Capitol Riot Fallout for Social Media?
We think the effects are likely to be minimal for the companies we cover.
We expect responses to the Jan. 6 riot at the U.S. Capitol will have only a slight impact on the legal and political standing and operations of social media companies like Twitter (TWTR), Facebook (FB), Snap (SNAP), Pinterest (PINS), and Alphabet (GOOG)/(GOOGL). We do not believe the decisions to eliminate President Donald Trump’s personal accounts or moderate Trump-related content more aggressively will result in the repeal of or drastic changes to Section 230 of the Communications Decency Act, which offers immunity from liability for Internet content. Twitter has taken the biggest hit of these companies in terms of app download rankings. In our view, its decision to permanently delete Trump’s personal account will modestly affect the platform’s network effect. On the other hand, we think that with increasing content moderation, brand advertisers may view Twitter and Facebook apps in particular as safer to market on.
Google’s decision to no longer provide the Parler app through its Google Play app store appears to be in line with the company’s policies. However, the death of the Parler app due to Amazon’s decision to no longer host it on its cloud creates slight risk for Google’s cloud business as decentralization may become a topic of cloud conversations.
Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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