(Reuters Breakingviews) - Jack Dorsey can’t win. On Tuesday the Twitter chief executive sanctioned a simple advisory to one of Donald Trump’s tweets, incurring the wrath of the U.S. president – who has vowed to make life tough for social media companies. The political spotlight is more uncomfortable for Dorsey than his rivals, because he must give greater weight to the interests of short-term investors, including activist fund Elliott Management.
Twitter slapped a fact-checking link on a Trump tweet when the president used his favorite online megaphone to claim that mail-in voting ballots are rife with fraud. The White House is now preparing to issue an executive order that calls for a review of legal protections social media enjoy, that let sites modify harmful content without being deemed legally liable for content they carry.
It may be more smoke than fire. Section 230 of the 1996 Communications Decency Act, which largely protects companies from lawsuits, has been a matter of fierce debate for years. Courts have been the arbiter and they’ve routinely sided with tech companies, including in recent U.S. Supreme Court cases. Trump can demand probes, or propose to change the law, but it would be up to lawmakers to actually do so. Still, Dorsey is a relative novice when it comes to being cast as a villain. He has been more savvy in Washington circles than his counterparts at Google-owner Alphabet and Facebook. The $26 billion Twitter ditched political advertising early and was more upfront with lawmakers. He also has more people to please. Unlike founders of Facebook and Alphabet, Dorsey doesn’t have a controlling stake in his company. Twitter only recently agreed on a turnaround plan with shareholder Elliott to increase revenue and get more money from its users. Dorsey and Elliott’s interests seem closely aligned, but if pulled into a political tweetstorm, they may diverge. A thorough cleanup of toxic content would make Twitter stronger, in the long term. Yet few investors really think long term in the way a founder would. In the meantime, ramping up the fact checking process, especially in a U.S. election year, is only going to bring more scrutiny and distract Dorsey when he’s trying to hit targets already made harder by the pandemic. Dorsey can’t please everyone, but he has little choice but to try.Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
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