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Why Advertisers Are Boycotting Facebook – The New York Times

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Mark ZuckerbergCredit…Drew Angerer/Getty Images

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A boycott of advertisers on social media is gaining momentum, and Facebook is the primary target. Marketers are expressing unease with how it handles misinformation and hate speech, including its permissive approach to problematic posts by President Trump.

Who’s doing what. The boycotts have followed a call by the advocacy group Stop Hate for Profit, which is keeping a running list of participating companies. Over the weekend, Starbucks and Diageo said they would pause advertising on all social media platforms. They’re among the biggest spenders on Facebook ads: Starbucks spent $95 million and Diageo $23 spent million on the platform last year. Other companies have boycotted Facebook specifically, including Honda America, Levi Strauss and Patagonia.

[Here’s The New York Times’s list of the biggest brands pulling ads from Facebook over hate speech.]

Who’s next? Procter & Gamble, the world’s largest advertiser, said it wouldn’t rule out a pause on Facebook ads. (Its big rival, Unilever, is stopping ads on Facebook, Instagram and Twitter through the end of the year.) Big ad agencies generally take their orders from clients, but they also have leeway to steer spending to certain platforms over others.

• Claiming censorship by major social media platforms, many right-leaning pundits, lawmakers and others have decamped to the upstart network Parler. That may cost Facebook some high-profile users — and an outsized source of engagement on its platform.

Can Facebook turn it around? Its stock price tumbled last week, as ever-bigger advertisers joined the boycott. (It’s poised to fall at the open today.) On Friday, it rolled out new measures to flag problematic political posts and expand its policies around hate speech.

• It’s worth remembering that Facebook collected more than $17 billion in advertising revenue in the first quarter alone: Losing big brand ads is painful, but the bulk of the company’s sales come from millions of smaller businesses that rely heavily on the platform.

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The spotlight is now on Mark Zuckerberg, who holds all the power at Facebook. His complicated relationship with Mr. Trump is at the center of the controversy, and how it plays out will determine how damaging the boycott will be for his company. Here’s what Andrew has to say about how it could play out:

Mr. Zuckerberg is often criticized for policies that are viewed by his detractors as unprincipled and craven, driven by business interests more than any moral code. But the truth, based on my years of reporting on him, is that his policies have always been driven less by profits and more by an overarching view of what he thinks is right. (Even when he is arguably wrong).

If he were always trying to placate advertisers, the boycott wouldn’t have happened. Of course, you could argue that his recent reversal on misinformation is proof of malleable principles. (By extension, his prior permissiveness could be seen as placating the Trump administration in hopes of keeping regulators at bay.) But I think it is fair to say that anyone who knows Mr. Zuckerberg knows that he believes in his positions — until he is forced to abandon them.

What do you think? Are the advertiser boycotts warranted? Will they have any effect? How should Facebook and other social media networks respond? Let us know at dealbook@nytimes.com — include your name and location and we may feature your response in a future newsletter.

Boeing’s 737 Max will soon return to the skies — but only for safety testing. Credit…Lindsey Wasson/Reuters

Coronavirus cases surpassed 10 million worldwide. Global deaths from Covid-19 have hit 500,000, doubling in less than two months. If that isn’t grim enough, Health and Human Services Secretary Alex Azar warned that “the window is closing” to suppress a flare-up in cases in the South and West.

Chesapeake Energy filed for bankruptcy protection. The fracking pioneer helped pave the way for the U.S. energy boom, but a coronavirus-induced drop in oil demand and a huge debt load forced its hand.

Boeing can start test flights for the 737 Max. The F.A.A. gave the company permission to begin flights to demonstrate that the troubled jet is safe. It was grounded in March last year in the wake of two crashes that killed 346 people.

The E.U. is preparing to bar most Americans from entry when it reopens for travel on Wednesday. The U.S. has been lumped together with Russia and dozens of other countries that have been unable to contain their coronavirus infection rates.

We know who’s using the Fed’s corporate bond-buying program. The central bank named 794 companies whose investment-grade bonds it will buy to support debt markets.

Private equity firms like Blackstone invested $700 billion around the U.S. last year.Credit…Mark Lennihan/Associated Press

The private equity industry is flush with cash, even after investing $700 billion last year. A new report on that spending by its main lobbying group in Washington, the American Investment Council, shows how it’s trying to distribute those funds in politically advantageous ways.

Three-quarters of investments last year were spread across 20 states, according to the council, including California, Texas, Florida, New York and Illinois. Compare that with venture capital, where 80 percent of dollars were invested in three states: California, New York and Massachusetts, according to PwC and CB Insights.

It’s a reflection of the power of the industry, which has plenty of money to spend and companies willing to sell themselves to escape the glare of public markets.

It’s also a sign of the industry’s efforts to win political support, as it faces opposition from progressive lawmakers who want to impose higher taxes and criticize its reputation for burdening companies with debt and cutting jobs.

