Truth Social: Unethical Financial Business Decisions (2021-2022)
ABSTRACT
Truths Social is newly developed social media platform by our very own former president, Donald Trump. Donald Trump created this social media app to circumvent his ban by tech giants such as Twitter for inciting and encouraging violence on January 6th which led to the riots of the capital. As a new uncensored alternative to Twitter and Facebook, this company already faces legal concerns following unethical business practices. This company has reportedly broken securities laws with the SEC as well as whistleblowing accusations. This media company also faces allegations of not paying its host company for its services. Despite this company’s rough start, this right-wing social media platform is still more popular than most.
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| Donald Trump's First Post |
Ethical theories would be used analyze Truth Social’s actions as it becomes a new rising social media platform. Individualists theorize that the only goal of business is to profit so the only obligation that the person has is to maximize profit for the owner or the stockholders within the law. An individualist would not approve of Devin Nunes actions acting as CEO of this company. They would hold this individual responsible for making profits outside the boundaries of the law. Utilitarian’s require that people maximize happiness in themselves as well as others. Individuals say they were happy for having an uncensored alternative so they can speak there mind, but even then there are reports of Truth Social suppressing content. Kantians on the other hand analyze individuals ethically on a whole other platform. Kantians judge individuals based on there actions, and what motivations fall behind each one. A Kantian would assess Co-founder Andy Litinsky in a different light. Andy Litinsky would be frowned upon for firing an individual for refusing to hand over some of his shares to the former First Lady, Melania Trump. As far as Virtue Theory is being applied it would cite moments of greed, disrespect, and selfishness.
Company Background
Truth Social, a social media platform based out of Florida, was created by Trump Media & Technology to circumvent Donald Trump’s ban by tech giants. TRUTH Social bases its platform from Mastodon which has a unique set up similar to Twitter. Mastodon mandates that anyone who uses its code make modifications publicly available. Furthermore, TRUTH Social appeared to have violated those terms by building on Mastodon by keeping its work quiet. Last October, the code’s creator demanded TRUTH to comply with the terms of the open-source license. In February 2022, Trump made the platforms first post. During the first week, the app was installed 872,000 times. Although a month later the user signup fell to 60,000 per week. Weekly visits fell form 6 million to 2 million during the same time frame.
Trump Media and Technology Group in April 2022 announced Truth Social would be moving to Rumble's cloud platform and announced they would be performing infrastructure upgrades to increase the platform's performance. The Truth Social service was originally hosted RightForge, a company aimed at providing internet hosting for conservative causes Shortly after moving platform services, RightForge claims that Truth Social owes them 1.6 million and was threatening to take legal action against them. These financial problems eventually lead to rising suspicions within the company and catch the attention of federal regulators from the SEC in June 2022. Trump Media and Technology Group, has its hopes pinned on a deal announced a year ago with Digital World Acquisition, a special purpose acquisition company that raised $300 million in an initial public offering of stock. The company later secured commitments from three dozen hedge funds to provide an additional $1 billion in financing upon the completion of the merger. Investigations by federal prosecutors and securities regulators could force Digital World to liquidate itself in early December and return to shareholders the money raised in its IPO, derailing the merger. Digital World has struggled to get its shareholders to approve a measure to complete the merger with Trump Media.
Case Controversy
Truth Social faces many ethical problems across the board as a social media company. This social media platform created by Trump Media & Technology Group was intended to be a platform where anyone can peacefully speak their mind and not have to worry about having their content suppressed for any reason. On the other hand, there are reports of users having there content banned and there personal profiles deleted. Stew Peters, a right wing media personality, claims that his very own post has been censored as well. Peters mentions "I'm ALREADY being censored on Truth Social, …Free Speech isn't free”(Binder 15). Peter’s feels that even a platform that preaches free speech, it will never be free. Even though what Peters posted on Truth Social may be considered violent, it is still not relevant to the matter at hand. Those who use the social media as well as Trump’s supporters use this very platform as a way to escape.
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| Andy Litinsky, Former Employee of Truth Social |
This company is also undergoing investigations for unethical legal practices in the workplace. As of August 2022, a whistleblower submission was made by Will Wilkerson, the senior vice president of operations. He made his submission to the securities and exchange commission with original source information of alleged federal securities law violations, detailing fraudulent misrepresentations in violation of federal securities laws. He backed his complaint with an abundance of emails, documents, messages and audio recordings which detail a pattern of infighting, technical incompetence, and power struggles inside Trump Media since
its launch last year. Among the emails is an exchange between Wilkerson and fellow co-founder Andy Litinsky, who was allegedly fired as payback for refusing to hand over some of his shares, worth millions of dollars, to former first lady Melania Trump. Trump had already been given 90% of the company’s shares in exchange for the use of his name and some minor involvement.
