US Reviewing Internet Company Liability

US Reviewing Internet Company Liability

almost 4 years ago2 mins

Mentioned in story

The US government revealed plans this week that might eliminate measures currently protecting some of the biggest internet companies from serious lawsuits – and concerned investors just want to know where they stand, y’know? 🤨

What does this mean?

As it is, America’s online platforms – including social media sites – are protected from liability for user-posted content under federal law. And that’s probably a big relief to them given the sheer number of cases of harassment and libel in recent years.

Daily Brief Image

But the US government now seems to be arguing that since the Twitters of the world have taken to editing their users’ posts – by, say, fact-checking certain high-profile users – they might now forfeit those protections. And if that is what the review concludes, social media giants could be responsible for what their users post and open to legal action if it falls foul of the laws of the land 🇺🇸

Why should I care?

At-risk companies saw their share prices fall on Thursday – including Facebook’s by 2% and Twitter’s by 4% – possibly because they could face the “negative jaws” of falling revenue and rising costs 🦈 The potential for increased legal fees, settlements, and damages, after all, would leave them less cash to reinvest in future growth or to return to investors. Taking steps to more proactively police users’ posts would increase costs too – and it may even put some users off, reducing activity and lowering the ad revenue the social giants are able to generate.

Daily Brief Image

When Twitter announced it’d ban political ads on its platform last year, Facebook made no such promise 🤷‍♀️ And it’s taken the other side of this debate too: Facebook’s CEO said on Thursday that he doesn’t think it’s social networks’ responsibility to fact-check politicians. Those diverging ideologies may foreshadow a split in their user bases, and could ultimately result in each having a smaller, if more engaged, audience.

Daily Brief Image
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG