Press Release: FEARING FAKE NEWS FIX IS BEING FUMBLED BY FACEBOOK AND GOOGLE, SHAREHOLDERS TO VOTE ON GREATER DISCLOSURE OF RISKS & IMPACT
Investor proposals pressure Facebook and Alphabet Inc. to take additional steps; activist Arjuna Capital joined in comments by Illinois treasurer and Open MIC.
San Francisco - Facebook and Alphabet Inc. (the parent company of Google) have not done enough to curb the online epidemic of “fake news” and so concerned shareholders are pressing them to issue detailed reports. Upcoming votes on “fake news” shareholder proposals are set at Facebook Thursday (June 1) in Palo Alto, CA., and Alphabet on June 7 in Mountain View, CA., and will bring the issue into sharper focus. Investment advisor Arjuna Capital, in partnership with Baldwin Brothers, Inc., engaged both companies to evaluate the impact that fabricated content is having on their platforms and business.
The shareholder resolution (http://arjuna-capital.com/wp-content/uploads/2017/02/Fake-News-Proposal_Facebook.pdf), filed at Facebook on February 2, 2017, urges the company to issue a report reviewing the public policy issues associated with fake news (and related hate speech) enabled by the company. Arjuna Capital filed a similar resolution (http://arjuna-capital.com/wp-content/uploads/2017/02/Fake-news-Proposal_Googl.pdf) on December 29, 2016 with Alphabet.
Arjuna Capital was assisted in the effort by the nonprofit organization Open MIC, which issued a report last month recommending that the tech giants appoint ombudspersons to assess the impact of their content algorithms on the public interest. The Open MIC report is available here: http://fakenews.openmic.org
Natasha Lamb, managing partner at Arjuna Capital, said: “Fake news is not about spin or confirmation bias – Its about fabrication. And when fabrication is disseminated so easily at scale, the way we have seen through social media, it represents a threat to our democracy. If Facebook maintains a platform of confusion and distortion it will lose the trust of its users, in which case they will simply move on to the next thing. And that’s what concerns long-term investors. We need to know this is being handled responsibly over time. It will not be solved through a simple algorithm tweak or better user education—those are merely pieces of a larger puzzle. Right now, we think the issue is being fumbled.”
Michael Connor, executive director of Open MIC, a non-profit organization that works with investors on media and technology issues said: “Issues like fake news and hate speech aren’t going to go away any time soon - and Facebook’s responses to them thus far are perfect examples of too little, too late. The company needs to start reporting regularly – and in a consistent fashion - about the impact its policies and practices have on billions of Facebook users all around the globe.”
Supporting the Arjuna Capital resolution at Facebook today, Illinois State Treasurer Michael Frerichs said, “We need internet platforms to step up and acknowledge their corporate responsibilities. With more and more citizens being subjected to systematic deception and manipulation online, the proliferation of fake news represents a major threat to our democratic institutions. Furthermore, as an institutional investor and steward of public resources, I am very concerned that Facebook and Google’s role in the distribution of fake news could hurt shareholder value. We need to come together and develop solutions that protect public and business interests.”
Lamb added: “Investors need to understand the full scope of the issue. We expect annual reporting on public policy risk, impacts on free speech, and analysis on how fake news is impacting a cornerstone of our democracy—an informed electorate.”
Fake news was “both widely shared and heavily tilted in favor of Donald Trump” in the 2016 U.S. presidential election, according to a March 2017 NYU/Stanford study. Their database detected 115 pro-Trump fake stories shared on Facebook 30 million times, and 41 pro-Clinton fake stories shared 7.6 million times. Nearly a quarter of web content shared on Twitter by users in the battleground state of Michigan during the final days of last year’s U.S. election campaign was fake news, according to a University of Oxford study.
According to Pew, 64 percent of U.S. adults say fabricated news stories cause a great deal of confusion about the basic facts of current issues and events. The confusion cuts across political lines: 57 percent of Republicans say completely made-up news causes a great deal of confusion compared to 64 percent of Democrats.
Specifically, Arjuna Capital, et.al. asks Facebook and Alphabet Inc. to provide detailed information regarding the impact of current fake news flows and management systems on the democratic process, free speech, and a cohesive society, as well as reputational and operational risks from potential public policy developments.
Arjuna Capital is an investment firm focused on sustainable and impact investing. For more information, visit www.Arjuna-Capital.com.
CONTACT: Patrick Mitchell, (703) 276-3266 or pmitchell@hastingsgroup.com.