Order

Twitter barely budges after Trump targets social media giants with Executive Order

Friday, May 29, 2020 by Robinhood Snacks | Disclosures

Watching the Trump-Dorsey feud

It started with a tweet... But the battle with social media giants has been #trending in DC for a while. On Tuesday, Twitter (for the first time) flagged two of Trump's tweets with links for additional information, as Twitter deemed the words from the President about mail-in voting "potentially misleading." Then yesterday, Trump signed an executive order targeting social giants — TLDR: he's not a fan of Section 230:

  • Section 230: Beautiful name — it's part of Congress' Communications Decency Act — it gives social media companies two key (and somewhat contradictory) things...
  • Immunity: Social media companies have broad immunity from liability for their users’ posts/actions.
  • Moderation: Social media companies also have broad powers to moderate/remove content on their sites (this is the more contentious one #spicy).

If Trump's order succeeds... Without immunity powers, Twitter and Facebook would have never grown into the giants they are today. If Facebook got sued every time someone posted something offensive or false, the 'Book would never have made it past Mark Zuckerberg's dorm room. Losing broad immunity would be disastrous for social media companies.

THE TAKEAWAY

Investors didn't break a sweat... Despite being (pretty much) directly targeted with an Executive Order by the President of the United States, Twitter's stock moved only slightly downward (4% Thursday). Facebook, which is equally affected by the move, barely budged (it's near an all-time high). Why?

  • Threats to regulate Big Tech have been hollow for years — despite all the fanfare since 2016, nothing much has changed.
  • The order is likely going to be challenged in court and may get blocked for overstepping the executive power. Section 230 was passed by Congress, and likely requires congressional action to repeal.