Mark Zuckerberg’s effort to avoid being dragged into the political arena ahead of the upcoming US presidential election is leading to a fierce debate as to whether Meta’s billionaire chief is going too far to placate critics such as Donald Trump.

Zuckerberg has spent recent weeks on a public effort to show he is above the partisan fray ahead of November’s poll, saying he had made the “political miscalculation” since 2016 of taking the blame on issues for which Facebook and Instagram were not responsible.

Election experts, civic integrity groups and former staffers told the Financial Times they were concerned Meta had rolled back certain election safety initiatives across the social network since 2020, while Zuckerberg last year embarked on a “year of efficiency”, cutting thousands of jobs at the platform under pressure from disgruntled investors to rein in costs. 

“I think it’s a low-key national emergency,” said one former elections staffer at Meta, who questioned whether the company had the “institutional capacity” to respond to major election threats.

Several people familiar with Zuckerberg’s thinking have said he is motivated by a desire to distance Meta from politics to focus on his artificial intelligence and metaverse ambitions, noting that since 2020 the company has sought to reduce the amount of political content served by its algorithms.

Meanwhile, the focus on efficiency and AI has helped boost Meta’s share price, which has risen 68 per cent this year to all-time highs, giving the company a market capitalisation of nearly $1.5tn. Zuckerberg’s net worth reached $200bn for the first time on Thursday, according to the Forbes Billionaires List.

Nick Clegg, the former UK deputy prime minister who heads Meta’s global affairs, now makes the majority of decisions on election policy, one person says. 

“[Mark] keeps trying to make people happy so they leave him alone and it’s just not going to happen,” said Katie Harbath, a former policy director who worked on Meta’s elections strategy for a decade. “On the one hand he’s right, he’s been blamed for stuff that wasn’t his fault. On the other hand, if you want to have an impact it comes with messiness.” 

Zuckerberg’s new approach comes after years of scrambling to contain criticism from politicians and the public over Meta’s impact on society, and to navigate internal and external battles over how the platform should treat elections and candidates. 

In a letter to the Republican-led House judiciary committee in August, Zuckerberg accused the Biden administration in 2021 of repeatedly pressuring Meta to “censor” certain Covid-19 content during the pandemic. He said he was “ready to push back if something like this happens again”.  

Zuckerberg has insisted he aims to be politically “neutral” in this election cycle and “not play a role one way or another — or to even appear to be playing a role”.

Critics say this messaging appears designed to placate Trump, noting that the Republican presidential candidate has repeatedly railed against — and even threatened to jail — the Big Tech chief.

“This is more of a shift in his political calculation on the balance of power in Washington and who he has to appease, rather than any underlying reality,” said the former elections staffer. 

Another former employee who had worked on Covid efforts said many who had been on the team at the time felt like the letter was “a slap in the face”, given they were trying to save lives in unprecedented circumstances.

Others argue Meta has pulled back from some of its misinformation efforts and reduced transparency, citing its decision to allow ads denying the result of the 2020 election and its shuttering in August of CrowdTangle, a tool long used by researchers to analyse the spread of content on the platform. 

One report by media non-profit Free Press found Meta was one of the worst social media offenders when it came to backsliding on policies it had in place for the 2022 midterm elections and cutting jobs relative to the size of the company, second only to Elon Musk’s X. 

Ed Bice, chief executive of non-profit Meedan, which builds digital literacy tools and provides some services to Meta’s WhatsApp, said Meta was no longer supporting “large-scale collaborative misinformation monitoring and response programs this year,” instead focusing on less expansive “artificial intelligence”-driven trust and safety work.

“The very clear, present and reasonable concern is that we will have a disputed election . . . and the fact that we don’t have a co-ordinated effort looking out across the information landscape investigating and responding to those reports,” said Bice. Meta was among the platforms used to spread widely debunked stories that Haitian immigrants in Ohio were eating residents’ pets. 

A Meta spokesperson said in a statement: “These are manufactured criticisms. Helping protect the US 2024 election online remains one of our top priorities, and we have around 40,000 people globally working on safety and security — more than we had during the 2020 cycle. Our integrity efforts continue to lead the industry.”

