President Donald Trump is likely to sign an executive order on social media companies as early as Thursday, said White House officials on May 27. The move comes two days after Twitter, Inc. TWTR took the rare step of fact-checking two of his tweets. The move drew the ire of Trump and his supporters, who blasted the micro-blogging site for engaging in censorship and exhibiting political bias.
An executive order could mean a lot for social media companies, which are already under the scrutiny of regulators for the way they handle personal data and their privacy policies. Moreover, Trump’s decision to sign an executive order comes at a time when the U.S. economy is battered and bruised by the coronavirus pandemic and tech companies, particularly the FAANG stocks, have been driving the markets.
Twitter Draws Trump’s Ire
On May 27, Trump threatened social media companies with new regulations or even to shutter them after Twitter added fact checks to two of his tweets a day earlier. In the tweets, Trump made unsubstantiated claims about vote-by-mail ballots saying that mail-in voting lead to vote fraud and ineligible voters getting ballots.
After Twitter fact-checked two of his tweets, Trump immediately fired back tweeting social media platforms “totally silence conservatives voice.” He also threatened to “strongly regulate” social media companies or “close them down” altogether. A day later, White House officials said that Trump could sign an executive order on Thursday. However, they gave no further details.
That said, it was not immediately clear if Trump has the authority to shut down the companies.
Are Social Media Companies Courting Controversy Again?
It is quite unlikely because Twitter is not violating the First Amendment by marking up his tweets. Twitter is a private company and can moderate the speeches of its users, without legal penalty.
However, things can become difficult for companies like Facebook, Inc. FB and Alphabet, Inc.’s GOOGL Google that have become targets of antitrust scrutiny. Also, Trump can use his spat with Twitter to re-establish his opinion that big tech companies have an anti-conservative bias.
Big Tech in Line of Fire
Since then, regulators have time and again pulled up tech companies. Moreover, the likes of Facebook, Google and Twitter have also been accused for the way they handle political ads and promote fake news.
The COVID-19 outbreak has been an opportunity for many of these companies to rebuild their image. The likes of Facebook, Twitter and Google have already been doing their bit to curb fake news related to pandemic. Also, many have come together to develop technologies to fight the pandemic.
The Big Tech, particularly the FAANG stocks — Facebook, Google, Apple, Inc AAPL, Amazon.com, Inc. AMZN, Netflix NFLX — have been playing a major role in this respect. Moreover, tech players have been one of the few to have not only survived the pandemic but also drive the markets.
Apple was the first tech giant to make its presence felt in the fight against the deadly COVID-19. In March, the iPhone maker, in collaboration with the White House Centre for Disease Control (CDS) and the Federal Emergency Management Agency, launched an app and a website that allows users to do a self-screening for COVID-19. The company’s shares have gained 12.3% in the past 30 days. Apple carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Following that, Apple collaborated with Google to design a contact-tracing technology to slow the spread of the novel coronavirus by tracking who a person has been in close contact with. Google’s shares have gained 11.8% over the past 30 days. The company carries a Zacks Rank #3 (Hold).
Twitter removed thousands of misleading and potentially damaging tweets since Mar 18 after it announced a new guidance that bars content which could come in harm’s way. Twiter’s shares have increased 10.2% in the past one month. It carries a Zacks Rank #3.
Following the coronavirus outbreak that saw a surge in demand for medical equipment including respirators and face masks, Facebook announced that it will ban ads and commerce listings selling medical face masks on its platforms. The social media giant took similar steps on Instagram to stop people from exploiting the coronavirus emergency. Facebook’s shares have gained 22.2% over the past 30 days. It carries a Zacks Rank #3.
Amazon, which has often been slammed by Trump for paying the United States Postal Service too less to deliver its packages, has also been on a hiring spree to add muscle to its delivery arm as its online orders continue to rise during the pandemic. Amazon’s shared increased 1.4% in the past one month. It holds a Zacks Rank #3.
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