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#SocialStocks: Tennessee and New York push legislation to further protect kids

Posted June 27, 2024 at 10:30 am
Andrew Perez
The Fly

Supreme Court sides with Biden on social media posts, Apple spurned Meta chatbot and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

SCOTUS WEIGHS IN: The Supreme Court ruled with the White House in a dispute with Republican-led states over how far the federal government’s reach can extend to combat “social media posts that may be controversial,” according to an AP report. “By a 6-3 vote, the justices threw out lower-court rulings that favored Louisiana, Missouri and other parties in their claims that officials in the Democratic administration leaned on the social media platforms to unconstitutionally squelch conservative points of view,” noted the AP.

FEDIVERSE: Meta Platforms (META) CEO Mark Zuckerberg disclosed on Tuesday that, “Starting today, people using Threads in 100+ countries can turn on sharing to the fediverse.” Meta elaborated with a blog entry out earlier, that said in part: ” A The fediverse is a global social network of interconnected servers that allows people to communicate across different platforms. Threads is Meta’s first app built to be compatible with the fediverse to help people join public conversations and find their community, no matter what server they use…So what does that mean? The fediverse allows you to communicate across different servers – imagine posting on Threads and having people see your post on Tumblr or Flipboard. A helpful analogy is e-mail. If you use Yahoo and your friend uses Gmail, you’re able to send emails to each other because both providers conform to the same protocol. Unlike email, your fediverse conversations and profile are public and can be shared across servers. Right now, most social networks don’t work that way. People on Reddit (RDDT) can’t follow people on Pinterest (PINS), for example….The fediverse changes that, enabling people to follow one another and communicate across different servers.”

GOOGLE CHATBOT: Alphabet’s (GOOG) Google has been working on a product for creating and conversing with customizable chatbots, which could be modeled on celebrities or entirely user-created, The Information’s Julia Hornstein and Jon Victor reported, citing two people with direct knowledge of the project. The chatbots would have similarities with online personalities from Meta and startup Character.AI, the authors noted.

DISINTEGRATION: Apple (AAPL) dismissed overtures by Meta to integrate the social media giant’s AI chatbot into iPhone devices months ago, Bloomberg’s Mark Gurman wrote, citing people with knowledge of the matter. The two tech companies are not currently in talks about using Meta’s Llama in an AI partnership and only held brief discussions in March, the author noted.

CHILD WELFARE: Tennessee Senator Marsha Blackburn said via X, the platform formerly called Twitter, on Saturday: “One of Meta’s executives warned in 2019 of the addictive impacts Instagram and Facebook have on teens. Yet, when he asked CEO Mark Zuckerberg for funding to fix these problems, his request was denied. To Meta, our kids are the product. This is why we need to pass KOSA.”

Separately, Governor Kathy Hochul signed legislation to combat addictive social media feeds and protect kids online. Legislation S.7694A/A.8148A establishes the Stop Addictive Feeds Exploitation, SAFE, For Kids Act to require social media companies to restrict addictive feeds on their platforms for users under 18. Legislation S.7695B/A.8149A enables the New York Child Data Protection Act to prohibit online sites from collecting, using, sharing or selling personal data of anyone under the age of 18, unless they receive informed consent or unless doing so is strictly necessary for the purpose of the website. “Young people across the nation are facing a mental health crisis fueled by addictive social media feeds – and New York is leading the way with a new model for addressing the crisis and protecting our kids,” Governor Hochul said. “By reining in addictive feeds and shielding kids’ personal data, we’ll provide a safer digital environment, give parents more peace of mind, and create a brighter future for young people across New York.” The Governor was joined at today’s bill signing by Attorney General Letitia James and bill sponsors State Senator Andrew Gounardes and State Assemblymember Nily Rozic, marking the culmination of a jointly led push to pass and sign this nation-leading legislation.

Lastly, Instagram regularly recommends sexual videos to accounts for teenagers that appear to be interested in racy content and will do so within minutes after logging in, Jeff Horwitz of The Wall Street Journal reported, citing tests done by the Journal and an academic researcher. The tests ran for over seven months and shows how the social-media service has continued to push adult-oriented content to minors.

MONEY, MONEY, MONEY MONEY: Trump Media (DJT) announced that it expects to receive more than $69.4M in proceeds from the cash exercise of warrants on June 20 and 21. Such cash exercise became available after the SEC declared effective the company’s registration statement on Form S-1 on June 18, 2024. If all warrants covered by the Registration Statement are exercised for cash, TMTG may receive up to an aggregate of approximately $247M in proceeds. Additionally, $40M of restricted cash on the company’s balance sheet will become unrestricted as a result of the Registration Statement becoming effective. These funds are in addition to the more than $200M in unrestricted cash held by the company as of June 18.

PICK YOUR BATTLES: The U.S. DOJ won’t pursue the FTC’s claim that TikTok misled U.S. consumers on data security in a forthcoming suit accusing TikTok of children’s privacy violations, Bloomberg’s Leah Nylen and Chris Strohm reported. According to people familiar with the matter, the Justice Department plans to drop one part of the FTC complaint alleging that TikTok deceived U.S. consumers by failing to inform them that Beijing-based employees of ByteDance would have access to their personal and financial information but will proceed with claims the company violated the Children’s Online Privacy Protection Act, which bars collecting data about children under the age of 13.

DISCRIMINATION AND SEXUAL HARRASMENT SETTLEMENT: Snapchat’s (SNAP) parent company agreed to a $15M settlement following a three-year investigation into allegations of discrimination and sexual harassment by its female employees, Lara Korte of Politico said. The probe was conducted by the California Civil Rights Department and found the company failed to treat female employees fairly between 2015 and 2022. State civil rights officials said women were discouraged from applying for promotions or lost promotions to less-qualified male colleagues, faced unwelcome sexual advances and harassment, and when employees spoke up, company leaders retaliated with negative performance reviews.

#SocialStocks: Tennessee and New York push legislation to further protect kids

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