Facebook ads boycott causes losses of more than $7B a day

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Picture taken on May 12, 2012 in Paris shows an illustration made with figurines set up in front of Facebook's homepage. Facebook, already assured of becoming one of the most valuable US firms when it goes public later this month, now must convince investors in the next two weeks that it is worth all the hype. Top executives at the world's leading social network have kicked off their all-important road show on Wall Street -- an intense marketing drive ahead of the company's expected trading launch on the tech-heavy Nasdaq on May 18. AFP PHOTO/JOEL SAGET (Photo by Joël SAGET / AFP) (Photo credit should read JOEL SAGET/AFP/Getty Images)

More than 90 large companies’ decision to boycott Facebook ads over the amount of hate speech on the platform has caused the social media giant to erase roughly $56 billion from its market valuation and $7.2 billion from CEO Mark Zuckerberg’s net worth of $89.5 billion.

On Friday, Facebook’s stock dropped more than 8% and Twitter’s shares fell by 7% after Unilever, the European company behind brands such as Ben & Jerry’s, Lipton tea and Dove announced a new ad boycott on social media platforms through at least the end of the year.

The European company said it took the move to protest the amount of hate speech online. Unilever said the polarized atmosphere in the United States ahead of November’s presidential election placed responsibility on brands to act.

Later in the day, Coca-Cola also announced it joined the boycott for at least 30 days.

“There is no place for racism in the world and there is no place for racism on social media,” James Quincey, chairman and CEO of The Coca-Cola Company, said in a brief statement.

He said social media companies need to provide “greater accountability and transparency.”

American Honda said it would halt ads on Facebook in July, “choosing to stand with people united against hate and racism,” adding to a list that includes U.S. telecom giant Verizon and sporting goods makers Patagonia, North Face and REI.

Zuckerberg had previously refused to take action against Trump’s posts suggesting that mail-in ballots will lead to voter fraud, saying that people deserved to hear unfiltered statements from political leaders. Twitter, by contrast, slapped a “get the facts” label on them.

Until Friday, Trump’s posts with identical wording to those labeled on Twitter remained untouched on Facebook, sparking criticism from Trump’s opponents as well as current and former Facebook employees. Now, Facebook is all but certain to face off with the president the next time he posts something the company deems to be violating its rules.

However, after the boycott and subsequent losses on the stock market the social media giant was forced to announce new changes in its filtering policy.

Facebook said on Friday it would ban a “wider category of hateful content” in ads and add tags to posts that are “newsworthy” but violate platform rules – following the lead of Twitter, which has used such labels on tweets from Trump.

“We’re also expanding our policies to better protect immigrants, migrants, refugees and asylum seekers” from hateful ads, he continued.