where we focus often really intensely on price gouging.  And I think that clouds the judgment because what want, if we take a step back, is capitalism to work. We want markets to be dynamic, competitive and fair, and sometimes government has to step in when a single company gets too big and too powerful. And I should say this is not just a Facebook problem, you know, three quarters of American industries have become more concentrated over the past 20 years.  It's rental cars, it's beer, it's pharmaceuticals, it's airlines -- we can go through the list.  Facebook is one that just about everybody is familiar with because they use it, but it's not only Facebook.

ZAKARIA: The -- your biggest concern you say in the piece is the degree to which Mark Zuckerberg has almost total control over what information we all read about, access.

HUGHES:  Yeah, he - you know the way that Facebook is structured as a company -- Mark's the CEO, there is a board but because he owns 60 percent of the voting shares he's not accountable really to that board -- it works more like a board of advisers than anything else. He's not really accountable to users, and thus, far he's not been accountable to government.  So, one thing that I don't spend time on in the piece but I think is really important is that we can approach corporate governance differently -- there's a lot of folks who call for thinking about making sure that boards have a responsibility not just to the bottom line but to customers, to suppliers, to the environment -- a kind of global responsibility, which again was what it was like in the ’50s and ’60s before the revolution over the past few years.  So, I think that kind of thinking when applied to Facebook would immediately bring accountability to the company. Or if the FTC broke up the company or if there were meaningful privacy regulation, that too would bring accountability.  But the world that we're in right now is one where I do think Mark Zuckerberg has too much power -- near-unilateral power.

ZAKARIA:  Now this is not just a professional argument for you, this is personal. In fact, you begin the piece by pointing out that you last saw Zuckerberg, your college roommate, in 2017 and what you describe is a meeting among old friends, kind of a reunion.  Has he contacted you since the piece was out?

HUGHES:  No, I haven't spoken to him.

ZAKARIA:  Do you suspect –

HUGHES:  I doubt that I will.

ZAKARIA:   Do you think this is the end of your friendship?

HUGHES:  You know in thinking about writing the piece, I had to come to terms with the likelihood that it is. I hold no ill will towards him personally as an individual, as I say in the piece. I think he's trying his hardest. He's human, you're human, I mean, we're all human. We all have our - we all make mistakes, but I think that in his case it is different because there is no accountability for those mistakes.  So, in writing the piece I came to a place where I said, you know, I will probably lose a friend or maybe more over it.

But in this case it’s worth it. I think this argument is too important, Facebook is too big and it's something that 2.4 billion people use.  So, now that said, there are some friendships where you can disagree about things -- important things -- and maybe we have one of those, I don't know, only time will tell.

ZAKARIA:  Chris Hughes, pleasure to have you on.

HUGHES:  Thanks for having me.