Weibo, the Free Market, and Censorship

Weibo, “China’s Twitter,” has begun offering shares on one of America’s free market stock exchanges. But unlike in the United States, where freedom of expression is protected, in China social media companies rely on censorship for their business model. Weibo’s regulatory disclosures reveal a company’s balancing act between censoring too much and too little.

An excerpt of the ProPublica report, in F&O’s Dispatches/Money section:

As of last week, investors can purchase shares of Weibo, sometimes called “China’s Twitter,” on NASDAQ. The company’s regulatory filing with the Securities and Exchange Commission reveals details not previously known about Weibo’s censorship apparatus…

Weibo, like all Internet publishers and providers in China, is prohibited from letting their users display content that is obscene, fraudulent, defamatory or otherwise illegal under Chinese laws. The content prohibitions also forbid material that “impairs the national dignity of China,” “is reactionary,” “superstitious,” or “socially destabilizing.”

As required under SEC regulations, the company must list for investors potential risks that might affect its share price. Weibo is up front about the risk the Chinese government’s regulation of content poses to its ability so succeed. “Failure to [censor] may subject us to liabilities and penalties and may even result in the temporary blockage or complete shutdown of our online operations.”

Click here for the full story, Weibo IPO Reveals a Company Struggling With Censorship. (Free public access.)