The platform will run its Election Operations Center during the November vote to address potential abuse in real time, and also has an independent fact-checking programme as part of its efforts to tackle viral misinformation.

Arie Perliger, professor in security studies at the University of Massachusetts Lowell, noted the platform had been largely successful in purging extremist groups in recent years. Meta last month banned Russia’s Rossiya Segodnya, or RT, from its apps “for foreign interference activity” shortly after the US government indicted two employees of the state-backed media group for their alleged involvement in a disinformation campaign.

Zuckerberg was sucked into partisan politics in the wake of the 2016 election after it emerged a Russian troll farm had used the platform for a pro-Trump disinformation campaign. He bolstered investment into election security going into the 2020 election and invested $400mn to support electoral infrastructure via the Chan Zuckerberg Initiative, his philanthropic group.

However, Meta was blamed by the left for playing a role in the violent uprising of the January 6 Capitol riots in 2021, accused of allowing the narrative that the election was stolen to rapidly spread across the platform.

From the right, he faced increasing allegations the company was staffed by liberals and deliberately censoring conservatives. His Chan Zuckerberg investment was interpreted as a ploy by some Republicans to boost the Democratic vote, earning the donations the nickname “Zuckerbucks”. A bipartisan government commission later reviewed the donations and concluded unanimously that they were apolitical.

This election cycle, Trump has loudly lambasted Zuckerberg, warning in July that if re-elected president he would “pursue Election Fraudsters” and send them to “prison for long periods of time”, before adding: “We already know who you are. DON’T DO IT! ZUCKERBUCKS, be careful!”

Separately, days later, Meta announced it was lifting the remaining restrictions left on Trump’s Meta accounts following his suspension from the platform, adding that they had been a “response to extreme and extraordinary circumstances”. 

Zuckerberg also publicly described Trump as a “badass” for his reaction to an assassination attempt and called him to apologise after the platform mistakenly took down photos of the attack. 

Trump said in a television interview that Zuckerberg had told him on the call he would not endorse a Democrat out of respect for him. Meta said the founder was already going to refrain from endorsing a candidate. 

Zuckerberg is no longer flanked by Sheryl Sandberg, Meta’s former chief operating officer and a longtime Democrat who was for years the political face of the company. Brian Rice, a former legislative assistant to Democratic senator John Kerry, is among those handling relationships with the left, while Joel Kaplan, a prominent conservative known for overseeing its relationships with Republicans, remains Meta’s vice-president of global policy.

Some suggest Zuckerberg has been emboldened by X’s Musk.

“With Elon Musk coming and literally saying ‘fuck you’ to people who think he shouldn’t run Twitter the way he has, he is dramatically lowering the bar for what is acceptable behaviour for a social media platform,” said David Evan Harris, the Chancellor’s public scholar at California University, Berkeley and a former Meta staffer. “He gives Mark Zuckerberg a lot of permission and leeway to be defiant.”

CHANCELLOR Rachel Reeves could announce several changes that may affect people on benefits when she delivers her first Budget later this month.

The head of Britain’s finances will unveil the Government’s latest plan for spending and tax on October 30.

1

At the beginning of September, the Chancellor cautioned that the Budget could involve “difficult decisions” on tax, spending and also benefits.

Ms Reeves has previously warned of a £22billion financial black hole in the UK’s finances, which she claims was left by the former Conservative government.

This grave figure has led many experts to believe the upcoming Budget could spell further misery for thousands living under the cosh.

But what exactly could it mean for the 20million Brits who claim benefits?

Benefits could increase in line with inflation

In previous Budgets, benefits like Universal Credit have been increased in line with September’s inflation figure.

This was seen in the Autumn Statement delivered last November, with households on benefits ending up £470 better off as a result.

However, this has not always been the case.

The previous government froze benefits for four years in the 2010s, in a blow to people who are eligible for the help.

However, experts predict that the Government will uprate benefits in line with September’s inflation figure, which will be released next month.

Experts at Pantheon Macroeconomics are forecasting that it will be around 2%.

Cuts to benefits spending could be announced

The Chancellor is understood to be mulling a reduction in the amount the state spends on benefits.

This rumour has been further solidified by comments made by Prime Minster Sir Keir Starmer.

At the Labour Party conference in Liverpool last week, the PM said there has to be “trade-offs” between maintaining the welfare state and supporting those in need.

He admitted there would be “hard cases”, but that the Government and business must join forces to get people clocking on again.

There are around 2.8million people who are long-term sick, with numbers having surged since the pandemic.

Future cuts to working-age benefits and tax rises have also been hinted by health secretary Wes Streeting.

Working-age benefits provide financial support to individuals and families who are of working age.

There are a number of different types including Universal Credit, Jobseekers Allowance, and Employment and Support Allowance (ESA).

Mr Streeting told the New Statesman that the Chancellor could make cuts to these benefits to help plug the £22billion black hole in the public purse.

It comes after the Labour government axed the £300 Winter Fuel Payment for pensioners who are not on means-tested benefits.

Mr Streeting said: “There are other choices to come and these aren’t just Rachel’s choices to face up to, these are the choices of the whole government.”

Crackdown on benefits fraud may be detailed

A crackdown on benefit fraud could also be outlined at the upcoming Budget.

The Government has previously promised to crackdown on fraudsters and get more people into work as part of a shakeup to the benefits system.

This could mean new laws will be introduced so that the Department for Work and Pensions (DWP) can ask banks to report fraudulent activity, for instance if a claimant has more than £16,000 in savings, or how much they earn.

Under the proposals, the DWP won’t be able to access bank accounts directly, and the exact information they can request is still to be confirmed.

The department could also be handed more powers to recover debts from those who can afford to pay it back but have avoided doing so.

Sir Keir Starmer said in his speech at the Labour Party conference: “If we want to maintain support for the welfare state, then we will legislate to stop benefit fraud.” 

Change to PIP payments may be confirmed

Personal Independent Payments (PIP) are a benefit for people who are under State Pension age and need help with day-to-day life because of a long-term illness or disability.

The previous Government began a consultation on reshaping the payment which swiftly closed a couple of weeks later.

At the time, there were suggestions that PIP payments could be changed to vouchers or one-off grants.

In August, Work and Pensions Secretary Liz Kendall unveiled a “Back to Work” plan.

As part of this move, changes to disability benefits are expected to be introduced to help cut NHS waiting lists and help people get back into work.

This has led many to believe she could roll out the changes floated by the Tory government to help aid her plan.

The Treasury has been contacted for further comment.

A strike that closed US east and Gulf coast ports will be suspended, and market reaction to escalations in the Middle East remains minimal. Plus, Italy’s government will raise more taxes from companies earning windfall profits, and luxury group LVMH will become a top sponsor of car-racing franchise Formula One.

Mentioned in this podcast:

US dockworkers suspend strike that threatened to cripple ports

Italy seeks to raise more windfall taxes from companies

The market reaction to global tensions might not follow the old script

LVMH strikes sponsorship deal with Formula 1

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Credit: CNBC, LVMH

The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

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Following the pandemic tech boom, edtech company Byju’s was India’s most valuable start-up in 2022, worth an estimated $22bn.

The company, founded by a charismatic former maths teacher Byju Raveendran, sold tutoring services to millions of parents seeking to prepare their children for India’s brutally competitive school entrance exams.

After winning investment from the likes of Mark Zuckerberg, BlackRock and Dutch tech investor Prosus, Byju’s went on a global acquisition spree and became a sponsor of the Fifa World Cup in Qatar and the country’s cricket team.

But after central banks raised interest rates following the Covid-19 pandemic, the cheap money dried up. The value of the company plunged, and investors were forced to write off stakes worth hundreds of millions of dollars.

Creditors of Byju’s are now in US courts to locate almost half of a $1.2bn loan, while the company fights insolvency proceedings in India over delayed national cricket authority sponsorship dues. The Qatar Investment Authority has also launched a case in India’s tech hub of Bengaluru, where Byju’s is based, to recover more than $200mn from Raveendran.

