How Facebook’s ‘metaverse’ became a political strategy in Washington

4 weeks ago 18

This summer, executives at Facebook confronted a daunting task. Years of controversy over its role in spreading misinformation, abusing privacy, crushing competition and undermining democracy had left the Facebook brand in shambles. The company needed a new identity.

Thus began Facebook’s push for the “metaverse,” a virtual world made possible by what it hoped would be exciting new hardware. In the metaverse, according to Facebook CEO Mark Zuckerberg, people could play games, exchange cryptocurrency payments, attend meetings — and, perhaps most importantly, see Facebook as cool again.

In recent weeks, Facebook has unveiled ambitious plans to pitch its virtual reality headsets as tools for remote work for professionals and launched a collection of smart glasses in collaboration with Ray-Ban, an icon of American hipness. Part of the campaign to rebrand itself as a purveyor of gee-whiz technology: Nascent plans to build a medical device, according to two people familiar with the company’s plans who spoke on the condition of anonymity to discuss private matters.

Facebook’s buzzy hardware push is not just a PR stunt: It’s an elaborate effort by Zuckerberg to transform the company into a passion project that exists far from the controversies of social media. It is political strategy too, part of a broader push to rehabilitate its reputation with policymakers and reposition Facebook to shape the regulation of next-wave Internet technologies, according to more than a dozen current and former Facebook employees, think tank experts, legislative aides and Biden administration officials who spoke on the condition of anonymity to discuss private conversations.

In Facebook’s Washington office, the metaverse is already a full-on political push: The company is meeting with think tanks to discuss the creation of standards and protocols for the coming virtual world, enabling Facebook, some say, to turn the conversation away from such urgent but distasteful matters as the massive antitrust lawsuit filed last year by the Federal Trade Commission. Next week, Facebook Vice President for Global Affairs and Communications Nick Clegg plans to deliver a talk at the Atlantic Festival, a Washington-based ideas fest funded in part by the social media giant, titled “Journey to the Metaverse.”

Meanwhile, Clegg and Chief Operating Officer Sheryl Sandberg have become the company’s chief promoters in Washington, standing in for Zuckerberg, who has told aides he no longer wants to be involved in such matters. And back in Silicon Valley, Zuckerberg this week replaced his chief technology officer with Andrew Bosworth, a close friend and the company’s longtime head of hardware — a move that underscores the hoped-for transition from troubled social media company to futuristic tech provider.

The campaign seems designed to disarm regulators and get out ahead of potential problems with up-and-coming technologies, said Joan Donovan, research director of the Shorenstein Center on Media, Politics and Public Policy at Harvard University.

“As long as you can make technology seem fresh and new and cool, you can avoid regulation,” Donovan said. “And you can run defense on that for several years before the government can catch up."

Facebook spokesman Kevin McAlister said that the company bet big on virtual reality years ago.

We “are focused on helping build the metaverse because it’s the successor to the mobile internet,” he added in a statement. “It’s not reputational, it’s foundational. We’re talking with policymakers, academics, partners, and other experts now because we want to do it responsibly.”

The company is trying to win over Washington in other ways, too. At a high-level August meeting requested by Department of Homeland Security Secretary Alejandro Mayorkas, Sandberg steered the conversation to a pet topic: leaning in.

After discussing how Facebook could help combat domestic extremism, election misinformation and provide support for nonprofit organizations working to help reunify immigrant families at the U.S.-Mexico border, Sandberg asked DHS officials about whether the agency was interested in starting women’s empowerment circles organized by Sandberg’s personal Lean In foundation, according to three people familiar with the discussions who spoke on the condition of anonymity to describe private conversations.

Despite its desire to move on, Facebook keeps getting pulled back to earth. The company faces antitrust bills in Congress, the FTC’s antitrust case that was refiled by the agency in August, and impending laws in Europe and India that could undermine the business models and products of social media companies. This month, the Wall Street Journal reported that company executives understood and had research proving exactly how toxic the site is, including regarding coronavirus misinformation and the effects of Instagram on teenage girls.

The metaverse strategy — conceived before the recent surge in bad news — has astonished some observers. One of the people compared the strategy to confronting a raging California wildfire by encouraging people to visit Hawaii instead.

“A lot of companies at this point would be sending sort of conciliatory signals both to Washington and to the public at large,” said Paul Barrett, deputy director of the NYU Stern Center for Business and Human Rights. “But Mark Zuckerberg is now saying we’re setting out to conquer new swaths of the digital world and remake the digital world. … It doesn’t seem to respond to the mood of the moment.”

In less than a decade, Facebook has gone from a company that was lauded as an icon of American innovation to the symbol of how technology platforms have produced a litany of social harms. These revelations have resulted in a wave of legislation and lawsuits against the tech industry around the world.

The perception of Facebook began to shift after the 2016 presidential election, when Russian operatives sowed disinformation on the company’s platform, and it fell even further after the Cambridge Analytica privacy scandal.

During the Donald Trump years, Facebook became a punching bag for the right, despite Zuckerberg’s personal efforts to court Trump and his son-in-law Jared Kushner.

