Social Network (11)
The afternoon hearing dragged on.
Members of the House and Senate took turns berating him and lecturing him, but they were mostly just repeating the same points they had already made.
As time passed, the expression on CEO Goldenberg’s face only grew more relaxed.
He laid out his position without hesitation.
“This is a matter of balance. As you said, censorship measures can catch fake news and hateful content, but they can also stifle freedom of expression. We have to find a balance somewhere in between.”
Compared with the opening of the hearing, the lawmakers who had come in bristling with hostility were beginning to lose their edge.
“Do you believe Facenote is responsible for the Myanmar and Ethiopia incidents mentioned in the internal documents?”
“We are working to address the spread of misinformation and harmful content. We should have stopped it properly, and I acknowledge that our efforts were insufficient. We bear great responsibility, but we failed to do the job right. For that, I offer my sincere apology.”
Then Senator Hogan took the floor.
He was a young senator at thirty-seven, and as the representative of California, he was very friendly toward Big Tech companies.
And Facenote was an important donor to his campaign.
After a brief exchange of glances, Hogan asked, “Before this whistleblower came forward, were you aware that short selling was taking place?”
“Yes. Hedge funds, including Continue Capital, had built massive short positions in Facenote before this happened.”
“Why do you think they shorted it? Do you believe it had anything to do with this situation?”
Goldenberg went on. “I don’t believe the whistleblower has any connection to the hedge funds. What is certain, however, is that when Facenote’s stock falls, someone profits. What concerns me is that false, exaggerated reporting could end up hurting ordinary shareholders.”
If you can’t attack the message, attack the messenger.
It was a common tactic in a public opinion war. And if it was common, that meant it worked.
Goldenberg watched the senators’ faces.
Williams, Johnson, Carlton, and the rest of the lawmakers who had gone after him so hard during the morning session all looked as though they had been caught off guard.
A smile tugged at the corner of his mouth.
It’s over.
That single remark had completely turned the atmosphere around.
If they kept pressing him, the result would be a drop in Facenote’s stock price.
If that served social fairness and justice, then fine. But if it ended up hurting innocent shareholders and lining the pockets of hedge funds, the story changed.
One wrong move, and they would find themselves under a storm of shareholder backlash.
Realizing that, the senators quietly lowered the temperature of their questions.
“Ahem. What measures do you have in place to make sure this doesn’t happen again?”
Goldenberg answered with confidence.
“I created Facenote, and I ran Facenote. Everything that happened at Facenote is my responsibility. To bring change to the company as a whole, time is required. But I will do everything I can to correct the problems that have been pointed out today. My goal, when I first created Facenote, was the same as it is now: to connect the world and make it a better place.”
He said the right things about taking responsibility and changing, but he never actually offered a single concrete measure.
And yet not one of the senators pointed out that problem.
To be honest, none of them cared much about what he did after this. As long as the Big Tech companies kept showering them with lobbying money, there was no need to crack down too hard anyway.
All that mattered was that the public watching at home thought the lawmakers had done a good job.
Just when everyone thought the hearing was over, Senator Phillips stepped forward.
He was a leading Democratic presidential candidate, and the man who had pushed for this hearing in the first place.
“The other members have already asked enough questions about the algorithm issue, so I won’t bring that up again. But I do want to speak about Facenote’s social responsibilities.”
“We respect the law and order, and we intend to continue following it.”
Goldenberg answered, all the while smiling to himself inside.
Of course.
He probably didn’t want to be accused of hurting shareholders while helping hedge funds, so he would prefer to wrap things up here and now.
The important part came after the hearing ended.
He wasn’t getting away with this.
Fortunately, this hearing had shifted public opinion in a favorable direction.
He planned to tie this revelation to Continue Capital, WST, and the whistleblower, then paint them all as part of a scam designed to profit from short selling.
Whether that was true or not didn’t matter.
After all, for most people, what they saw was the truth.
Now that they had come after him, they were going to pay for it. And the first step was to crush the whistleblower and WST.
Just as he was thinking that, Senator Phillips spoke.
“Then please answer this question.”
Phillips took a document from an envelope, and a staff member carried it over to the witness.
“I think you know what this is.”
“……”
The moment he saw it, the relaxed expression on his face changed in an instant.
This... how the hell did they get that?!
Seeing his panic, the audience in the gallery began to murmur.
Senator Phillips continued, “Last month, an attack exploiting a security flaw in a hacker group led to the leak of personal information belonging to 150 million users. Among the 60 million whose private data was exposed were not only names and email addresses, but also mobile numbers, ages, genders, nationalities, religions, login credentials, and search histories. My own two daughters’ contact information and email addresses were exposed as well. The data was being traded on the dark web, and the FBI has now arrested the people involved.”
The people in the hearing room were stunned by those words.
Facenote’s user data had been hacked?
Phillips went on in a calm but clearly angered voice. “I understand this isn’t the first time Facenote has suffered a breach. In the past, the personal information of fifty million users was handed over to a British firm called Nottingham Analytica and used for political manipulation, including the Brexit campaign and election influence operations. In addition, last year a hacking forum leaked the names, phone numbers, email addresses, and birthdates of 530 million users, causing harm to people in more than a hundred countries. And earlier this year, another app accessed private photos stored in Facenote accounts and on smartphones, spreading images containing users’ private lives all over the place. Mr. Goldenberg, you claimed Facenote’s data collection posed no problem and that all information was being safely managed. How do you explain this?”
What Phillips had described was real.
But Facenote had only recently become aware of it, and they were still investigating the exact scale of the damage.
So how in the world had he found out so fast?
