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Social Media Censorship: A Growing Risk to Tech Stocks

Written by Jason Stutman
Posted August 12, 2018

The world’s most prominent tech companies caused a stir this week in a coordinated effort to ban conspiracy theorist Alex Jones and his InfoWars media platform from their websites.

Apple, Facebook, YouTube, Pinterest, Spotify, and a number of other major internet distributors have essentially banished Jones from what can be considered the most valuable real estate on the internet.

The concurrent decisions to remove Jones have sparked a fiery debate over free speech and corporate censorship, but the implications on social media companies and their investors have been widely overlooked. Unrealized by the broader market, political censorship may pose a legitimate risk to tech stocks (social media giants in particular) if they aren’t careful.

We can start with a few basic ideas most reasonable people will agree on:

To begin, Alex Jones has a right to say whatever he wants in a public forum, short of directly inciting specific acts of violence. This right is guaranteed to him by the Constitution of the United States of America, no matter how vile or unsubstantiated his speech may be. This is a legal precedent that has been upheld by the judicial branch since Brandenburg v. Ohio was decided in 1969.

There is a common rebuttal to this assertion that “you can’t yell fire in a crowded theater,” but you only ever hear this from folks who have a paper-thin understanding of constitutional law. The analogy stems from a not only outdated Supreme Court decision (Schenck v. U.S.) that was overturned over 40 years ago, but also one that was used to send peaceful anti-war activists to prison during WWI (an odious ruling to say the least).

That said, this is not actually a free speech issue, as many will contend. Alex Jones does not have a right to post on Facebook, Apple, Twitter, or any other private platform if those entities choose to censor him. The Constitution does not guarantee you a column in your local newspaper nor a space at any private podium. The same premise applies to your presence on social media platforms.

Of course, there’s a big difference between could and should, which is where the debate over the InfoWars banishment turns subjective.

On one hand, Alex Jones is notorious for spinning wild conspiracy theories with little to no factual support. Many consider InfoWars to be a net negative in terms of public discourse and a dividing rather than unifying media entity. No doubt, there’s a strong case to be made there if you take the media outlet literally.

On the other hand, corporate tech conglomerates drawing lines between truth and fiction or hate speech and regular speech is ominously dystopian. Many fear that the removal of Jones is indicative of a slippery slope, where “thought crimes” or “wrong think” will be increasingly cast aside by mob rule.

The concern for tech and social media companies isn’t just censorship, though, but politically targeted censorship. While there is no single analogue to Jones on the left, there are numerous figureheads and media outlets opposite of InfoWars that spew what constitute conspiracy theories and “hate speech” of their own.

It’s well documented that social media giants have done little to curb this fringe content from the left (see Farrakhan) while cracking the whip hard on the right. While these companies certainly have every legal right to do this, it’s a pattern that’s brewing political discord and even calls from conservatives to abandon the platforms.

Much of this bias stems from the political makeup of today’s tech companies, whose employees lean heavily to the left. We all know the story of James Damore, who prominently exposed “Google’s Ideological Echo Chamber,” but that wasn’t a one-off incident.

As one ex-Facebook news curator confessed in a Digiday interview:

Ninety percent of the team identified as liberal, including the copy editors, who essentially had the final approval on topics. If a source came up that may have been less credible to a liberal reviewer — like Breitbart or another publication like that — it would require more extensive secondary sourcing. However, if there was an article that came from a more liberal-slanted publication, it was essentially given less critique and was a more viable topic from the get-go.

The above excerpt, alongside a growing list of accusations of bias in tech, highlights a widely unrealized risk to the industry. At what point, if any, do conservatives decide that enough is enough and that it’s time to hit the tech conglomerates in their wallets by going somewhere else?

While seemingly unlikely, such an exodus of conservatives from social media would be devastating for companies like Facebook (NASDAQ: FB) or Twitter (NYSE: TWTR) that rely entirely on their user base for ad revenue. It would also be damaging to companies such as Spotify and YouTube, were users to seek censored content offsite.

That’s exactly what happened this week, just days after the InfoWars banishment. On Wednesday, InfoWars was the number one overall “trending” app on the Google Play store and number three on Apple among news apps, up tens of thousands of downloads a day.

The sudden surge in users going directly through the InfoWars app is what’s known as the Streisand effect. When there’s an attempt to censor information, there can be the unintended consequence of publicizing it more widely than before.

Of course, the viewer base of InfoWars alone is negligible to the bottom lines of corporate giants like Facebook, but the sudden surge in downloads hints that social media companies may have a chink in their armor.

The fact is that users can go through other apps and services to see censored content if they really want to, and the more corporate giants try to censor, the more demand they create for alternative social media platforms and services.

Abandoning these social media “monopolies” won’t be something that comes easy to the masses, and it doesn’t seem likely to happen anytime soon, but as we’ve already seen with services like MySpace and Friendster, these platforms can be more fickle than we may initially think.

If tech conglomerates continue to make conservatives feel targeted and ostracized, there may eventually be a breaking point. When and where that may be is unclear, but the risk should be considered nonetheless.

Until next time,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and Topline Trader. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.

Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.

Outside the office Jason is a lover of science fiction and the outdoors. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.

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