Trump takes on Twitter

Donald Trump's row with social-media giants is another sign that Big Tech may face a regulatory and political clampdown. Matthew Partridge reports

It has been a “momentous week” for social media, says Tae Kim on Bloomberg. Twitter’s shares slumped by 9% after the company decision to regulate some of President Donald Trump’s “most controversial posts” sparked a “backlash” from the president. 

After Twitter added a fact-check warning label to two of the president’s posts about voting by post, Trump insisted he would “strongly regulate or close” social-media platforms. He then signed an executive order that “seeks to limit some of the broad liability protection social-media companies have under federal law”.

Trump is targeting Section 230 of the Communications Decency Act, says Charlie Savage in The New York Times. This prevents social media being sued for libel by stating that it “will not be treated as the publisher or the speaker for making others’ posts available”. 

It also means social-media firms can’t be sued for making “good faith” decisions to remove or restrict posts they deem “obscene, lewd, lascivious, filthy, excessively violent [or] harassing”, even if such material is constitutionally protected. Trump’s executive order argues that if they remove posts in “bad faith”, they should lose their immunity.

Twitter’s shareholders shouldn’t panic, says David Smith in The Guardian. “[The] bark of [the] executive order is likely to be worse than its bite.” The courts look set to rule that a change in the law would require an act of Congress. What’s more, Trump’s “dependence” on social media means he can’t go too far (or even quit Twitter) since he could end up losing one of the key platforms of his presidency.

Facebook takes a different approach

Ironically, Twitter’s rival, Facebook, is under fire for taking the opposite approach to Trump’s posts, with employees staging a “virtual walkout”, says Deepa Seetharaman in The Wall Street Journal. It took place in response to Mark Zuckerberg’s decision to leave up a post from Trump about recent social unrest that many say “violated the company’s rules about inciting violence”. While Zuckerberg said he found it “deeply offensive”, he argued that it was better to leave it up in order “to have this discussion out in the open”.

Both companies may not be in any imminent danger, but in the longer run some sort of regulatory change may be on the cards, says Lex in the Financial Times. After all, Trump’s opponent, Joe Biden, has also called for Section 230 to be changed. He wants social media “to be more responsible for misinformation”. 

Such cross-political support for change “could push Congress into greater scrutiny of the law”. If this happens, then all social-media companies could either be obliged to “limit publication to a far smaller group of users”, which would hit advertising, or “monitor everything that is posted on their sites”, requiring a “huge increase in headcount”.

Recommended

Should you be worried about energy windfall tax proposals?
Energy

Should you be worried about energy windfall tax proposals?

Calls have been growing for a windfall tax on UK oil and gas producers. It's a popular idea, but is it a good one? And what does it mean for investors…
24 May 2022
Four high-quality US stocks to give shelter from the storm
Share tips

Four high-quality US stocks to give shelter from the storm

Professional investor Timothy Parton of the JPMorgan American Investment Trust picks four solid US stocks to buy now.
24 May 2022
Three undervalued mid-cap stocks with attractive prospects
Share tips

Three undervalued mid-cap stocks with attractive prospects

Professional investor Katen Patel of the JPMorgan Mid Cap Investment Trust picks three fast-growing mid-cap stocks to buy now.
24 May 2022
Could a stronger euro bring relief to global markets?
Currencies

Could a stronger euro bring relief to global markets?

The European Central Bank is set to end its negative interest rate policy. That should bring some relief to markets, says John Stepek. Here’s why.
24 May 2022

Most Popular

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Everything is collapsing at once – here’s what to do about it
Investment strategy

Everything is collapsing at once – here’s what to do about it

Equity and bond markets are crashing, while inflation destroys the value of cash. Merryn Somerset Webb looks at where investors can turn to protect th…
23 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022