Jack Dorsey, founder and CEO of Twitter Inc. (TWTR, Financial), shocked media mavens and market movers alike with his surprise announcement that the popular social media platform would no longer permit paid political advertising.
Dorsey has essentially adopted a view that is diametrically opposed to that of another social media titan, Facebook Inc. (FB, Financial). Facebook CEO Mark Zuckerberg has undertaken an aggressive defense of his company’s broadly laissez faire approach to political advertising in recent months.
Mr. Zuckerberg goes to Washington
On Oct. 16, Zuckerberg laid out his defense of Facebook’s hands-off approach to political advertising in an interview with The Hill:
"[It’s] something we have to live with. People worry, and I worry deeply, too, about an erosion of truth. At the same time, I don’t think people want to live in a world where you can only say things that tech companies decide are 100 percent true. And I think that those tensions are something we have to live with. In general, in a democracy, I think that people should be able to hear for themselves what politicians are saying. Often, the people who call the most for us to remove content are often the first to complain when its their content that falls on the wrong side of a policy."
The following day, the embattled social media boss sounded much the same in a speech at Georgetown University:
"Political ads on Facebook are more transparent than anywhere else. We don’t fact-check political ads…because we believe people should be able to see for themselves what politicians are saying. I know many people disagree, but in general I don’t think it’s right for a private company to censor politicians or the news in a democracy. And we are not an outlier here. Political ads can be an important part of voice, especially for local candidates and up and coming challengers that the media might not otherwise cover. Banning political ads favors incumbents and whoever the media chooses to cover."
Zuckerberg’s position boils down to the contention that companies should not put their thumbs on the scales of political discourse by banning certain speech from their platforms. Instead, the free and open marketplace of ideas should be allowed to do its work, providing individuals with a wide range of policy positions, candidates and causes and allowing them to decide for themselves.
Mr. Dorsey packs it in
In his Oct. 30 tweet barrage, Dorsey did everything short of directly repudiating Zuckerberg’s established position on political advertising. Instead of treating the pernicious and growing problems of fake news, misinformation and skewed facts as issues that people must simply accept and live with, Dorsey argued that social platforms are better off removing themselves from responsibliity entirely:
"Internet political ads present entirely new challenges to civic discourse: machine learning-based optimization of messaging and micro-targeting, unchecked misleading information, and deep fakes. All at increasing velocity, sophistication, and overwhelming scale. These challenges will affect ALL internet communication, not just political ads. Best to focus our efforts on the root problems, without the additional burden and complexity taking money brings. Trying to fix both means fixing neither well, and harms our credibility."
In essence, Dorsey has made the case that, if social media companies are willing to accept money in exchange for political ads, they become part of the problem, tacitly accepting the emerging status quo with all its potential to harm public discourse.
Clash of the social media titans
The meteoric rise of social media has presented significant societal, economic and political challenges. Moreover, it is driving a technological and social paradigm shift that has already touched virtually every person living today.
There is still a great deal of uncertainty, and society has a lot of growing up to do as it adapts to an increasingly digital and networked reality. Thus, it is not a simple task to adjudicate between the opposing viewpoints currently being voiced by Zuckerberg and Dorsey.
From a purely business standpoint, Zuckerberg appears to have the stronger case. Foregoing generous political ad revenue is not wise for any business – and especially so for a company like Twitter, which already operates on pretty thin margins compared to Facebook. Eliminating political advertising looks like bad business on its face, even if we were to give full credit to Dorsey’s worry that it could potentially harm the platform’s credibility among consumers.
From a social standpoint, Dorsey’s argument is on firmer footing, insofar as it is a principled stand against selling political ad space to actors who may use their magnified voices to sow misinformation and falsehoods. However, the decision to simply issue a blanket ban, rather than work to weed out bad actors, seems poorly considered to me from a social image standpoint. In my opinion, Zuckerberg again appears to be have a better approach.
Conclusion
Consumers and citizens should not have to merely learn to “live with” some level of misinformation, as Zuckerberg seems content to do. Yet, such an outcome is likely preferable to one that would effectively crowd out many of the valuable and minority voices that have emerged thanks to social media’s lowered cost of reaching voters and citizens.
On balance, I must conclude that, while far from ideal, Facebook’s “anything goes” stance is still preferable to Twitter’s decision to silence everything.
Disclosure: No positions.
Read more here:
- Charlie Munger: How to Beat an Efficient Market
- How to Be a Better Investor: Bulid Better Mental Models
- Twitter: Why Banning Political Ads is a Bad Idea
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