Social media companies have long been accused of either excessively curbing participants’ rights to free speech or irresponsibly using private data collected by their users. Although the issue seems to have been pushed aside in light of this COVID-19 pandemic which has gobbled up most of the financial media’s attention, it seems like federal regulators haven’t forgotten about this topic at all. News outlets across the country are now reporting that the Trump administration is about to sign an executive order on Thursday regarding social-media giants and their capability to potentially restrict the free speech of their members.
The Wall Street Journal reported on Wednesday that this new executive order would seek to limit the legal protections surrounding social-media platforms, making it easier for regulators to hold these companies accountable for restricting free speech. Although, at this point, the executive order is still a rough draft and could see some changes in the future, it does finally mark the beginning of the president’s promises to do something about social media companies.
More specifically, sources familiar with the subject went on to say that the draft in question would see social media companies should lose certain protections granted to them from Section 2030 of the 1996 Communications Decency Act. This piece of legislation protects online companies from any legal repercussions based on what the users of these platforms do or say. However, the new draft would treat social media platforms as a type of public square, something that would allow further protection of free speech rights for individuals on the platform. What’s more, the new order could give federal authorities the power to suspend any advertising contracts made with companies that violate this new executive order.
While the president has made comments before about going after social media giants, sources familiar with this topic reported to the journal that Trump had become increasingly frustrated over the past few weeks in regards to many companies, Twitter (NYSE: TWTR) in particular. Other social media platforms, like Facebook, have already been under regulatory pressure in regards to how they use private user data, and whether this information is sold off to other sources. While the White House refused to comment about the specifics, a spokesperson did confirm that an executive order would be coming within the next 24 hours.
Shares of Twitter, in particular, are down around 6% when you include after-hours trading, with further declines likely to occur once Thursday’s markets open for business. Most social media giants have traded more or less in tandem with the markets at large, seeing a dip in share prices in March before recovering most of their losses over the past couple of months.
Twitter Company Profile
Twitter is an open distribution platform for and a conversational platform around short-form text (a maximum of 140 characters), image, and video content. Its users can create different social networks based on their interests, thereby creating an interest graph. Many prominent celebrities and public figures have Twitter accounts. Twitter generates revenue from advertising (90%) and licensing the user data that it compiles (10%). – Warrior Trading News