Byju’s has been unable to access its bank accounts and pay salaries as a result of the Indian legal proceedings, Raveendran said in a company-wide email in August shared with the Financial Times. “I have felt like a man screaming into a hurricane of hurdles,” Raveendran said. “When we regain control, your salaries will be paid promptly, even if that means raising more personal debt.”

Byju’s, which is now worth $120mn according to data provider Tracxn, has denied wrongdoing. Raveendran told the FT that his company no longer had access to capital and the entirety of the $1.2bn term loan at the heart of the sprawling legal battle with its creditors had been spent.

He said they had not been able to pay their lawyers in a Delaware court case and that what he described as the company’s “strategy” of trying to conceal money from creditors “has not gone right”. Raveendran added: “I will fight it out because we will win eventually.”

The company’s legal battles from Delaware to Bengaluru have shone a harsh light on start-up corporate governance standards, said Shriram Subramanian, founder of Bengaluru-based proxy advisor InGovern Research Services. “It’s a big failure of corporate governance from multiple perspectives,” he said.

Byju’s overdue accounts released in January showed losses almost doubling to nearly $1bn in the year to March 2022. While the platform still has about 7mn paying users, the number of employees — more than half of them teachers — has plunged from about 80,000 at its peak to about 27,000 today, Raveendran said.

Subramanian questioned why investors tolerated Byju’s delayed filing of accounts and pointed out that the company did not have a chief financial officer for 16 months between 2021 and 2023.

“The Byju’s saga has a general resonance,” Subramanian added. “There is an element of caution and more scrutiny of start-ups, investors are expecting more due diligence and a path to profitability. No more is there a blind throwing of money.”

Total annual funding to Indian start-ups was $32bn last year, less than half of the 2020 peak of $67.3bn, according to Tracxn.

“The different layers of scandal that have draped this company for the last couple of years create a very complex cocktail of issues,” said Nirgunan Tiruchelvam, a Singapore-based analyst at Aletheia Capital. “It’s not good for the tech ecosystem in India.”

A lawsuit launched in Delaware by a group of more than 100 creditors to recover $533mn of the $1.2bn syndicated loan to Byju’s secured in November 2021 has revealed disorganisation at the edtech company.

Earlier this year, Raveendran’s brother Riju struggled to explain to a US judge that he did not know the whereabouts of $533mn of the loan. Riju, who was the sole director of US-based Byju’s Alpha, a company created to receive loans, said in May: “I really don’t know where the money is.”

Riju, who lives with Raveendran and his wife Divya Gokulnath, the company’s husband-and-wife co-founders, in Dubai’s affluent Emirates Hills community, said he had sent emails asking them where the money was.

Raveendran said Riju had not lied as he had restricted information to him.

Riju’s attempts to find the funds “were tepid at best” and his “testimony lacks all credibility”, said US bankruptcy judge John Dorsey at the May hearing. The court found him in contempt and in July imposed a fine of $10,000 a day until the money was located.

“I have struggled in my own mind whether we are seeing ineptitude . . . or we’re seeing something more nefarious,” said Ravi Shankar, a Kirkland & Ellis advocate acting for Glas Trust, an agency representing more than 100 Byju’s creditors. “Two brothers doing whatever it can take to salvage a crumbling empire.”

After Byju’s Alpha was accused by the creditors of default, they removed Riju as sole director of the company in 2023 and installed Timothy Pohl, a restructuring expert. Last month, Delaware’s Supreme Court affirmed that default.

Pohl unearthed bank accounts that showed transfers signed off by Riju to a little-known Florida-based hedge fund Camshaft Capital. It was set up in 2020 and registered with the address of an IHOP pancake restaurant in Miami by then-23-year-old William Morton, a high school dropout with no investment qualifications.

In a separate Florida suit, the creditors’ lawyers allege Morton splurged on Ferrari, Lamborghini and Rolls-Royce cars after the Byju’s transfer, as well as a condo with an ocean view with a listed monthly rent of $29,000.

Morton’s lawyers said Camshaft “vigorously denies” the allegations. In June, they told the Delaware court that millions of dollars in fees he received in the deal were “not with us today”.

