Truth Social, Trump’s New Platform, Is Owned By … The Chinese?

News broke yesterday that former president Donald J. Trump is starting a new social network. Beyond the quotidian ridicule, especially around the fact that it’ll be called Truth Social (“like Pravda?” one commenter asked, only to be told that that was probably a bit of a stretch), Twitter sleuths were, of course, all over it. One Twitterer posted an image ostensibly indicating that he had been able to register under the handle “DonaldTrump”– even though the platform wasn’t supposed to be live yet. Other observers pointed out that the terms of service indicated that you could have your account terminated for, you know, saying you didn’t like the platform, or whatever. (Of course, most terms of service are extremely broad and allow companies to do basically anything allowable by law– and a bunch of things probably not allowable by law).

But one commenter linked to a Bloomberg page indicating that Digital World Acquisition Corp. is headed up by one Patrick Francis Orlando, who also heads up a company called China Yunhong Holdings, Ltd., also known as Yunhong International. While legally incorporated in the Cayman Islands (where else?), itself set up as a SPAC, the company’s headquarters are listed as being in– wait for it- Wuhan, China. Ironic that Donald Trump would have such an overt connection to a place that originated the virus that effectively brought down his presidency– especially given the man’s insistence on calling it the “China virus.” And then saying that, “no, it’s not racist at all.”

This doesn’t mean that the Chinese literally own Trump’s social media platform. I admit that this was perhaps a bit clickbaity. But the connection– in which the CEO of the SPAC is also the CEO of a Chinese company? Just … too utterly strange to not mention. There’s also that whole issue of Beijing cracking down on tech companies, which, at least ostensibly, includes both Yunhong and DWAC.

Wait. What’s A SPAC?

In business terms, a SPAC is a Special Purpose Acquisition Company. It’s kind of a loophole in securities law that allows you to set up a publicly-traded company for the sole purpose of being acquired by a bigger one, or vice versa. The rationale is pretty simple– it is really hard to go public as a fully-developed company. Doing it as a SPAC saves you money, time, and a great deal of regulatory scrutiny. A number of high profile companies have done it in recent years, including Matterport.

Lest it sound sketchy or faintly sleazy, we should point out that just because you go public via SPAC doesn’t mean you avoid other securities regulations. It might make the initial few sessions of trading a bit more volatile (I don’t know, really, just guessing)– because there might be less publicly available information. But ultimately, you’re still going to be liable for the same visibility of your books and finances, your same filings, whatever. Point is, the popularity of the SPAC suggests that it’s probably about time to streamline the process of getting listed in the first place. But that, dear readers, is a story for another day.

Why No More Mainstream Social Media?

The American conservative movement has spent years railing against the inquity of Big Tech, claiming that their voices are censored in favor of more “woke,” more “liberal” ones. While this isn’t really borne out by data, and Facebook’s recent whistleblower scandal highlights that the social media giant actually permits plenty of hate speech because, well, it sells, it’s still a common talking point. While the conservative complaint is a bit off-base, it’s not completely without merit. Facebook’s general opacity around the question has sparked more speculation about how it actually operates. The gripe that Big Tech has way too much power and way too few checks on its power resonates strongly with both parties– and, indeed, a majority of Americans. If only there were some sort of law to prevent the formation of monopolistic companies. Some sort of… I don’t know, anti-trust… law…? Anyway, just spitballing here.

Conservatives have at least tried to create contenders with Facebook and Twitter. But they’re relatively small in scope, have beaucoup security problems (owing to the fact that it’s probably nearly impossible to attract tech talent to work on platforms that give microphones to literal fascists), and, in avoiding policing speech that is definitively unpalatable for more mainstream platforms, often end up just becoming cesspools for things like anti-immigrant hate speech, white supremacy, and insurrectionist rantings of Those January 6th types. We saw this with Parler, and, well, we see what happened to them. Canadian platform Rumble is another one that is much beloved by the fascist wing of the American conservative movement. Telegram and Gab have also become popular in right wing circles.

As for Truth Social? It hasn’t launched yet, but pranksters have already wreaked minor havoc: According to Washington Post tech reporter Drew Harwell, someone had already used the fake Donald Trump account “to post the meme image “Pig Poop Balls.”

Facebook, in particular, has come under fire for major scandals like Cambridge Analytica, or the tolerance of white supremacist hate speech and terrorism on its platform, driving conservatives to explore alternatives and even develop their own platforms– no matter how poorly-attended or built they have been. Trump’s new “Truth Social” just went public today via SPAC.

Nat M. Zorach

Nat M. Zorach, AICP, MBA, is a city planner and energy professional based in Detroit, where he writes about infrastructure, sustainability, tech, and more. A native of Lancaster, Pennsylvania, he attended Grinnell College in Iowa, the Kogod School of Business at American University, the POCACITO transatlantic program, the SISE program at the University of Illinois Chicago, and he is also a StartingBloc Social Innovation Fellow. He enjoys long walks through historic, disinvested Rust Belt neighborhoods at sunset. (Nat's views and opinions are his own and do not represent those of his employer).

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