The micro-blogging site Twitter’s attempts to influence domestic politics in several countries including India and Nigeria, and the determined hard-hitting response by the respective governments have turned out to be a costly affair for the social media giant Twitter, reports Business Today.
Twitter’s war with sovereign nations has hit the company financially as shares of the micro-blogging site have taken a hit amid the tussle with the Indian government over the new IT rules. The cn onflicts with elected governments have affected the value of Twitter’s stocks by as much as 25 per cent at the NYSE.
Twitter lost its market cap ever since it picked up a fight with the Indian government.
The shares of Twitter closed at $43.48 on November 13 last year when the Indian government first sent a notice to Twitter for wrongly showing Leh as part of Jammu & Kashmir instead of the Union Territory of Ladakh. The deliberate act of Twitter to challenge India’s sovereignty over Leh had caused massive outrage, leading to social media users demanding a ban on Twitter.
Following the outrage, the shares of Twitter took a hit and the market cap of the firm in that session came to $34.58 billion.
However, the stock continued to rally upwards and reached $54.58 on February 3, 2021. The Modi government sent a notice to Twitter on the same day requesting to remove anti-India accounts that were inciting violence on the platform.
However, the micro-blogging site, which has a history of promoting such anti-India contents and on the contrary censuring nationalist contents, had decided to turn a blind eye to the Indian government request. Following that, the Indian government had sent a notice warning the social media company to suspend the anti-India accounts on the platform.
The market cap of Twitter took a slight hit as Twitter’s value stood at $43.45 billion during the session.
On February 8 this year, the Ministry of Electronics and Information technology sent a fresh directive to Twitter to remove over 1,000 accounts flagged by security agencies as those of Khalistan sympathisers or backed by Pakistan amid the ongoing farmer protests. However, Twitter once again ignored Indian government requests. In fact, the government of India was left frustrated after it found out that Twitter CEO Jack Dorsey promoted tweets that supported such contents put out by celebrities.
Strangely, the Twitter stock rose on that day to $58.20 on NYSE. The Market cap of the firm reached $46.33 billion.
A few weeks later, the stock even went on to hit a 52 week high of $80.75 on February 26, 2021. The stock had rallied 133.17% in the last year. On February 26 last year, the share stood at $34.63. The market cap of Twitter rose to $61.51 billion in the same session.
Interference into India’s domestic affairs has cost Twitter
Then began Twitter’s interference into India’s domestic affairs, in which the micro-blogging site took an active interest in promoting content specific to a particular ideology and censured nationalist contents. In the name of fighting fake news, the micro-blogging site marked tweets put out by nationalist accounts, BJP leaders and even government accounts as ‘manipulated media’, angering the ruling government.
Strangely, the ‘manipulated media’ tag was just limited to nationalist accounts as Twitter did not tag any accounts that espoused left-wing leanings and the accounts associated with the Congress ecosystem, even as such accounts propagated lies openly. The sinister designs of Twitter created a massive uproar in the country with social media users accusing Twitter of interfering in India’s political affairs.
Later that month, the government of India enforce the new IT rules. As usual, Twitter did not comply with the rules initially, however, asked for more time to follow the Indian laws. The tug-of-war with the Indian government had a bearing on its stocks as it hit a low of $50.11 on May 13.
The introduction of new IT rules to bring transparency in the operations of the social media platforms can be cited as a major factor for the crash in the stock.
On June 5, the Indian government sent a final notice to Twitter to comply with the new IT rules. Issuing “one last notice” to the micro-blogging site, the Centre warned of “resultant consequences” if it fails to comply with the new norms amid an escalating standoff with Twitter.
However, the Twitter once again failed to comply with the rules. Hence, the Indian government has promptly withdrew its intermediary status for not complying with the new Information Technology Rules, which came into force on May 26.
The loss of intermediary status meant that its top executives, including the country managing director, may now face police questioning and criminal liability under IPC over “unlawful” and “inflammatory” content posted on the platform by any user. The legal immunity that was provided to Twitter over content moderation in the country is officially over now.
The Indian government is reportedly unhappy with the brazenness of the social media company, which have been continuously evading compliance with Indian rules. The government believes that repeated reminders and even the temporary relaxation that was extended to social media giant as a “goodwill gesture” has not yielded results.
In addition to the non-compliance, the Uttar Pradesh Government has initiated action against Twitter India for failing to take down tweets that spread misinformation about a crime in the state. An FIR has been lodged against the social media platform in connection with the Loni incident after Twitter failed to flag the fake news put out by alleged fact-checkers.
On June 16, the day when Twitter lost its intermediary status in India after failing to comply with the Indian laws, Twitter’s stock closed at $59.93, down 0.50% on NYSE. The market cap of the firm fell $0.43 billion to $47.64 against the market cap of $48.07 billion in the previous session.
On Thursday, June 17, the stock stood at $59.93, a decline of 25.78% after touching a 52-week high of $80.75 on February 26. Since February 26, the firm has lost $13.87 billion or 22.54% in market cap till now.
It is clearly visible that the micro-blogging site is losing the battle it started against the Indian government, both in terms of politically and financially. One can only hope that Twitter awakes from its deep slumber and does a course correction soon.