Meta has decided to relax content moderation on Facebook and Instagram, with Zuckerberg claiming that this move returns to the fundamentals of free speech, but investors seem unconvinced.
On Tuesday, the stock price of Meta Platforms (META.O) fell along with the Nasdaq Composite Index, indicating that traders are taking a Neutral stance on the company's decision to end its fact-checking efforts on its website.
The decision by Meta Platforms to reduce fact-checking and content moderation may fundamentally change the content on Facebook and Instagram in the coming months. This decision became a national news focus after CEO Mark Zuckerberg announced it on Tuesday morning. However, Wall Street investors reacted lukewarmly.
Meta's stock price fell by 2% on Tuesday, roughly consistent with the drop in the Nasdaq Composite Index. This indicates that traders hold a Neutral attitude toward this content decision.
In a video posted on Instagram, Zuckerberg stated, "It’s time to return to the foundations of free expression on Facebook and Instagram." He said, "Fact-checkers have become too politically biased, undermining the trust they have built, especially in the USA."
Former Wall Street Analyst and WPP advertising executive Brian Wieser stated that this change "could lead to more misinformation and misleading information," but he believes it will not have a financial impact on Meta's Business. "We expect that most brands may not significantly change their advertising spending because of this," Wieser wrote today in his 'Madison and Wall' newsletter.
Wieser told Barron's that brands would have to "put up with it," as another option might involve the company being called before congressional committees to explain their decisions.
"Marketers are basically being told to accept this," Wieser said.
Meta's advertising sales reached 153 billion dollars in the past 12 months, making it one of the largest advertising platforms in the world. The company has 3.3 billion users.
During the COVID-19 pandemic, Zuckerberg and Meta made different determinations regarding content moderation. "We have made some important content moderation decisions in recent weeks, including banning QAnon and Holocaust denial content, as well as refusing to spread anti-vaccine ad content," Zuckerberg told investors during the third quarter Earnings Reports conference call in October 2020.
"To be clear, this is not a shift in our fundamental principles or strong support for free expression. Rather, it reflects the increased risks of violence and unrest with the impending approval of vaccines, as well as the potential harm brought by vaccine misinformation. Even the strongest proponents of free expression do not believe that one should be allowed to shout 'fire' in a crowded theater, as they recognize that one's actions or speech should not put people at immediate physical harm risk. Our policies also attempt to strike a balance between free expression and safety, and that is what we are doing."
