By
Chimamanda U. Martha
April 12th, 2024
Facebook suffers from a massive boycott by large companies of its ad platforms. The reason for this boycott had to do with hate speech and misinformation currently on social media platforms.
Unilever NV (NYSE: UN), the multinational consumer goods company, decided to suspend its advertising on Facebook‘s (FB) platforms. It is going to pause investing in Facebook ad for the rest of the year. This move alongside other companies caused a massive drop of $56 billion in the market capitalization of the social media company.
As a result, Facebook CEO Mark Zuckerberg is said to lose $7 billion. Thus, Facebook Inc (NASDAQ: FB) stock was down by 8.32% at the closing of the markets on Friday. At the time of filing this report, in the Pre-market, Facebook (FB) stock price is at $208.45 (-3.53%).
Big Companies Pause Their Ad on Facebook
According to the Bloomberg Billionaires Index, Zuckerberg has dropped below luxury brand owner Bernard Arnault, who has now according to the index become the third richest person in the world. Sources say that a plethora of companies has decided to boycott Facebook’s (FB) ad machine. Such companies include Verizon Communications Inc (NYSE: VZ), PepsiCo Inc (NASDAQ: PEP) and, even Hershey Co (NYSE: HSY). Coca-Cola Co (NYSE: KO) from its side said that it would suspend advertising for one month. This comes after critics had indicated that Facebook had insufficiently regulated hate speech and fake news.
To be fair to Facebook Unilever had indicated that it would also suspend advertising for Twitter. This comes at a time when major brands are using the influence of their advertising dollars to cause social media platforms to weed out disinformation. This process hasn’t been fully complied with in recent times by social media platforms. It also comes at a time when the United States is in an election year. Companies are sensitive to the allegations of the undue interference of social media in the last election cycle. This has led to the companies doing their bit by using their influence.
Social Media Giant Changes Its Position
Mark Zuckerberg finally responded to the moves on Friday. He indicated that the social media network had enlarged the definition of what constitutes hate speech. If an ad labels a population as dangerous, then that ad contains hate speech. This is according to a clause that has been included by Facebook.
Mark Zuckerberg said in a post that Facebook leaves such notes up because “the public interest value outweighs the risk of harm”. He also said that speech from such politicians should be seen in “the same way that news outlets will report what a politician says”. He alluded to the fact that “we think people should generally be able to see it for themselves on our platforms”.
As a result, Mark underlined:
“We will soon start labeling some of the content we leave up because it is deemed newsworthy, so people can know when this is the case.”
He continued:
“We’ll allow people to share this content to condemn it, just like we do with other problematic content, because this is an important part of how we discuss what’s acceptable in our society — but we’ll add a prompt to tell people that the content they’re sharing may violate our policies.”
This approach may work well in some instances and it won’t in others. This is because of the content diversity that Facebook will have to wade through. As the ad boycott continues, it remains unclear how the wizard of Menlo Park and his team will sort these issues out. One thing is certain: unregulated free speech is biting into Facebook’s profits and it is biting hard.