Earlier this year, it emerged in court that Camshaft transferred the funds to OCI, a British company. The creditors’ lawyers are now seeking documents about the transfer in UK courts. Morton and OCI did not respond to a request for comment. Raveendran said Camshaft had not lost the company money and declined to comment on OCI.

Riju’s lawyers at the end of July said in court that funds were spent on goods and services for Byju’s and “not for an improper purpose”. Byju’s has launched a counter-lawsuit in New York against the lenders, accusing them of unfairly accelerating the loan terms and negotiating in “bad faith”.

Raveendran added “there has never been any fraud” and “not a single dollar” of the loan was transferred to India or personal accounts.

Byju’s faces more legal challenges in India. The Qatar Investment Authority — the country’s sovereign wealth fund, which invested in the company and loaned Raveendran $250mn in 2022 — is fighting in a Karnataka court to claim back more than $200mn from him. Raveendran declined to comment on the QIA case.

Byju’s was also pushed into bankruptcy proceedings in India by the country’s national cricket authority over unpaid sponsorship dues. Although the company settled the case in August, India’s Supreme Court stayed the settlement order after the US creditors alleged Byju’s might have used money from their loan to pay the Board of Control for Cricket in India. Byju’s has denied the allegation.

The lenders know that time is not on their side. Earlier this year, they said the cost of recovering the funds could make “finding the money nothing more than a Pyrrhic victory”.

Raveendran said Byju’s would pay back the lenders. “If they have the patience, come work with me,” he said. “We will make a comeback.”

Swiss watch exports have fallen this year, but one market is showing strong growth: India. Exports to the country rose 20 per cent in value, year on year, in the first seven months of 2024 to SFr139.5mn ($165mn), compared with a 2.4 per cent fall globally. And that export value represents a 41.4 per cent increase on the same period in 2022 — the largest rise recorded by the Federation of the Swiss Watch Industry for any market, over such a timescale.

Now, a trade deal is set to make watch exports even easier. In March, India signed an agreement with the European Free Trade Association to phase out custom duties on Swiss watches (about 20 per cent) within seven years and give improved protection around the use of the terms “Swiss” or “Switzerland”.

India is, in many ways, an ideal watch market. It was the fastest-growing major economy in last month’s World Bank update, and one in which the number of millionaires (in US dollars) will rise 22 per cent between 2023 and 2028, to 1,061,463, according to the latest UBS Global Wealth Report. The Deloitte Swiss Watch Industry Study 2023 flagged the country as the “next big growth market”, and found that 94 per cent of Indian consumers wear a watch (in the US, it is 79 per cent).

“As the population is getting more wealthy and developing, and the luxury market is exponentially growing compared with the consumer market, there’s an upgrade [in the watches people buy],” says Karine Szegedi, consumer industry and fashion and luxury lead at Deloitte Switzerland, and the study’s co-author.

Watchmakers are expanding their retail presence. IWC opened its first boutique in India, at Jio Mall in Mumbai, last November. Then Breitling launched boutiques in Chennai and Pune earlier this year, having opened its first Indian store in Hyderabad in 2023. It plans to have boutiques in each of the country’s top eight to 10 cities.

The luxury market is growing compared with the consumer market . . . there’s an upgrade in timepieces people buy

This focus comes amid a slump in sales in China, the second-largest export market for Swiss watches. There, the value of exports fell 23.2 per cent, year on year, between January and July, to SFr1,269.5mn. “We’re being asked if [India] will be offsetting the maybe softer results in China,” says Szegedi. “Not yet, because it’s an immature market . . . We believe that now, as well, with the EFTA agreement, you have to enter it to test it and see how the market responds to your brands.”

Gerald Charles started working with Ethos Watches, an Indian retailer, in Delhi and Mumbai last November after noticing rising demand from rich Indians who were travelling to, or had homes in, Dubai. It launched in two further locations, Bengaluru and Kochi, last month. Federico Ziviani, Gerald Charles chief executive, says there will be a fifth opening next year — bringing the brand, which he says makes 1,500 watches a year, to capacity for the country .