It couldn’t have been a coincidence.
Someone had definitely been behind this.
And in that instant, one face came to mind.
No way... Continue Capital?
So they had prepared this too?
As Phillips had said, this wasn’t the first time Facenote’s personal data had been leaked. Every time it happened, it made noise for a little while, then died down without much trouble.
But this time, the situation was different.
Phillips pressed on. “Was Facenote aware of the hack? If so, why didn’t you notify your users?”
“That is...”
“Let me ask again. When did Facenote become aware of this issue? And when was it reported to the CEO? If it wasn’t, then why not?”
“……”
A heavy silence settled over the hearing room.
After a long moment, Goldenberg finally gathered himself and stammered, “Th-that matter is currently under internal investigation, so...”
“When were you planning to tell your users? After the investigation was over, perhaps?”
“Th-that’s not...”
“Is Facenote willing to change the way it collects user data and modify its current business model in order to protect privacy?”
“S-Senator, we’re already continuing various efforts to make changes in that area, and on that point we...”
“Answer with yes or no.”
“……”
Dozens of cameras were fixed on his face, but the flustered Goldenberg CEO couldn’t say a word.
The sale of Yuseong Town D-Dong was completed.
The subsidiaries had already moved out, leaving most of the floors empty. Continue Capital had been the first to relocate, and Edward Benson had reassigned the personnel.
Then Mabel Entertainment, Kim Beom-seok’s agency, decided to move as well, and with the entertainment investment division and fashion investment division newly established, the building was buzzing with relocations and renovation work.
In the middle of all that chaos, Dong-ho heard some astonishing news.
Continue Capital had shorted Facenote.
And not by a little, either.
$40 billion worth.
“What the hell is this? Why would they go after Facenote when it was just sitting there?”
Dong-ho asked Edward.
“What do you think the reason is?”
“Honestly, I have no idea.”
In truth, even the reporters writing the articles didn’t really know why.
Which meant the best thing to do was ask the person involved directly.
Dong-ho called Han Miru right away.
“Why did you short Facenote?”
“……Huh?”
As everyone wondered whether such a move could ever succeed against one of America’s Big Five tech giants, the whole thing played out in a nervous hush.
Then events began to unfold one after another.
After Enple’s new privacy protections, WST ran an investigative report based on the whistleblower’s tip, and then came the Senate hearing.
The hearing, which began at 10 p.m. Korea time, stretched past midnight and into the early morning.
And yet no one went home. Everyone stayed glued to the television, watching the Facenote hearing unfold.
Contrary to expectations that he would be cornered, Goldenberg put up a surprisingly strong fight. He slipped around the senators’ sharp questions, acknowledged problems where he had to, and insisted that there had never been any malicious intent.
Then, near the end of the hearing, he countered by bringing up the short-selling issue.
“Oh. If this keeps up, he’s done for.”
It was a petty tactic, but it worked.
After that, the senators couldn’t press him properly, and perhaps because of the backlash against short sellers, the stock rebounded even more strongly.
But then...
When the personal data hack came to light, the atmosphere changed in an instant.
Under Phillips’s relentless questioning, Goldenberg couldn’t produce a single proper answer and just kept stumbling over his words.
Dong-ho quickly turned and checked Facenote’s stock price.
Then he gasped in disbelief, his mouth hanging open.
“Is that stock price for real?”
The hearing ended in Mike Goldenberg’s complete defeat.
The CEO of Facenote admitted that the company had failed to protect user data and said they would look for remedies as quickly as possible.
Facenote’s market capitalization had once climbed above $1 trillion.
But between Enple’s tighter privacy rules and the wave of scandals, it had fallen to $830 billion.
And after the hearing...
The stock plunged 36 percent in a single day, vaporizing $300 billion in market value.
That was enough money to match an entire year’s budget for many countries.
It was the biggest drop since Facenote went public, and the largest one-day loss ever recorded for a single stock in U.S. market history.
If you looked only at percentages, there had been companies that lost ninety-nine percent in a day.
But for a blue-chip giant of this size to collapse this hard in so little time was unprecedented.
The crash in Facenote’s stock price dragged the Nasdaq down by three percent as well.
At Continue Capital HQ, everyone had stopped what they were doing and watched the Facenote hearing with the same tense focus people reserved for a sporting event.
And then, the very moment Facenote’s stock began to collapse, the market screamed, while at Continue Capital the room burst into cheers.
They had brought down a Big Tech giant worth more than $1 trillion.
The stock didn’t crash simply because it lost the hearing.
The real blow was moral collapse.
Big Tech companies had been able to keep expanding despite monopolistic practices because, until now, they had still offered something that benefited customers.
But this incident exposed the truth: Facenote had been moving not for the benefit of users, but purely for the benefit of the company itself.
As public opinion turned against it, companies moved quickly.
Global giants like Starbucks, Nike, and Coca-Cola announced that they would no longer advertise on Facenote.
If these incidents had broken out one by one, Facenote could have handled them. But because they all exploded at once, the company got hit with the full force of the shock.
David looked at me and said, “You pulled it off again.”
“It was all thanks to Trish.”
One well-raised reporter was worth ten investors.
I patted Joseph on the shoulder.
“You worked hard.”
He had done a great job digging up materials and writing the report, and the information he found had been a huge help to Trish when she wrote the article.
At my words, he lowered his head, practically bursting with joy.
“Thank you! I’ll work even harder from now on.”
While everyone else was screaming, Continue Capital quietly closed out its short position.
On an investment of $42 billion, the firm made about $18 billion after costs and fees.
Some people lost money. Others made it.
In Wall Street, that was an everyday occurrence.