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The pandemic brought about a shift in how investments are discussed online and has increased the influence social media has on the market. Social media is playing a larger role in the way ordinary retail investors understand and interact with today’s markets. Whether with investments in cryptocurrencies, NFT projects, or traditional security exchanges, social media’s influence has grown drastically in all spaces. What became clear in 2021 with the WallStreetBets GameStop stock rally is that social media allows for investors to band together, learn from one another, and take advantage of markets in novel ways.

On May 23, 2022, the Eleventh Circuit upheld an injunction on parts of Florida’s controversial social media “censorship” law, S.B. 7072, in NetChoice, LLC v. Att’y Gen., Fla.  In a 67-page opinion, the three-judge panel held that large swaths of the law’s provisions were unconstitutional, finding that social media companies are private actors and government regulation of content-moderation policies “unconstitutionally burden[ed]” their First Amendment rights.

On April 5, 2022, the Canadian Heritage Minister, Pablo Rodriguez, tabled Bill C-18 (Online News Act): An Act respecting online communications platforms that make news content available to persons in Canada.  Bill C-18 requires digital media platforms (e.g., social media services, search engines) to compensate media outlets for news content made available on their platforms.  Under Bill C-18, news content is made available if a platform reproduces news content or facilitates access to news content in any way.

In June of 2021, Canada’s Parliament passed Bill C-10: An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts (Bill C-10). Bill C-10 was drafted in response to recommendations made by the Broadcasting and Telecommunications Legislative Review Panel suggesting reforms of Canada’s broadcasting system to account for digital media. Although Bill C-10 received its third reading, the Senate did not provide approval before Parliament’s dissolution following the 2021 snap election.

In February of this year, the Federal Government revived the contents of Bill C-10, by introducing Bill C-11: the Online Streaming Act (Bill C-11, or the Act).

In December 2021, our post Increased Likelihood of US Social Media Regulation discussed the rising momentum to reform Section 230 of the 1996 Communications Decency Act, which is often used to protect social media giants from liability for content posted on their platforms by third parties. Recently, U.S. Supreme Court Justice Clarence Thomas expressed displeasure over the lack of guidance surrounding Section 230’s scope and hinted that reform may be close.

In December 2021, our post “Increased likelihood of US social media regulation” discussed Facebook whistleblower Frances Haugen and her call to hold social media platforms accountable for the potentially dangerous content that appears on their sites.

In February 2022, Haugen once again flagged Facebook’s algorithms as potentially harmful, but this time Haugen was speaking outside of the United States, to the Australian Parliament’s Select Committee on Social Media and Online Safety (the “Committee”).

In December 2021, the Securities and Exchange Commission (“SEC”) announced that Nikola Corporation (“Nikola”) agreed to pay $125 million to settle charges that the company allegedly defrauded investors and misled them about its products, technical advancements, and commercial prospects. Nikola did not admit or deny the SEC’s findings.   Earlier that same year, the SEC filed against Nikola’s founder and former CEO, Trever R. Milton, for allegedly disseminating false and misleading information about Nikola’s products and technical accomplishments by communicating with investors through social media.

In November of 2021, the Board of Governors of the Federal Reserve (the “Fed”) issued its Federal Reserve Financial Stability Report, a biannual report focused on potential risks to the financial system.  In this issue, the Fed highlighted the role of social media and retail investors in equity market volatility.