At the same time Facebook Inc. has attracted widespread public attention related to its Cambridge Analytica data breach scandal – and a subsequent dramatic decline in market value - a report by Institutional Shareholder Services (ISS) concluded that “Facebook is far from the only company in the Technology Sector to have issues concerning data privacy” and many companies “face the same risks as Facebook concerning data security concerns, as these problems are inherent to the business.”

The financial risks of fines and regulation by governments, lost advertising revenue, and a soured corporate reputation may impact investment returns. Additionally, users may leave the social media platform if they feel that Twitter’s content lacks integrity.

The Company must confront new challenges presented by the European Union’s General Data Protection Regulation (GDPR), which becomes effective May 25, 2018. The GDPR permits users to opt-out of Twitter’s targeted advertising, which could reduce advertising revenue for the Company. In addition, violating GDPR mandates could subject the Company to fines of up to 4 percent of annual revenues.

In the United States, a majority of Americans say tougher government regulations are needed to rein in the power of Twitter and other social media companies, according to a CBS News/YouGov poll released April 10, 2018.³

The controversies surrounding Twitter constitute a significant public policy issue:

During a Congressional hearing in October 2017, the Company acknowledged its role in enabling Russia’s influence on the 2016 US presidential campaign. Twitter’s acting general counsel Sean Edgett admitted that the platform had been greatly abused “to attempt state-sponsored manipulation of elections.”⁶ Further, in an update report in January 2018, the Company revealed that the manipulation during the 2016 US presidential election was far more serious than initially reported.⁷ This raises critical concerns about the robustness of Twitter’s content governance approach and accountability to investors.

The Company has also been under fire in recent years for inadequate responses to terrorist-related content. In 2016, Twitter was sued by a widow whose husband was killed in Jordan. The woman claimed that Twitter gave Islamic State “unfettered ability” to thrive.⁸ One year later, the Company was sued by relatives of the victims of the 2015 San Bernardino attack for allowing the Islamic State to flourish on the platform.⁹ In addition to attracting extensive media exposure and public attention, these high-profile cases pushed the US government to launch a task force fighting against extremist groups online activities.¹⁰  In August 2016, the UK parliament cited Twitter, together with several other social media giants, for “consciously failing” to tackle terrorism content. The Parliament said these platforms had become “the vehicle of choice in spreading propaganda and the recruiting platforms for terrorism.”¹¹

Twitter continues to have a mixed track record of protecting users from election interference, fake news, hate speech, sexual harassment, privacy breaches, and violence.

In a tweet on March 1, 2018, CEO Jack Dorsey acknowledged that previously Twitter “didn’t fully predict or understand the real-world negative consequences” of its services.¹² Mr. Dorsey further admitted that the Company had “witnessed abuse, harassment, troll armies, manipulation through bots and human-coordination, misinformation campaigns, and increasingly divisive echo chambers” and its “inability to address it fast enough.”¹³ On the same day, the Company launched “Twitter Health Metrics Proposal Submission” to seek the public’s help to develop a system of metrics to measure Twitter’s “health.”¹⁴ Recode, an influential trade publication, observed: “The company is now asking an important question: What role do we play in the health of our users? It’s a question Twitter might not want the answer to.”¹⁵

In the era of #MeToo, Twitter has not adequately addressed the unfortunate role of social media in perpetuating sexual harassment. One in five women ages 18 to 29 is sexually harassed online according to Pew Research Center, 83% of whom believe it is a major problem.  Following a women’s boycott in October 2017, the company made changes to Twitter’s policy regarding hateful content, including sexual harassment on the platform. Despite this, CEO Jack Dorsey noted, “we’re still not doing enough.”

According to the 2018 Corporate Accountability Index, compiled by Ranking Digital Rights, “Twitter ranked fifth out of 12 internet and mobile ecosystem companies, disclosing less about its policies affecting privacy than most of its U.S. peers…Twitter disclosed less than Google, Microsoft, Apple, and Oath about policies affecting users’ privacy, but more than Facebook.”¹⁶

Twitter’s content-related policies¹⁷ do not substantively address enforcement of Twitter’s content rules. Although the Company and its CEO have repeatedly emphasized the importance of enforcement¹⁸ and the Company’s policies have mapped how enforcement will be imposed,¹⁹ the Company does not systematically publicly report on the success (or result) of its enforcement efforts.²⁰ And the public is still suspicious of whether Twitter will enforce policies consistently.²¹ The Company has at times responded vaguely to questions on this front, admitting its awareness of enforcement problems. In the Company’s official blog posted on December 18, 2017, it states, “[i]n our efforts to be more aggressive here, we may make some mistakes and are working on a robust appeals process. We’ll evaluate and iterate on these changes in the coming days and weeks, and will keep you posted on progress along the way.”²² The Company did provide updated reports afterwards,²³ but an efficient and complete evaluation cannot be fulfilled without a systematic and objective report mechanism which could regularly disclose to the public how the Company has performed its enforcement promise.