Twitter well positioned to fend off Trump challenge in court, experts say

Twitter may be taking a public beating from President Trump, but experts tell The Post that the social network is in a strong position to weather the storm.

Despite a Thursday executive order calling for more regulation on social media companies and a Friday tweet from the president that he wants to revoke Section 230 of the Communications Decency Act following Twitter’s decision to mask his tweets about Minnesota riots, shares of Twitter only finished the week down 4.9 percent.

It’s a sign, analysts say, that Wall Street views Trump’s bark as worse than his bite, at least when it comes to his ability to regulate social media.

“The executive order doesn’t have any legal teeth unless you get the FCC to move,” CFRA analyst John Freeman told The Post. “And I don’t think the FCC is going to move right now. I think everything is going to be kind of delayed until the dust clears after the election.”

Trump’s order directs federal agencies to look at whether they can place new regulations on tech giants like Twitter, Facebook and Google, which owns Youtube, saying that companies “like Twitter enjoy an unprecedented liability shield based on the theory that they are a neutral platform — which they are not.”

The order calls for new regulations under Section 230 of the Communications Decency Act, a 1996 landmark federal law that largely exempts online platforms from legal liability for material posted by their users, allowing them to be treated more like publishers.

Rolling back those regulations would expose the tech companies to more civil liability through lawsuits. But convincing courts to agree to the restrictions on big tech companies could face difficulties, experts said.

“The precedent says that these are things that have been allowed in the past,” Freeman said. “Twitter isn’t doing anything that the FCC and everyone else hasn’t blessed before.”

Indeed, legal experts say that Twitter would likely have a strong case to make in court if it was hauled in front of a judge for flagging the president’s tweets.

“If the government were in some way to try to penalize Twitter or restrict its moderation actions, then Twitter would have a very strong first amendment argument that that violates its own rights,” Katie Fallow, senior staff attorney with the Knight First Amendment Institute at Columbia University said in an interview.

“I think to the people who really know about this law, it is clear that its purpose was to say a website is not liable for the posts of other people,” she added. “The fact that a website does engage in moderation doesn’t mean that it somehow loses the protection of Section 230.”

And as far as Twitter’s business goes, the old adage that all press is good press may be proven out.

“This whole thing might just give Twitter more user engagement,” Freeman said. “As long as people are having that conversation on the platform, Twitter’s advertisers can target the people on the left with one ad and the people on the right with another.”

For now The Street is keep its eye on the Trump Administration’s actions, Wedbush analyst Dan Ives says, with the knowledge that increased regulation may “throw a major wrench into the business model.”

“Increased regulation might not just be from a content perspective,” Ives said. “It could be advertising, it could be competition, data.”

Freeman agreed, adding that in the event Trump’s wishes are carried out by government agencies, it could go well beyond his favorite social network.

“If this has teeth, I think it’s such a bigger issue that it’s not just Twitter,” Freeman said. “We’d need to go back to the valuations of both Google and Facebook.”

Twitter shares were trading up 3.4 percent to $32.02 Monday morning. Year-to-date, the stock is down 0.1 percent.

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