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Twitter’s share price fell as much as 8% on Monday morning during pre-market trading, following the decision to permanently suspend Story by US President Donald Trump.
Although the affected account (@realDonaldTrump) was the president’s personal account, it was the one he primarily used, and Twitter had never banned a head of state before.
The company’s decision, which came after the market closed on Friday, made the initially temporary suspension from Trump’s account on tweets that Twitter said were “likely to inspire others to replicate the acts of violence that took place on January 6, 2021” – a reference to the Trumpist insurgency on Capitol Hill that made five dead.
Trump’s account had more than 88 million followers, although many of his followers have already made their way to a relatively new right-wing social network called Speak – which itself has been got out through bans on the distribution of Google and Apple, plus the rejection by its host, Amazon.
Facebook is also down 1.8% in pre-market commerce, underperforming the highly technological Nasdaq.
Losing users may be part of the reason why Twitter investors are going after the company, but the main reason is likely the regulatory fallout from last week’s events.
Trump’s Twitter blockade, along with Facebook’s decision to suspend the president’s account at least until President-elect Joe Biden is inaugurated next week, came too late for critics who have long viewed companies as too tolerant of hatred and incitement on their platforms. Big Tech’s European nemesis were quick to turn the corner as evidence of a need for change.
“Don’t hide anymore”
“Social media companies blocked US President Donald Trump’s accounts on the grounds that his posts threatened democracy and incited hatred and violence. In doing so, they recognized their responsibility, their duty and their means to prevent the dissemination of illegal viral content, ”wrote Thierry Breton, Commissioner for the Internal Market of the European Union, in a Sunday Editorial for Politico Europe.
“They can no longer hide their responsibility to society by arguing that they are simply providing hosting services.”
Breton said the actions of Twitter and Facebook proved they had become “systemic players in our societies and democracies”, not just providers of neutral platforms. He argued that the “dogma” underlying Section 230 of the US Communications Decency Act – which exonerates platform providers from liability for content posted on their services – “has collapsed.”
The commissioner went on to promote the European Commission’s proposals on the “digital services law”, which would see Facebook and Twitter facing huge fines if they did not stop the dissemination of illegal content on their platforms.
It should be noted that Article 230 has a long-standing European counterpart to Article 14 of the Electronic Commerce Directive, which also exempts tech companies from liability for what happens on their platforms, unless they are made aware that the activity is illegal. Breton’s editorial did not note that the digital services law (the Commission promised)leave these protections intact.
Nevertheless, Breton’s article ended with an argument to the new Biden administration, to collaborate on “globally consistent principles” regarding the regulation of online platforms. This invitation is likely to be warmly received, given that Biden has previously said he is in favor of repealing Section 230.
All of this may explain why investors are afraid of Trump’s Twitter ban.
They might not have an ideological problem with the president’s semi-silence, but they would have a big problem with Twitter and its peers losing the protections they and their users take for granted – and the argument against these protections was undoubtedly strengthened last week.
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