NEW YORK • Critics of Facebook who have assailed the social network as failing to adequately police hateful and misleading content on its service have found a powerful ally: Unilever, one of the world's largest advertisers, said it would stop spending money with Facebook's properties this year.
The decision on Friday by the maker of major consumer goods, such as Dove soap, to follow other brands in an advertising boycott prompted a rare reaction from Facebook's investors. Shares plunged 8.3 per cent on the news, eliminating US$56 billion (S$78 billion) in market value. Facebook chief executive officer Mark Zuckerberg just became US$7.2 billion poorer.
Unilever's pledge applies immediate pressure on other big companies and presents a risk to Facebook's dominant business.
Later on Friday, Coca-Cola said it would pause ads on all social media platforms for at least 30 days, while Honda Motor's United States unit, Hershey and several smaller brands said they would join the boycott.
"There is no place for racism in the world and there is no place for racism on social media," Mr 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".
Mr Zuckerberg attempted to address advertiser concerns in a live question-and-answer session with employees on Friday, announcing a handful of minor changes to the company's ad and content policies. But his remarks did not go far enough for critics.
The Anti-Defamation League, among the collection of civil rights groups that organised the July ad boycott, called the changes announced by Mr Zuckerberg "small".
"We have been down this road before with Facebook," the group said in a statement. "They have made apologies in the past. They have taken meagre steps after each catastrophe where their platform played a part. But this has to end now."
The social network has been less aggressive than competitors Twitter and Snap in responding to what employees and advertisers say are harmful posts from US President Donald Trump, as well as incendiary content that goes viral.
Facebook accounts for about 23 per cent of the entire US digital advertising market, according to eMarketer. And it dominates social media with more than three billion users of all its properties.
Facebook has tried to quell the boycott behind the scenes, and has reached out to advertisers to push back on the narrative that it does not care about fighting hate and misinformation. In an e-mail to advertising partners, the company highlighted the software it uses to detect hate speech, which has improved over the years, and its efforts to circulate verified information around the elections with a new informational hub and a goal to register four million new voters.
During the Q&A with employees, Mr Zuckerberg went a step further. He said the company will put a link to the voting hub on all posts related to voting, and will also start marking posts that violate Facebook's rules, although the posts will remain up if they are newsworthy.
Those rules give Facebook cover to take action without making a decision on the nature of the content. For instance, several weeks ago when Mr Trump tweeted that mail-in voting would lead to fraud, Twitter labelled the post to fact-check it. Mr Zuckerberg left the same post alone on Facebook.
But now, if all voting-related posts have a context link on them, the CEO will not have to make controversial decisions about their accuracy. Facebook, which already prohibits advertising that discriminates, also sharpened those policies on Friday with a clause saying no ads will be allowed if they label another demographic as dangerous, or if they portray immigrants, migrant groups or refugees as inferior and worthy of disgust.
"There are no exceptions for politicians in any of the policies I'm announcing here today," he said.
BLOOMBERG, AGENCE FRANCE-PRESSE