• The trade group noted which lawmakers’ districts benefited the most from private equity dollars. Topping the list were those of Representatives Carolyn Maloney of New York, Gwen Moore of Wisconsin and Debbie Wasserman Schultz of Florida, all Democrats.

Michelle Leder is the founder of the S.E.C. filing site footnoted*. Here, she wonders whether the pandemic is providing cover for charges that companies were reluctant to reveal in better times. You can follow her on Twitter at @footnoted.

The coronavirus has weighed on many a company’s bottom line. But a growing number seem to be using the pandemic to take out their trash, announcing goodwill write-downs for deals struck long ago. These may be warranted in a post-coronavirus world, but they also raise questions about the true value of intangible assets amassed in acquisitions, which live on the buyer’s balance sheet as goodwill.

Take FedEx. The company recently disclosed that it was taking a $348 million impairment charge to account for goodwill related to its $2.4 billion acquisition of Kinko’s. That deal was announced in December 2003 and completed several months later. In its filing, FedEx said it was taking the charge “based on declining print revenue and temporary store closures” related to the pandemic.

FedEx is hardly alone:

• When it reported earnings last month, the clothing company VF Corp. disclosed that it was taking a $323 million impairment charge related to its Timberland unit. VF bought Timberland for $2 billion in 2011.

• Expedia took $886 million in charges recently for its Trivago (acquired in 2012 for $632 million) and VRBO (bought for $3.9 billion in 2015) brands, saying that they “resulted from the significant negative impact related to Covid-19.”

• Marriott warned in its first-quarter earnings report that it had $17.4 billion of goodwill and other intangible assets on its balance sheet — largely tied to its 2016 acquisition of Starwood for $13 billion — and that “any future impairment of these assets” could be “material.”

Of course, it doesn’t always take a pandemic for companies to write off goodwill from an earlier merger. In late 2018, Verizon wrote off $4.6 billion related to its purchase of Yahoo in 2016, essentially saying that the premium it paid for the business was worthless.

But the number of deals struck in recent years, combined with the uncertainty tied to the coronavirus, makes it highly likely that Covid-19 will become a common excuse for companies to revisit overly optimistic merger math.

A new video by The Times’s Opinion team examines how the N.B.A.’s rules on revenue sharing, salary caps and the draft have made the basketball league more equal. It’s fun, informative and only five minutes long. Check it out here.

The league knows how important it is to make sure everyone gets a fair chance. The lengths it goes to address inequality and promote competition are noteworthy in a country skeptical of socialism, says Binyamin Appelbaum, who reported the story for the “America We Need” series:

They haven’t abolished winners and losers. They haven’t abolished capitalism or wealth or profit. They just keep teams from using those profits to rig the system and spoil the game for everyone. That’s not socialism. It’s just fair play.

💸 The biggest U.S. banks publish their capital plans after the market closes today, responding to last week’s stress tests by the Fed. Regulators forced banks to forgo share buybacks in the third quarter, and put a limit on dividends that analysts think will be toughest on Wells Fargo.

🗣 The House Financial Services Committee holds a hearing tomorrow to review the government’s coronavirus response programs, featuring testimony from the Fed chairman, Jay Powell, and Treasury Secretary Steven Mnuchin. It is also the last day to apply for loans from the Paycheck Protection Program, the $660 billion program aimed at small businesses that has been revised several times, and still has well over $100 billion left to lend.

🇺🇸🇲🇽🇨🇦 The “new NAFTA” — formally known as the United States-Mexico-Canada Agreement, or U.S.M.C.A. — comes into force on Wednesday. The trade agreement hasn’t exactly spurred greater continental camaraderie: the U.S. recently threatened to reimpose tariffs on Canadian aluminum.

📈 Thursday is a big day for economic data, with monthly payrolls and weekly unemployment claims coming out. Economists expect that the U.S. economy added a net 3 million jobs in June, following the unexpectedly strong 2.5 million gain in May. At the same time, the latest week’s unemployment claims are forecast to come in at 1.3 million, the 15th week in a row above one million.

🗓 Noteworthy corporate earnings include the chip maker Micron Technology and the high-end office furniture seller Herman Miller today; Mrs. Butterworth’s parent, Conagra, and the package deliverer FedEx tomorrow; and the Corona brewer Constellation Brands, the cereal giant General Mills and the troubled department store chain Macy’s on Wednesday.

Deals

• PG&E raised $5.5 billion by selling equity as it prepares to exit from bankruptcy protection. (Reuters)

• Investors sued the mattress seller Casper over its disappointing I.P.O. (Bloomberg)

Politics and policy

• How Obamacare is facing its biggest test for survival amid a recession and a pandemic. (NYT)

Tech

• The harassment of a blogger by former eBay employees, as detailed in an indictment, reflects an extreme version of Silicon Valley’s penchant for no-holds-barred reputation management. (NYT)

Best of the rest

• How fast-casual chains like Applebee’s are trying to coax diners to return — by pitching safety, not breadsticks. (NYT)

• Bill Gates’s eldest daughter, Jennifer, opens up on being “born into a huge situation of privilege.” (Business Insider)

We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.