This problem stems back to when Litinsky was a former competitor on trump’s NBC reality show, The Apprentice. He reports that trump at that time spent two months demanding he give the ex-First Lady equity. Latinsky says “As I have informed [President Trump] several times, I have earned that equity, and also 'gifting' equity to Melania Trump would be a taxable event of which I can't afford to pay the taxes” (Lepore 10).
This company is also put under the spotlight for its Data Privacy policy. Trump Media and Technology group has mentioned that they will be making routine data collections about the user. The type of data that they will be collecting is that of the users browsing history, contact information and any pictures or videos they post. The other information they will be gathering in the data collection also includes “non-identifiable data”. This data analyzes the usage patterns and the personalization of the users. Nonetheless, this could only mean one thing. The former president will use this position not only to learn about users’ opinions and behaviors, but also to target them with personalized political messaging.
Stakeholders
The future of Truth Social is solely based on the relationship and status they share with their stakeholders. The stakeholders within this case are the Trump Media & Technology Group, Digital World Acquisition, as well as the upper management. Many of the parties involved are effected in there own way. Trump Media & Technology group are affected simply for the fact that if this platform does not work out they may not get a shot at building a platform like this again. If the public does not agree with the terms as well as enjoy the environment that they create on this app, they will lose weekly visits and the use of this app will slowly decline. Another stakeholder within this is Digital World Acquisition. Data World Acquisition is essentially a blank check company looking to make Trump Media & Technology a publicly traded company. If there are issues with senior management and financials, this company is not going to want to partner with a problematic company. The other Stakeholder within this company are the upper management. If individuals see that there is no fair treatment within the work place as well as see that there own financials will be controlled there is going to be no one willing to work in an environment as such.
Individualism
A way individualism can be analyzed is through the eyes of Milton Freedman. Milton Friedman expresses that the only goal of business is to profit so the only obligation that the person has is to maximize profit for the owner or the stockholders within the law. Individualists would say to an extent that the company was in there right to maximize there profits by merging with Digital World Acquisition to become a publicly traded company. People would be able to invest in there social media platform and make it bigger than they possibly thought.
Individualists would also question whether Truth Social was maximizing profits within the law. These companies have initially raised $300 million in an initial public offering of stock. The company later secured commitments from three dozen hedge funds to provide an additional $1 billion in financing upon the completion of the merger between the companies. According to the New York Times, “The S.E.C. investigation has focused on whether there were serious discussions between the leadership of Digital World and Trump Media before the SPAC went public in September and why those talks were not disclosed in regulatory filings” (Goldstein 8). We may not know for sure what was discussed behind closed doors, but if there was anything important discussed they should have been incorporated in fillings made public to the community. This discussion could potentially break securities laws which in the eyes of individualists would be unjust
Utilitarianism
From a Utilitarian approach, we seek to maximize our happiness and the happiness of other people. We essentially be analyzing the happiness of stakeholders and those involved with Truth Social. The users of this application report having positive experiences. According to pew research, “Truth Social news consumers (58%) say the news they got there helped them better understand current events” (Forman-Katz and Stocking 6). Utilitarian’s would view this in a good light when users seem content with the news they are receiving from this platform. On the other hand, Utilitarian’s would question the user’s happiness when it comes to posting their own content online. Truth Social has limiting rules involving speech on the platform. The terms of service on this platform prohibit any tarnishing or disparage on their platform about any senior member who controls the platform.
This social media platform created by Trump Media & Technology Group was intended to be a platform where anyone can peacefully speak their mind and not have to worry about having their content suppressed for any reason. Under Utilitarian views this problem would not fulfil the user’s happiness The users specifically use this platform so that they can speak their mind and not have to worry about there content being suppressed.
Kantianism
The views of Kantianism were developed by Immanuel Kant and focuses on acting rationally and committing acts of good will. There are four components that make up Kantianism and they include acting rationally, allow and help people making rational decisions, respect people and their individual needs and differences, as well as be motivated to do what is right because it is right. One of the main formulations involved in Kantianism is the Categorical Imperative which tests whether actions are permissible or impermissible. This theory as well as formulation will be utilized in the case of the whistleblower accusations.
Will Wilkerson, senior vice president of operations, was sacked for speaking to the Washington post about a whistleblower complaint to the SEC. Wilkerson filed the SEC whistleblower complaint alleging that the company relied on “fraudulent misrepresentations … in violation of federal securities laws” (Iacurci and Calia 3). Kantians would believe the actions of this individual would be permissible. This individual believed what he was doing was right because it was the right thing to do since the company was conducting business on unlawful grounds. It was also the right thing to do considering a fellow peer of his was being pressured to hand over equity that was not rightfully his.
