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Social Media Companies Face Pressure

Image via dole777 on Unsplash

It all started a few days ago on Tuesday when Twitter fact-checked U.S. President Trump's tweets about mail-in voting.

For the first time, Twitter placed a label saying "Get the facts about mail-in ballots" directly underneath Trump's tweets. Twitter defended the move, saying the tweets "contain potentially misleading information about voting processes and have been labeled to provide additional context around mail-in ballots."

The move by Twitter immediately upset Trump, who tweeted "Twitter is completely stifling FREE SPEECH, and I, as President, will not allow it to happen!"

With the move by Twitter on Trump's mind most of the week, he's decided to take matters into his own hands through an executive order. The executive order will crack down on social media companies by pushing the Federal Communications Commission to draft rules on how platforms can remove content while being protected from liability under Section 230 of the Communications Decency Act. The law allows social media companies to remain mostly free from liability for the content they publish.

Online publishers have defended Section 230 as a way for people to express their opinions while others, including presidential candidate Joe Biden, are against it and believe it allows them to not follow the same rules as other publishers.

"Fact check: there is someone ultimately accountable for our actions as a company, and that’s me," Twitter CEO Jack Dorsey tweeted defending the move. "We’ll continue to point out incorrect or disputed information about elections globally. And we will admit to and own any mistakes we make. This does not make us an “arbiter of truth.” Our intention is to connect the dots of conflicting statements and show the information in dispute so people can judge for themselves."

Shares of Twitter took a hit following the news over fears of what the executive order could do to the company's business model.

Facebook CEO Mark Zuckerberg disagrees with Twitter's move to fact-check tweets.

"I don’t think that Facebook or internet platforms in general should be arbiters of truth," Zuckerberg said. "Political speech is one of the most sensitive parts in a democracy, and people should be able to see what politicians say."

With the tech-heavy Nasdaq back within a few percentage points of its all-time high, it will be worth watching this unfold as heavily-weighted companies that could be affected such as Facebook and Google have largely contributed to the index's gains.

Leftover Crumbs

  • More than 40 million. Initial jobless claims were 2.1 million last week, bringing the total over the last ten weeks since the coronavirus lockdowns began to more than 40 million, according to the Labor Department. Despite the high number, initial jobless claims have now declined from the previous week's total for eight-consecutive weeks. Continuing claims, which is the number of people who have been collecting unemployment for two weeks, dropped by 3.86 million to 21.05 million.

  • U.S. GDP tanks. As a result of the coronavirus bringing the global economy to a standstill, U.S. GDP fell at a 5% annualized rate in the first quarter, according to the Commerce Department. The decline is larger than the 4.8% drop that was expected last month. The first quarter decline marks the largest quarterly decline since the fourth quarter of 2008 when GDP fell by 8.4%.

  • TikTok distancing from China. ByteDance, the parent of TikTok, is reportedly making moves to transfer decision-making and research out of China. TikTok has reportedly hired more than 150 engineers in California, as well as hired a New York-based investor relations director. The moves are reportedly causing tension with employees in China who believe they will be replaced as TikTok expands.

  • Amazon offers permanent jobs. Amazon will offer permanent positions to about 70% of the 175,000 employees it temporarily hired during the coronavirus outbreak. The remaining 50,000 employees will be offered seasonal contracts lasting up to 11 months. The permanent roles could give employees the chance to receive benefits such as health insurance and retirement plans. At the end of last quarter, Amazon had nearly 850,000 employees.

  • American Airlines is slimming down. American Airlines will reduce its management and support staff by 30%, affecting about 5,000 jobs. "Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits," American Airlines executive vice president of people and global engagement Elise Eberwein said.