The company also alienated its traditional Democratic allies. Revelations of far-right extremism on the platform and the spread of election lies, misinformation and privacy violations turned many Democrats against the company.

And Facebook lobbyists and employees are still banned from meetings with House Speaker Nancy Pelosi’s staff, according to some of the people who spoke with The Post, following a video posted on the social media site making it appear that Pelosi (D-Calif.) was drunk in 2019. She personally refused to take a phone call from Zuckerberg, The Washington Post reported at the time.

Facebook hoped for a better reception with the Biden administration but has been mired in fights with the White House over the spread of coronavirus misinformation.

The company is now aggressively advancing numerous priorities in Washington, from sharing the metaverse and hardware gospel to pushing its cryptocurrency plans. It’s also asking the administration for favors in protecting its interests around the world.

With Zuckerberg stepping back, Clegg has been most involved, according to the people, though Sandberg has spoken with several senior officials and several foreign heads of state this year.

Clegg is expected to lead conversations around the creation of the outside election commission, which was first reported by the New York Times. The company originally planned to announce the commission, along with an accompanying white paper, as recently as last month, but held back because of internal debate.

Some of the people worry that Facebook’s massive lobbying arm — one of the two biggest lobbying spenders in Washington — will effectively use the metaverse strategy to secure buy-in for its ideas about how tech companies can regulate themselves.

The approach draws in part from a well-worn Facebook playbook. The company has tried to reinvent itself before in subtler ways, for example, shifting its focus to encryption and privacy in 2019. It has also previously launched hardware products, including repeated failed efforts to build a smartphone in 2010 and 2012. More recently, its Portal video-calling device hasn’t gained much traction.

The concept of the metaverse also tracks with some of the company’s previous efforts at self-regulation. In 2019, it created an independent oversight board to rule on content decisions such as the suspension of Trump. Its new election commission would also fall into that bucket.

It has also proposed its own reforms to an outdated Internet law known as Section 230, a 1996 law that provides immunity to technology companies from harmful content that appears on their platforms. Facebook has even suggested a new government regulator that focuses on Big Tech, an idea first floated by Clegg in a CNBC op-ed in May.

Across the Atlantic and in India, Facebook is confronting even greater threats to its business. A European court’s 2020 decision invalidating an agreement that protected U.S. tech companies’ ability to transfer Europeans’ personal data to the United States could lead the company to shut down there, the company has warned.

Proposed legislation in the United Kingdom could force social media companies to pay massive fines — up to 10 percent of global revenue — for harmful content on their platforms, including misinformation. And in India, the company is on a collision course with the government, which is also moving quickly to enact laws that could break encryption, which scrambles content of conversations so that no outsiders can read it. Facebook has placed big bets on encryption, which is already part of WhatsApp and being built into other services.

Those mounting pressures have influenced the company’s attempt to rebrand itself, the people said.

On an earnings call in July, Zuckerberg surprised investors by talking about the future of Facebook in starkly different terms than he had in the past.

“I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company,” he said, using a term coined in sci-fi novels and embraced more recently by Silicon Valley venture capitalists.

The metaverse, he posited, would somehow be larger than Facebook and not controlled by any one company — a description that is akin to how Internet pioneers described the Web itself but has little bearing on the ultracompetitive tech industry.

Company executives hope that a newer focus on the metaverse, and the suite of hardware products that accompanies it, could give policymakers a chance to dissociate the company from the woes of social media and see Facebook in a less negative light. But they also worry that the metaverse concept and the hardware could get a hostile reception, some of the people said.

Any product or idea that is too associated with Facebook could immediately become toxic to policymakers, they added. That is what has happened during Facebook’s 2019 launch of a cryptocurrency project called Libra.

Today, Libra has been rebranded as Diem and the company is pushing it again. Clegg is courting the Treasury Department and has had general conversations with Deputy U.S. Treasury Secretary Wally Adeyemo in recent months, according to some of the people.

Members of Facebook’s policy team think they may be able to overcome such hostility by introducing the idea of the metaverse early to think tanks and other companies that could become partners in developing rules of the road for the “next” Internet.

The company’s Washington team has been expressly tasked with steering the conversation away from antitrust — both the FTC lawsuit and other recently proposed antitrust-related bills in Washington, according to some of the people.

Earlier this year, the company put out a blog saying it was researching artificial intelligence with “wrist-based input" — an effort that one of the people described as a smartwatch with a heart rate monitor, as was previously reported by The Verge. But going further into medical device territory, as the company is exploring, could require FDA approval — yet another potentially skeptical Washington agency that the company would need to gain a foothold in.

In June, before the company had formally introduced the metaverse, Facebook tested the waters by hosting a “Data Dialogue” event with Washington think tanks, where Facebook executives discussed the company’s forays into more advanced technologies, including virtual reality and Oculus, and efforts to mitigate potential harms and ensure its artificial intelligence was inclusive, said Chris Riley, R Street Institute’s tech policy senior fellow, who attended the meeting.

“They’re trying to make themselves not seem like the bad guy,” Riley said.

Cristiano Lima contributed to this report.

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