All eyes will be on top officials from Twitter, Facebook and Alphabet Inc./Google when they testify this morning before a Senate Intelligence Committee—but these tech titans may feel even more heat from their shareholders when they are called to task about “fake news,” election interference, and hate speech.
This week, the latest shareholder resolution on the topic was filed at Twitter. Arjuna Capital lead-filed on Oct. 19, and the office of the Illinois State Treasurer is co-filing shareholder proposals at Facebook and Google, asking for in-depth reports about the controversies over their global content governance, including concerns both companies aided Russian interference. Baldwin Brothers Inc. is also co-filing the Facebook proposal, which expresses additional concerns over hate speech and violence propagated on its platform. These proposals follow “fake news” proposals put to a vote of shareholders by Arjuna Capital in June.
Arjuna announced a shareholder proposal on Tues. at Twitter, asking for reporting on global content governance, and management of issues including fake news, election interference, and hate speech.
Investors and content governance
The “content governance” proposals at Twitter, Facebook and Google all state that measures taken to date by the companies have been insufficient, Arjuna asserts. All three proposals focus on the substantial regulatory, legal and reputational risk these issues pose to long-term investor value.
Read the full text of the “fake news” shareholder proposal now before Facebook here, the Google proposal here, and the Twitter proposal here. The Twitter proposal is expected to go to a vote at Arjuna Capital’s annual meeting in May, and in June at Facebook and Twitter.
“The hearings are a welcome development. Shareholders have been beating the drum on this issue all year,” said Natasha Lamb, managing partner at Arjuna Capital, in a news release. “Congress inviting testimony just further illustrates the huge regulatory and legal risks Facebook, Google and Twitter face when they allow their platforms to be manipulated in ways that compromise our democracy. The rules of political engagement have changed far quicker than anyone could have imagined. Disinformation and hate speech can be propagated over the internet at lightning speed. 470 fake accounts and 3,000 advertisements were reportedly involved in the Russian interference controversy. While seemingly few, those ads reached 10 million people.”
Social media’s reactive—not proactive—stance
Lamb continued, “So far, social media companies are in a reactive, not proactive stance. As investors, we cannot allow Facebook, Google, and Twitter to become dumpster fires of disinformation and hate. Users will abandon the platforms as quickly as they joined them.”
“We need internet platforms to step up and acknowledge their corporate responsibilities. With more and more citizens subjected to systematic deception online, the growth of fake news and election interference represents a major threat to our democratic institutions,” said Illinois State Treasurer Michael Frerichs, in the release. “Furthermore, as an institutional investor, I am very concerned that the distribution of fake news will hurt shareholder value at companies like Facebook, Google and Twitter. We need to come together and develop solutions that protect public and business interests.”
Holding social giants accountable
Michael Connor, executive director of Open MIC, pointed to research by his organization earlier this year which recommended that the social media platforms take steps to regularly assess and report on the impact of their products and services. “Their failure to do that has hurt the companies a lot,” he said, according to the release. “Now is the time for them to recognize the ongoing risks and provide regular reporting and accountability for what happens on their platforms.”
Facebook general counsel Colin Stretch, Twitter general counsel Sean Edgett and Google general counsel Kent Walker will testify in front of the Senate Select Committee on Intelligence at 9:30 a.m. today (Nov. 1) regarding the extent of the companies’ involvement in Russia’s interference in the 2016 U.S. presidential election. At 2:00 p.m. on Wednesday, the same panel will testify before the House Intelligence Committee’s Russia Investigative Task Force.
While many news reports have reported a more comprehensive analysis of how Russian government-linked accounts were able to gain traction on the popular social media platforms and influence U.S. voters with so-called fake news, all three companies are still in the crosshairs of FBI special counsel Robert Mueller’s probe, and it remains to be seen how forthcoming the executives and lawyers will be with detailed information.
The “fake news” controversy undermines a core tenet of U.S. democracy—an informed electorate. A December 2016 Pew Research survey found 64 percent of Americans say fabricated news stories cause a great deal of confusion about basic facts of current issues and events. In a sample of 7 million tweets last November, Oxford University researchers found 203,591 from fake news sources versus 256,725 from credible outlets.