- As you are aware, the entire world was focused on the unfolding drama surrounding the Twitter takeover bid by Elon Musk. We know how dramatic events played out when Musk intended to pull out from the deal and subsequently decided to come on board courtesy courts stepping in to ensure the deal passes muster. People in the know would agree that governments around the world are increasingly focusing on regulating social media platforms in line with the law of the land. Especially, several western and European countries are leaving no stone unturned in reigning in social medial platforms to fall in line with the rule of the law of the land. Regulations to make these technical behemoths adhere to the guidelines are underway.
PC: Rafki Fachrizal
- The Indian establishment too is making concerted efforts to curb the largely unhindered playfield enjoyed by social media platforms till now. Coming to the Twitter takeover by Musk, note that the maverick billionaire is left with a large debt, a business model heavily reliant on advertising, and will be facing regulatory constraints that are at odds with his self-professed philosophy of free speech absolutism. Governments around the world may not be game for such a philosophy after all. Mind you, the takeover also has come at a time when the US stock market has questioned Big Tech’s business model. After witnessing an unfettered drama resembling no less than a potboiler, Twitter must contend with the regulations coming along the way sooner than later.
- Let’s delve further to comprehend how tech behemoths have fared in recent times. The five bellwether technology stocks viz. Facebook, Amazon, Apple, Netflix, and Google have lost about $2.5 trillion in market value over the last year. An underlying reason for the beating many social media companies are taking is their advertising-driven business model is incompatible with a refusal to take responsibility for content hosted by the platforms. No wonder, it has led to conflict with regulators such as the ongoing case in India when Twitter took the Government of India to court over orders to take down some tweets. The government of India recently and correctly brought in new rules that mandate a higher level of responsibility on companies on their content.
PC: John Navin
- It’s no secret that Musk reportedly wants to change a business model that draws about 90% of revenue from advertising to one where subscriptions form an important share. This won’t change fundamentals because, globally, regulatory tolerance for the social media business model that makes money by refusing to take responsibility for the content is drawing to a close. GOI’s new rules have been preceded by and will be followed by similar rules in other markets like the EU and UK. Of course, it hardly helps that Musk himself has had run-ins with different regulators or that his relationship with an authoritarian Chinese government has triggered speculation. In conclusion, the days of ignoring the social consequences of the business model are over.
