(Bloomberg) -- Twitter Inc. Chief Executive Officer Jack Dorsey tweeted Wednesday that the site will ban all political ads, delivering a jab to Facebook Inc., which has come under fire for the way it’s handled advertising by candidates.
“We believe political message reach should be earned, not bought,” Dorsey wrote on Twitter.
The decision, which doesn’t appear to represent a major financial sacrifice for Twitter, quickly drew reactions from politicians, including criticism from President Donald Trump’s campaign and praise from Joe Biden, a leading 2020 Democratic presidential candidate who has been targeted in ads by the Trump campaign.
Twitter’s action is likely to have little impact on the way campaigns are run, said Jessica Alter, the co-founder and chair for Tech for Campaigns, an organization that works with Democrats. Alter said candidates don’t view Twitter as a particularly important platform for advertising. “Twitter is for if you have extra money or if you want to get to pundits,” she said.
Twitter plans to publish a new political ads policy outlining the change in a few weeks, which will be enforced globally and go into effect Nov. 22.
Twitter shares fell as much as 4% to $28.63 in post-market trading in New York before paring the loss to about 1.9%. The stock had gained 3.9% this year through Wednesday.
Twitter said during an earnings call last week that political ads represented less than $3 million in revenue during the 2018 midterm elections. By contrast, Trump alone spent almost $5 million on Facebook advertising in the four weeks leading up to Oct. 19, according to an analysis by the media agency Bully Pulpit Interactive.
Overall, campaigns spent $950 million online in 2018, nearly four times what they shelled out during the 2014 midterms, according to Kantar Media, an analysis firm that specializes in election ads. Kantar projects that total online spending on political ads for 2019-2020 federal campaigns will touch $1.2 billion.
Twitter’s announcement came about an hour before Chief Executive Officer Mark Zuckerberg delivered an impassioned defense of Facebook’s policy of not fact-checking ads from politicians on the company’s earnings call Wednesday. He said the company has thought carefully about the issue and is taking a stance on principle, noting that political ads will make up just 0.5% of revenue next year.
“I expect that this is going to be a very tough year,” he said on the call. “We try to do what we think is right but we’re not going to get everything right.”
Zuckerberg has come under fire for his position because it means politicians can publish lies or misinformation on the social network and pay Facebook to spread those messages to voters. Trump’s campaign has already taken advantage of the policy by running recent ads claiming Democratic front-runner Joe Biden bribed Ukrainian officials -- claims that have been debunked. A similar ad campaign ran on Twitter.
“Twitter just walked away from hundreds of millions of dollars of potential revenue, a very dumb decision for their stockholders,” Trump’s re-election campaign manager Brad Parscale said in a statement. He also suggested the move was “yet another attempt to silence conservatives, since Twitter knows President Trump has the most sophisticated online program ever known.” Trump’s Twitter account has more than 66 million followers.
Biden’s campaign said it appreciated the move.
“When faced with a choice between ad dollars and the integrity of our democracy, it is encouraging that, for once, revenue did not win out,” Biden spokesman Bill Russo said in a statement.
Democratic presidential candidate Pete Buttigieg called Twitter’s decision “a bold step that reflects a sense of responsibility.” He told reporters in New Hampshire that if other social media giants, including Facebook, don’t take active steps to determine whether their advertisements cause harm, they should “question whether they should be in the business at all.”
Fellow Democratic presidential hopeful Elizabeth Warren has also called on Facebook to change its policy. She tried to prove her point earlier this month by taking out a series of ads claiming Zuckerberg had endorsed Trump for re-election, which wasn’t true.
The ad quickly disclosed the falsehood, using the correction to showcase that politicians can lie on the platform. It says that even though Zuckerberg hasn’t endorsed Trump, he has given the president “free rein to lie on his platform -- and then to pay Facebook gobs of money to push out their lies to American voters.”
The move was part of an escalating war of words between Zuckerberg and the Massachusetts senator, who has made her candidacy a referendum on corporate power and promised to break up the world’s largest social networking site.
Tech for Campaigns’ Alter said she doubted Twitter’s decision would significantly increase the pressure Facebook is feeling. But she argued that if Facebook or Alphabet Inc.’s Google did follow suit, it would mostly impact lesser-known candidates, who rely on advertising to introduce themselves to voters.
Zuckerberg gave a speech at Georgetown University in Washington earlier this month saying the social network doesn’t fact-check political advertisements because in his view, it’s not the place of technology companies to become arbiters of truth.
“People should be able to see for themselves what politicians are saying,” Zuckerberg said to an auditorium full of students at Georgetown University’s Gaston Hall in Washington Oct. 17.
That sparked a letter from hundreds of Facebook employees to company executives expressing concern that the rules run counter to the top-priority work the company has done to protect users from election manipulation.
Dorsey criticized Zuckerberg over the Georgetown speech last week, saying his emphasis on speech and expression missed the issues including “amplification,” citing “a major gap and flaw” in the Facebook chief’s argument.
The Twitter CEO continued on that line Wednesday in a subsequent tweet. “A final note. This isn’t about free expression,” Dorsey said. “This is about paying for reach. And paying to increase the reach of political speech has significant ramifications that today’s democratic infrastructure may not be prepared to handle. It’s worth stepping back in order to address.”
(Updates with comments from experts and politicians from third paragraph.)
--With assistance from Mark Niquette, Courtney Dentch, Joshua Brustein, Sarah Frier, Misyrlena Egkolfopoulou and Steven T. Dennis.
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