[CTC] Pro-Corporate Trade Pacts Let Mark Zuckerberg Hide His Face - CEPR Blog

[Dan Beeton]

http://cepr.net/blogs/cepr-blog/pro-corporate-trade-pacts-let-mark-zuckerber
g-hide-his-face

Pro-Corporate Trade Pacts Let Mark Zuckerberg Hide His Face

Written by Jeff Hauser 

Published: 09 April 2018 

This might not be the best time to be alive if you worry about things like
racism or climate change, but 2018 is undeniably a great time to run a
multinational corporation. Ironically, Facebook’s Mark Zuckerberg helps
illustrate why life is great for CEO’s of multinationals, even as the
corporate behemoth he founded is experiencing a public relations crisis and
a falling stock price.

Why? Because in 2018, basically the only international rules that apply to
corporations are those that benefit them.

For years, pragmatic
<https://www.citizen.org/our-work/globalization-and-trade/investor-state-sys
tem> observers
<http://cepr.net/publications/op-eds-columns/rich-people-s-rules-and-the-tpp
>  of international trade have worked
<https://www.equaltimes.org/undemocratic-and-a-bad-for-working-people-its-ti
me-to-reform-the-isds?lang=en#.WsKddy7waig>  to illuminate the intentionally
boringly titled process known as “Investor-State Dispute Settlement,” or
ISDS, that is imbedded in modern trade deals. ISDS creates extrajudicial
panels whereby multinational corporations can seek to invalidate a country’s
laws by a shadowy and opaque process.

In other words, under contemporary trade deals, corporations like Facebook
have the right to challenge laws or regulations that Facebook doesn’t like
in countries where Facebook is not headquartered.

But contemporary trade agreements don’t just give corporations extra
opportunities to undermine the regulatory efforts of democratic governments.
Less frequently discussed is how ISDS gives corporate executives the ability
to exert influence in countries without subjecting themselves to those
countries’ legislative or criminal processes.

Consider Mark Zuckerberg and Facebook: While Zuckerberg and Facebook have
been negotiating for the most favorable terms for Zuckerberg’s long overdue
testimony to Congress about their platform’s role in the 2016 election and
indifference to consumer privacy, ultimately every savvy observer knew that
Zuckerberg was inevitably going to have to testify.

And now Zuckerberg is set
<https://www.cbsnews.com/news/facebook-mark-zuckerberg-testify-senate-judici
ary-commerce-committees-april-10/>  to testify on April 10th and 11th
<https://www.politico.com/story/2018/04/04/zuckerberg-testify-congress-sched
ule-500201>  at a joint hearing of the Senate Judiciary and Commerce
Committees and then the House Energy and Commerce Committee.

Why was Zuckerberg’s testimony inevitable? Because even as Zuckerberg tried
to portray his willingness to offer Congressional testimony as an act of
regal magnanimity, he didn’t really have a choice in the matter. As summed
up by corporate law firm Mayer Brown
<https://www.mayerbrown.com/files/Publication/ec1203b2-a787-44ac-8344-5d5fab
374ffa/Presentation/PublicationAttachment/11509b8b-df81-4db6-9e89-1d1b16c208
56/White-Paper-Congressional-Subpoena.pdf> , “put simply, Congress can
compel the production of documents and sworn testimony from almost anyone at
almost any time.” (emphasis added)

However — and this is critical — currently NO other country can compel
Zuckerberg’s testimony.

That means that as the United Kingdom continues to assess the impact of the
Cambridge Analytica scandal and whether Brexit was hacked, the UK parliament
cannot force the unwilling
<https://www.cnet.com/news/mark-zuckerberg-rejects-invitation-to-give-eviden
ce-for-facebook-in-uk-parliament/>  Zuckerberg to give evidence. The chair
of the UK’s Digital, Media, Culture and Sport Committee, Damian Collins, has
continued
<https://www.cnet.com/news/mark-zuckerberg-rejects-invitation-to-give-eviden
ce-for-facebook-in-uk-parliament/>  to make requests for Zuckerberg to
appear, but to no avail. That is despite the recent
<https://www.campaignlive.co.uk/article/facebook-uk-quadruples-annual-revenu
e-842m-reducing-offshore-ad-sales/1446401>  "huge jump” in UK specific
revenues from £210.8 million in 2015 to £842.4 million (more than $1 Billion
in revenue in US dollars) in 2016.

In other words, while Facebook matters a lot to how people live in the
United Kingdom, the needs of the United Kingdom’s government matters little
to Mark Zuckerberg. That power balance in favor of Zuckerberg imperils the
basic democratic principle that power rests with the people and their
representatives, rather than the computer programmer lucky enough to be
first to achieve serious network effects in social media.

Similarly, America’s Congress lacks subpoena power over Alexander Nix, who
ran Cambridge Analytica, or the people who run its British
<https://www.newyorker.com/news/letter-from-the-uk/life-inside-scl-cambridge
-analyticas-parent-company> parent company, SCL Group. The same is true for
key executives of Alibaba, Samsung, or any number of other critical
technology companies.

Indeed, this imbalance can go beyond testifying in front of a legislature.
Remember the massive Volkswagen scandal? Volkswagen’s deliberate effort to
cheat clean air tests in the United States and across the world was “one of
the most audacious corporate frauds in history,” according to ProPublica
<https://www.propublica.org/article/how-vw-paid-25-billion-for-dieselgate-an
d-got-off-easy> , and the key perpetrators, “are beyond the reach of U.S.
prosecutors because Germany does not ordinarily extradite its nationals
beyond European Union frontiers.”

It defies common sense that the officers of any company that does serious
amounts of business in a country can prevent its senior officers from being
subject to subpoena by that country's legislature or from being extradited
to be held accountable for criminal acts.

Trade deals should mandate cooperation with a fact-gathering legislature or
criminal hearings as part of each and every trade negotiation, rather than
allowing “globalization” to further reduce the accountability of the rich
and powerful.

>From my perch in America, the ongoing prerogatives of the British monarchy
strike me as odd, but are they any worse than democratically elected
legislatures begging unsuccessfully for a few moments of honest dialogue
with the likes of Mark Zuckerberg?

 

__

 

Dan Beeton 

International Communications Director 

Center for Economic and Policy Research 

1611 Connecticut Avenue, NW, Suite 400 

Washington, DC 20009 

Phone: 202-239-1460 

Cell: 202-256-6116 

Skype: dan.beeton 

E-mail: beeton at cepr.net / www.cepr.net <http://www.cepr.net/> 

Twitter: @Dan_Beeton <https://twitter.com/Dan_Beeton> 

 

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