Executives from the world’s largest (and most valuable) tech companies were hauled before the US senate last week to defend their companies’ content moderation policies as regulators look to crack down on poor conduct.

The Senate Commerce Committee grilled top executives from Google, Twitter, and Facebook in a broader move to repeal Section 230 of the Communications Decency Act,1 which protects online platforms from liability for the content posted by their users.

The obscure piece of legislation has drawn the ire of both Republicans (who claim President Donald Trump is being unjustifiably censored) and Democrats (who worry the policy allows the spread of misinformation) in recent years.

Watch the full hearings here

During the almost-four hour session, Republican senator (and former Presidential hopeful) Ted Cruz took aim at Twitter CEO Jack Dorsey for removing content posted by President Donald Trump while his fellow Republican Cory Gardner asked why firebrand Iranian Ayatollah Ali Khamenei was not banned after calling for Israel to be dismantled.

An ongoing struggle 

It’s not the first time the controversial social media executive has come to blows with US senators, having faced similar accusations of anti-conservative bias in 2018 when the Senate Intelligence Committee grilled tech companies over a range of issues including data privacy and hate speech.

This growing backlash to big technology is part of an ongoing trend that has seen uneasy regulators grow increasingly concerned by the market power and data collection capacity of these businesses – and the possibility they may abuse those powers.

This has triggered a “race to regulate”, according to professional services firm Herbert Smith Freehills, and prompted major platform providers to change their own policies to keep regulators – and consumers – happy, including by cracking down on third-party cookie data collection.

Google has announced they will ban the use of this data by 2022, following the example set by competitors Safari and Firefox (who have already banned the controversial data source) in a move that will devastate the online marketing industry.

The solution

As these changes unfold, Australian listed data collection and insights business Pureprofile (ASX: PPL) is positioned to be a big winner in the race for trustworthy data which doesn’t violate the privacy of those who share their information.

Pureprofile’s proprietary platform collects declared data – first party information willingly volunteered by its panels of consumers – many of which fall into the key 25-34, 35-44, and 45-54 year age groups.

Partnerships with other online providers globally give the business access to hundreds of millions of consumer profiles across 25 countries in addition to the more than 2 million it already has in Australia, New Zealand, the United Kingdom and the United States. 

And the data collected by Pureprofile allows them to aggregate it and work with their clients to build comprehensive consumer profiles. This is all provided through Pureprofile’s proprietary technology platform – developed over 20 years – which clients can access on a self-serve, Software-as-a-Service basis.

Independent research house Research as a Service (RaaS) said Pureprofile’s capacity to provide pre-qualified panels of consumers to clients – with privacy requirements matched for both parties – is a core strength, and the proprietary technology underpinning this “is a highly profitable and growing part” of the company’s revenue stack.

The company has recently undergone a restructure and added former Kantar and Dynata executive Martin FIlz to the team, and is now going through a recapitalisation (via a fully underwritten, 8-for-1 entitlements offer priced at 2 cents per share) which will drastically reduce the business’ debt burden and allow for greater investment into its proprietary technology.

With these changes, RaaS base case scenario is for Pureprofile’s price to reach 4.6 cents per share at the conclusion of the capital raise. This was based off a discounted cash flow valuation method – which estimates a company’s value based on projections of its cash flow.

RaaS also looked at the upside and downside cases using the same methodology. The downside case is for Pureprofile’s share price to hit 2.5 cents following the capital raise, while the upside case sees it hit 8.1 cents.

Join Pureprofile CEO Martin Filz this Friday, 13th November at 11am AEDT in a live online investor briefing where he’ll discuss the industry tailwinds and the company’s strategic turnaround. Click here to book your spot.

Reach Markets have been engaged by PPL to help manage their investor communications. As the advisers assisting with the management of their current Rights Issue, Reach Markets may receive fees depending on its uptake.

Sources:

• Section 230 of the Communications Decency Act
• Big Tech CEO Senate hearing ends with little discussion on how to fix companies’ liability shield
• Khamenei.ir on Twitter

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