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| Donald Trump, Chairman of Truth Social |
From the other point of view Kantians would assess that Trump is not acting rationally. Trump is firing co-founders and employees that started off the company for not complying with what he wants. Trump terminated Andy Latinsky’s role in for refusing to hand over some of his shares, worth millions of dollars, to Melania Trump. Latinsky also mentions that trump is “retaliating against me by threatening to ‘blow up the company’ if his demands are not met”(Lakhani 6). Kantians would assess that Trump’s emotions and actions are not rational because he is not respecting the decisions of his works and is not respecting the needs and differences of his workers.
Virtue Theory
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| Devin Nunes, CEO of TMTG |
Virtue theory is a theory created by one of the great Greek philosophers, Aristotle. Virtue theory can be defined as the goal not to form virtues that mean we act ethically without thinking, but to form virtues that help us see the world clearly and make better judgments as a result. The four main virtues that this theory focuses on is courage, temperance, honesty, and justice.
Truth social violated the virtues of honesty and temperance in its time of becoming a new social media platform. During the time of SEC investigations, it has focused on whether there were serious discussions between the leadership of Digital World and Trump Media before the SPAC went public in September and why those talks were not disclosed in regular filings. In this case there is no projection of honesty of what is occurring in the company which should be made public to everyone if it is becoming a publicly traded.
The virtue of temperance was violated on two accounts. The first account that the virtue was violated was when Trump fired Will Wilkerson for talking to the Washington Post. Everyone has the right to free speech and speak their mind. This is similar to the platforms idea of being able to speak their mind clearly and not have to worry about being censored for what they say. These ideals are apparently not the same for the platform as it is in the workplace. The virtue was also broken when Trump threatened Andy Latinsky for not handing over his shares. He proceeded to threaten him by saying he will “blow up” the company. There is no restraint in Trumps action by threatening and forcing Andy’s hand to give over his shares.
Justified Ethics Evaluation
In my opinion, actions conducted by Truth Social were very unprofessional as well as unethical. These situations all around could have been handled much better. Leadership in the higher management failed by committing unethical acts that can harm there image as a new platform. Donald Trump along with Devin Nunes specifically had stunted there growth with bad leadership. The company, I thought had a shady way of conducting business. As a new company they fell in debt early by failing to make a payment on time and the receiving end had to threaten with legal. Also while trying to merge with the acquisition group they were conducting shady business by talking behind closed doors which should be made public for numerous reasons. The first reason being that they were getting funding from 3 dozen hedge funds and I ought to think they should know what they are getting into. Secondly, if they are becoming a public traded company they should have an image that portrays they are going to be confidently buying stock in.
Donald Trump also handled whistleblowing accusations poorly because of his unethical business decisions. He fired one of his co-founders for speaking out for unrightful termination. Andy Litinsky who was an employee of Truth Social was fired as payback by Donald Trump. He was terminated for refusing to hand over money that was his by right. Donald Trump is a rich business man as is, a few shares shouldn’t affect his rational thinking. Trump also threatened to “Blow up” the company and throw it away. That is down right selfish and is willing to throw away the enjoyment people get from using this platform.
Conclusion
Many social media company’s hold a greater standard when it comes to leadership and there decision making. On the hand Truth Social failed to do so. There operations and money allocation was very poor. They have also failed to keep there promise as a company of developing a free, uncensored environment. I feel as if they should create a new board with legal advisors that could steer them in a direction where they could becoming a promising stock in the stock exchange. I also feel as if Donald Trump should step away from this company and let a different CEO take over. They should also change there terms of service where they do not track personal information. This also ensures as way to protect peoples free speech by not giving up there identities.
REFERENCES
Binder, Matt. “Truth Social Already Censoring Content, Bans User Who Made Fun of Trump Media CEO.” Mashable, Mashable, 24 Feb. 2022, https://mashable.com/article/trump-truth-social-free-speech-bans.
Calia, Mike, and Greg Lacurci. “Trump Media Fired Executive Whistleblower after He Spoke to Washington Post, Shared Documents.” CNBC, CNBC, 15 Oct. 2022, https://www.cnbc.com/2022/10/15/trump-media-fired-whistleblower-after-he-spoke-to-washington-post.html.
Goldstein, Matthew. “Trump's Social Network Deal Is under Grand Jury Scrutiny.” The New York Times, The New York Times, 27 June 2022, https://www.nytimes.com/2022/06/27/business/trump-truth-social-federal-investigation.html.
Lakhani, Nina. “Whistleblower Trump Media Executive Says Firm Violated Federal Securities Laws.” The Guardian, Guardian News and Media, 16 Oct. 2022, https://www.theguardian.com/us-news/2022/oct/16/trump-media-truth-social-whistleblower-sec-complaint.
Lepore, Stephen. “Former Truth Social Exec Claims Co-Founder Lost Board Seat for Not Giving Shares to Melania Trump.” Daily Mail Online, Associated Newspapers, 16 Oct. 2022, https://www.dailymail.co.uk/news/article-11320297/Truth-social-executive-says-fired-refusing-Trumps-demand-transfer-shares-Melania.html.
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