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October 22, 2021

Trump takes on Big Tech with new social media platform, Truth Social

By MarketLine

Ex US president, Donald Trump, has announced the launch of a new social media platform he hopes will rival the likes of Facebook and Twitter.

Truth Social is a social media network designed to prevent the discrimination of political ideology. The website is being launched by Trump, who remains banned from Facebook until 2023 and from Twitter permanently, following his online posts which supported rioters who stormed the US Capitol after the 2020 US election.

Trump Truth Social will struggle to rival social media giants

However, the method in which Truth Social will differentiate itself from Facebook and Twitter remains unclear, with both rivals also insisting they to do not discriminate political ideology. Many believe Truth Social to be a platform which will allow Trump to post freely, without fear of being censored by Big Tech companies. Included in Truth Social’s terms and conditions, users are not allowed to ‘disparage, tarnish, or otherwise harm, in our opinion, us and/or the Site’.

In addition, the potential absence of sophisticated algorithms and dedicated teams of moderators could result in an abundance of potentially harmful misinformation being spread across the Truth Social platform.

Retail investors rally behind Truth Social, but it isn’t enough to challenge big tech

Trump Media & Technology Group, plans to fund Truth Social through a merger with special purpose acquisition company (SPAC), Digital World Acquisition Corp. Shares of Digital World Acquisition surged by more than 350% following the announcement, suggesting strong support for the media platform. The deal values the business at up to $1.7bn, although this depends on the performance of the stock price post-business combination.

Trump Media & Technology Group intends to use $293m from the Digital World Acquisition trust to scale up its business and develop strong and secure social networks and diverse media offerings. This investment is dwarfed by Facebook and twitters annual spend on improving and expanding its network. In 2020 Facebook invested $15.11bn in property and equipment including data centres, servers, office facilities, and network infrastructure.

Truth Social will require more funding and must establish a solid revenue model if it plans to rival existing social networks in terms of scale.

Social media reform is needed

Social media platforms have been heavily criticized for the facilitation of the spread of misinformation, privacy and data violations and their passive approach to hate speech and abusive online content. These issues were exacerbated during the pandemic, which accelerated the evolution of digital information sharing and the use of digital communication tools, as well as the sharing of misinformation.

Therefore, the arrival launch of Truth Social, expected in Q1 2022, is opportunistic and could persuade individuals who have a distrust in big tech companies to join alternative social media networks. Although to do this, Truth Social must demonstrate some sort of intention to tackle these issues.