On Wednesday, Facebook’s oversight board ruled to uphold former President Donald Trump’s suspension on the social media platform. Yahoo Finance’s Daniel Howley breaks down the decision and its implication for the company.

Video Transcript

MYLES UDLAND: But we begin today with some anticipated news out of Facebook. The company's Oversight Board is set to rule on former Donald Trump's ability to use the platform. Julie Hyman, tell us a little bit about the background and what to expect from this ruling. I guess maybe we could start with what the Oversight Board kind of is.

JULIE HYMAN: Well, actually-- actually Myles, we have the ruling here. So, the headline here is that the suspension is upheld. In other words, President Trump was suspended from Facebook on January 7. This Oversight Board was examining whether that suspension would be hold-- held, would it indeed still occur.

And indeed, the headline we're seeing now is that the Trump suspension by Facebook is upheld by that Facebook Oversight Board, that panel that is supposed to be independent here. So, that's the headline number. I know there's still some process to go through here. And obviously, there's still the statement to go through as well, Myles.

MYLES UDLAND: There is indeed. Let's bring in Yahoo Finance's, Dan Howley, maybe to tell us a little bit more, Howley, about this ruling. And I guess where it fits within the context of what the Oversight Board has and has not done for Facebook to this point. Certainly, the highest profile event that they've taken on.

DAN HOWLEY: Yeah, it's interesting. It's as though they're saying-- it looks like they're saying that Facebook was right in its decision. Essentially, the Oversight Board has upheld Facebook's decision to suspend Mr. Trump's access to post content on Facebook and Instagram on January 7. But they say that his indefinite suspension is not correct.

Essentially what they're saying is, they don't have a policy, Facebook doesn't have a policy, to allow indefinite suspensions. They're either banned from the platform or they can't post for a certain period of time. And it looks like what they're essentially saying is that the Board is accusing Facebook of trying to skirt its own responsibilities, because they don't ask-- they don't have specific recommendation as to indefinite bans.

So, there is a statement that I do want to kind of point to here where it explains, OK, here we go. "In applying a vague standard penalty and then referring this case to the Board to resolve, Facebook's seeks to avoid responsibilities. The Board declines Facebook's request, and insists that Facebook apply and justify a defined penalty." So, while they agree that Facebook should uphold the suspension, they want to see that penalty fleshed out more responsibly than just indefinite.

So, really kind of strange turn of events here that does mean that, or at least it looks like, President Trump won't be able to go back on Facebook at any time in the future. They do request that Facebook make clearer why exactly they did it, or what exactly that penalty comes down to.

JULIE HYMAN: And actually, Dan, it looks like that they're giving them a deadline to do so here. So, when you say the Board insist that Facebook review this matter to determine and justify a proportionate response, that is a response that's consistent with the rules that are applied to other uses of platform. In other words, Facebook now has to decide whether it's going to keep him off permanently, and it has to complete its review of this matter within six months of the date of this decision.

So, now, Facebook the clock starts ticking. Facebook has six months now to figure out what it is going to do next. It says, the Board also made policy recommendations for Facebook to implement in developing clear, necessary, and proportionate policies that promote public safety and respect freedom of expression. And what's interesting here, as well, and I'm still going through this, by the way, they sort of lay out the timeline for the president's post surrounding the January 7th insurrection at the Capitol.

And what the Board finds is that Mr. Trump, quote, "created an environment where a serious risk of violence was possible. At the time of Mr. Trump's post, there was a clear immediate risk of harm, and his words of support for those involved in the riots legitimized their violent actions. As president, Mr. Trump had a high level of influence." So, in other words, it was appropriate to suspend him. It was not appropriate, the Board says, for Facebook to impose an indefinite suspension.

And now, Facebook has to decide what it's going to do and to figure out some sort of policy parameters around this. So, quite interesting here. I think that language, Dan, is pretty strong by the Board in saying, indeed, in sort of validating the suspension at that time.

