Facebook’s Sheryl Sandberg: We Should Have Checked Cambridge Analytica Data | CNBC

Facebook's Chief Operating Officer Sheryl Sandberg going on the defensive. Here's what she told Today anchor Savannah Guthrie. What is the reason it took so long? You could have done all of this two and a half years ago. You are right that we could have done this two and a half years ago. So why didn't you? Because as I explained, we thought that the data had been deleted and we should have checked. You are right about that. What we're doing now, we thought it had been deleted because they gave us assurances and it wasn't until other people told us it wasn't true. But why go on? But here's what we're doing. Someone has already violated, in spirit, if not in the letter, Facebook's principles. Why would you then trust, oh, they'll delete it? That's like someone robbed your house and you're like, well, don't do that. No, we didn't trust. We had legal assurances from them that they deleted. What we didn't do was the next step of an audit and we're trying to do that now. Sandberg was also asked if Facebook users would be able to opt out of target-based advertising. She said a function like that would have to be a, quote, paid product. Joining us right now to talk tech is Nailal Patel. He's the editor-in-chief of The Verge. Good morning to you. The question we were talking, let's just do paid product first because we're having a big debate about this. Do you think that there is a paid product that they're going to end up offering because of this whole situation? No. At this point, it seems like Facebook is definitely saying things that people want to hear without a plan behind them. So Mark Zuckerberg talked to Ezra Klein, Fox.com, my colleague. He said advertising-based businesses are important because they make Facebook accessible to that two billion user audience and you don't have to be rich to use Facebook. If you start adding on a paid product, you're going to have to deliver more value than just not showing ads. So what do you think is going to happen? What do you think is going to change here? I think Facebook is in a purely reactive zone. The way Zuckerberg is talking about the ideas he has for how Facebook should work, they're grand ideas. There's never been a product like Facebook in the history of the world. He's literally talking about it as though it is a government. He says things like, Millennials believe they are citizens of the world and we need to take those values and build Facebook for those values. That is great. That's great stuff to say. Nealey, what happens when he actually goes before Congress next week? How does he meld what he's saying now with what he's going to say before regulators? I think he's on this press tour right now as a warm-up for Congress. So he gave interviews to The Times and to Karis Fischer at Recode and to Wired. He did a panel for an hour and a half with reporters the other day, took a whole bunch of questions. He told that group of reporters that he was, quote, a power user of the internet and suggested everybody turn on two-factor authentication, which I thought was great. I think that's a warm-up for what Congress is going to focus on. I think the questions Congress will present him and the questions users are interested in are divergent. Congress is going to be interested in the Cambridge Analytica scandal. What are you doing about data? Can we regulate Facebook the way that GDPR is regulating Facebook in Europe? I think users are more focused on, hey, this relationship I have with you feels really unfair, and I don't know what you're doing with my data, and I don't know why you make so much money using my data. I think you're listening to me on the microphone on my phone all the time. It's like the most common conspiracy theory people have about Facebook. That's divergent. I'd be very surprised if Congress asked Mark Zuckerberg if they listened to the microphone on a phone all day long. What's the end result of all of this, meaning, I think, from the investor community and even the tech community, six months, a year from now, is the product going to be fundamentally different? Is the business model going to be fundamentally different? Are we even going to be talking about this? I think Facebook's biggest problem is that as they try to grow into new models, they have to recapture all that user trust. That Sheryl Sandberg quote that we watched, the question is, why didn't you do this before? You have all these moves in your back pocket. You're going to rewrite the data policy in one day. You're going to give new interfaces to manage your data that rolled out in a week. Well, if you had all that in your back pocket, why didn't you do it before? Why are you just thinking about this now? I think they have a long way to go to rebuild that user trust before they can roll out new products. You think without that trust, what happens? We've been debating just how much people care about this, meaning we're all talking about this. I think there are people who deeply care about it. I know Becky cares about it. To some degree, by the way, I care about it too. I don't want to say I don't, but I do think there's a whole generation that if you actually put the controls in front of me, I don't even know if they're actually going to go and toggle off all of the data issues. If they know that the flip side is they're not going to get something else on the other side. You know what I think is interesting? We did a survey last October where we took a nationally representative poll and asked people how they felt about tech companies. People do not trust Facebook. On the same token, they don't know that Facebook owns Instagram. The main Facebook product might change. People might feel differently about it. It's when that starts to hit the other products and their growth is stalled by what's going on with the trust issue. Is your thought that people are going to either delete Facebook, use Facebook less, or that advertisers say, you know what? We don't really want to do business with this company. Do you think any of those things are really on the table in a meaningful way? I think we're in a moment now where people are really reconsidering their social media usage and this is a prompt for them to say, hey, maybe I don't want to use Facebook more. That dovetails with Mark Zuckerberg saying, hey, I'm focused less on engagement. I'm more interested in time well spent. Maybe you see people use Facebook less. They said the delete Facebook campaign hasn't taken off. The advertising piece, I think, is really interesting. The majority of Facebook's advertising isn't blue chip Fortune 500. It's direct sales in targeted programmatic ad buys. You can't boycott one guy selling t-shirts. You can't boycott a startup that has a Kickstarter, whatever, they're probably going to fail anyway. That is this huge bulk of advertising and I don't think that's going anywhere for Facebook. It's such a good business. Hey there. Thanks for checking out CNBC on YouTube. Be sure to subscribe to stay up to date on all of the day's biggest stories. You can also click on any of the videos around me to watch the latest from CNBC. Thanks for watching.