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Social media ruling could ‘chill’ Biden admin efforts to limit misinformation

Published

12 months ago

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The Biden administration’s legal fight over social media content moderation could soon reach the Supreme Court, but any outcome in the case would have resounding implications for online speech.

An appeals court panel Friday found the Biden administration likely violated the First Amendment by pressuring social media companies to moderate specific content, ruling that federal agencies cannot “coerce” social media platforms to take down posts the government doesn’t like.

The Justice Department (DOJ) now has a week to decide whether to ask the Supreme Court to review the case, paving the way for a consequential legal fight over censorship to reach the high court.

But whether the Supreme Court takes up the case or not, its ultimate resolution has the potential to vastly reshape the longstanding relationship between the government and social media companies, particularly as a consequential election year nears.

“The thrust of this case — the goal of this case — is to stop what is a pretty extensive and established practice of government actors and platforms communicating about certain areas of content moderation,” said Evelyn Douek, a law professor at Stanford University who specializes in private and public regulation of online speech.

“An unclear rule has the potential to chill a wide variety of ongoing, established practices,” she added.

At the heart of this case were attempts by the Biden administration to police online misinformation about COVID-19, with doubts about vaccines running rampant.

At one point in 2021, amid the administration’s vaccine distribution campaign, President Biden himself lashed out at social media companies, taking particular aim at Facebook, which he said was “killing people” for allowing misinformation about vaccines to spread unchecked.

Two Republican attorneys general brought the case last year in a challenge to the Biden administration’s efforts to curb false information online. They called the efforts a “campaign of censorship” and said federal officials “coordinated and colluded with social-media platforms to identify disfavored speakers, viewpoints, and content.”

In July, a Louisiana-based federal judge sided with the attorneys general, barring Biden administration officials from contacting social media companies relating to “any manner the removal, deletion, suppression, or reduction of content containing protected free speech posted on social-media platforms.”

Officials from the Department of Health and Human Services, the Centers for Disease Control and Prevention, the DOJ, the State Department and the FBI were told to cut those communications with the companies.

While that decision was “a bit all over the place,” the appeals court’s decision Friday “really sharply narrowed” the injunction on the administration’s talk with social media companies, according to David Greene, civil liberties director at the Electronic Frontier Foundation.

The appeals court panel emphasized the “limited reach” of its ruling in the order, noting that officials from the National Institute of Allergy and Infectious Diseases (NIAID), Cybersecurity and Infrastructure Security Agency (CISA) and State Department did not cross the line into coercing the social media companies, unlike other government agencies.

“Indeed, many of those officials were permissibly exercising government speech, ‘carrying out [their] responsibilities,’ or merely ‘engaging in [a] legitimate action,’” the panel wrote.

But despite the appeals court’s narrowing of the district judge’s original order, there’s “a lot to be gained” from getting greater clarity from the Supreme Court on what is and is not permissible, Douek said.

“It feels like there’s kind of an anchoring effect going on here, where the district court ruling was so crazily broad that when the court of appeals comes in and narrows it, it maybe looks sensible by comparison,” Douek said. “But it’s still pretty broad, in a lot of ways.”

That broadness leaves plenty of room for the Supreme Court to weigh in on what government actors can and cannot do when communicating with social media companies about content moderation and other issues, she added.

Determining how the conservative-majority Supreme Court might weigh in — if it decides to hear the case at all — is iffy for the Biden administration, which last term saw the high court side with it in some cases and rule against it in others.

The appeals court’s order will take effect in a week, unless the government seeks intervention from the Supreme Court. In court filings, the DOJ indicated that the appeals court’s injunction would “inform any request for relief the government may file in the Supreme Court.” The DOJ declined to comment on whether it intends to petition the high court.

If the DOJ does ask the Supreme Court to review its case, it could delay the start of a future trial while also offering insight into the high court’s perception of issues of online speech, Greene said.

“It might give them some preview into how the justices are thinking about the case,” he said. “There might be some strategic advantage to doing that.”

Should the Biden administration not petition the high court — or if the Supreme Court declines to hear it — the case will likely head to trial, a goal of Louisiana Attorney General Jeff Landry, one of the case’s original plaintiffs.

“We are determined to bring this to trial so that the victims are vindicated and we can prevent this gross abuse of power from ever happening again, especially in a time of crisis when information is most important,” Landry said.

Two other cases with petitions pending before the Supreme Court could edge out a Biden DOJ petition, if the high court justices think the former resolve the latter.

Cases in Texas and Florida questioning whether the U.S. Constitution allows the states to stop social media companies from removing posts over their viewpoints raise “overlapping issues” with the case against the Biden administration, Greene said.

When asked by the Supreme Court justices, the administration urged the high court to hear the two cases and rule in favor of the social media companies.

 

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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3 weeks ago

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August 23, 2024

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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3 weeks ago

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August 23, 2024

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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3 weeks ago

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August 20, 2024

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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