He says the Indian market, where the brand’s emerald green watches are popular, is robust because it is driven by internal demand. “Thinking about what happened during Covid, where travelling was blocked, only the strong local markets performed well,” he says. “So that’s why it’s so important to be in India, rather than selling to Indian collectors from abroad, because this creates a service to them, because they have the watch right at [their] doorstep. [It also] creates robustness in case of any geopolitical or economic changes.”

Ziviani says the challenge in a country of 1.4bn people is getting the watch “on the right wrist”. “We have the advantage that the Gerald Charles watch . . . is very polarising,” he says. “You hate it or love it . . . so there is a strong component in the client choosing us.”

Cricket — a sport beloved in India — is influential in growing brand awareness. Panerai previously had former India captain MS Dhoni as an ambassador and collaborated with him on two limited edition timepieces exclusive to the Indian market in 2019. Mohit Hemdev, Panerai brand manager for India, says this “really helped the brand get the right kind of visibility in the market”.

Jean-Marc Pontroué, chief executive of Panerai, says exposure through cricket and the “evolution” of India meant the time was right for expansion. “You see the number of planes this country is ordering, the new facilities built, new industries growing — that is contributing to the development of the country, which creates a growing affluent customer group,” he says. However, he says Panerai’s growth will depend on “the speed of the luxury industry” — such as the development of malls.

Panerai opens its fourth India boutique, in Bengaluru, this month. The brand also has 10 points of sale across six cities with partners including TimeVallée, the Richemont-owned multi-brand retailer. Pontroué says Panerai has tripled its business in India since 2018. “It’s by far the fastest-growing nationality we see appearing more and more with knowledge of luxury watches,” he says.

Pontroué says that, while India has a long association with jewellery, the more recent appetite for high-end watches is driven by interest in gold, jewellery watches, and Switzerland. Hundreds of Bollywood films have been at least partially shot in Switzerland, against scenic backdrops such as the Alps. “[For] a lot of Indians, their first or second European destination to visit becomes Switzerland,” says Hemdev.

Rado, which has worked with Indian Bollywood actor Hrithik Roshan since 2011, took on British Bollywood actress Katrina Kaif as an ambassador last October to target female customers. Adrian Bosshard, Rado chief executive, says there has been an “overproportion increase” in its women’s watch segment in India this year and last.

Other brands are seeking to attract clients with special releases. Carl F Bucherer launched a Heritage BiCompax Annual Hometown limited edition dedicated to New Delhi, featuring city landmarks engraved on the case back, with Ethos Watches in June. Raymond Weil, which has traded in India since the early 1980s, launched the Freelancer Ganges India limited edition last October to celebrate 20 years of its own collaboration with Ethos.

Rado saw India overtake China as its largest market for sales about two years ago, says Bosshard. The brand has 33 boutiques in India and more than 200 other points of sale. Bosshard says Rado has built “customer confidence”, which helps as Indian consumers “are very cautious to have value for money”. For this reason, the brand’s ceramic watches are popular, he says, because their “scratch resistance” means they have “a long-term beauty on your wrist”.

An informal survey of about 100 partners and directors from Deloitte Consulting in India in July found that, while Rolex was the most recognised Swiss watch brand, it was followed by Swatch Group houses Omega, Tissot and Rado, respectively, showcasing the early investment that group made in the market. Popular high-end brands, including Patek Philippe, Audemars Piguet and Richard Mille, did not feature in this top 10 for brand recognition in India.

Bosshard compares the situation in India to what he saw in China 20 years ago. “Purchasing power is growing and, of course, in this kind of environment people want to celebrate themselves.”

One opportunity identified in the Deloitte Swiss Watch Industry spotlight on India, from July, is to tap into wedding gifting. It found 40 per cent of Indians planning to buy a watch within 12 months would do so for a present, compared with 27 per cent globally.

Deloitte’s 2023 study predicted India would be in the top 10 of Swiss watch export markets within a decade. It was 22nd in July. However, Bosshard would not be surprised if this happened within seven, or even five, years.