DAN HOWLEY: Yeah, it really is interesting just to see though the criticism that the Board leveled at Facebook as well, right? They-- they had this indefinite suspension. They don't exactly say what that means, or Facebook didn't exactly say what that meant right out of the gate. So, now, they're saying, look, you need to do that. You need to go back and give us a proper punishment, not just this indefinite suspension.

Don't waffle on this. Give us a firm reasoning for him to be off the platform, and then we'll-- we'll look at it again. And he said, again, that six month time frame. Obviously, that's to give Facebook a little bit of time to come up with what to do there.

But you know, this thing I think is probably the biggest test of the Board yet. And the fact that they hit at Facebook for not properly providing a real kind of groundwork for what to do in situations like this, it's incredibly interesting. And I think it kind of upholds the capabilities of the Board to really stand up to Facebook itself.

BRIAN SOZZI: Dan, really extensive stuff here. Does this-- is this the type of decision that would bring advertisers back to the platform? Those that did flee in the wake of this situation, did they come back, or even if the advertisers that stayed on the platform and showed confidence in Facebook, there's a lot of things clearly that Facebook has to get right here just judging by this decision.

DAN HOWLEY: Yeah, I think that-- look, advertisers leave Facebook and then come right back, right? And that's kind of the reason why Facebook is able to get away with what it gets away with. I think, you know, the real key here is that even if it's not big advertisers that are on there, it's small advertisers that are on there, and they make up the vast majority of Facebook's revenue.

If you're a small business, and you don't have a lot of money, and you're trying to reach a certain amount of people, you're not going to really care that much about what Facebook does unless, you know, I mean, I don't know at what point they would stop having people want to go there and advertise. So, I don't think that this was turning off advertisers. You know, they obviously had a great quarter recently.

So, this, I think, just kind of proves that Facebook is on a path to providing some kind of recognition that they do have this massive platform, and there are responsibilities that they need to take. The Board obviously hits at them and says, look, you really do need to make a decision on what to do in this instance, as far as the length of the suspension. Or you need a mechanism-- mechanism in place to deal with these kinds of issues. And they clearly didn't have that. So, the Board hits at them for that, but does uphold that suspension.

MYLES UDLAND: Yeah, and I think we all agree that the suspension, the continued suspension of Donald Trump, which I guess is no longer technically an indefinite suspension, it's a suspension pending further review, which will either be, I guess, overturned in a few months or will be held forever, but it will no longer be called indefinite, that's really the headline here. But just a couple other interesting things reading this as we're going through.

And I think it kind of gets at the heart of what the Board's purpose is, as it relates to Facebook, and maybe the Board addressing some of the public criticisms of Facebook. They say that while the same rules apply to all users, context matters when assessing the probability and imminence of harm. When posed by influential users, pose a high probability of imminent harm. Facebook should act quickly to enforce its rules.

Company also-- or the Board, rather, also talking about how heads of state and other high profile officials can have a greater power to cause harm than other people. And Howley, this discussion around advertisers, their appetite for the platform, who uses it, who do they make money off of, Facebook has always wanted it to be neutral, right?

All users are the same, is the basic Mark Zuckerberg worldview. And I think the Board here being very clear that they do not see that as adequate for Facebook now and in the future. And that Facebook is indeed going to have to think of some users differently, should systematically think of some users differently than others.

Again, I don't know really if that's going to change the business at all because, I mean, maybe it will on the margins, but I think just in terms of what the platform means, that seems like a somewhat drastic or largish shift at least in how Facebook conceives of its user base.

DAN HOWLEY: Yeah, I think one of the important things is to-- to look at the world leaders. We haven't even gotten-- been able to get to that. The view that they take on what world leaders should be treated or how they should be treated? That was something that the Oversight Board was also asked to look at. And that's something that's been an ongoing conversation. OK.

So, they suspend President Trump, but there are other world leaders out there that are still able to use Facebook. We've seen Facebook use by leaders in Myanmar, for instance, the military there, to spread disinformation and misinformation. And obviously, that's something that they want to be able to clamp down on and understand more.

And so, the Oversight Board is also asked to look at that, but obviously, the most pressing matter is whether or not former President Trump was allowed back on the platform. And it looks like it will be upheld indefinitely, but they do need to figure out what-- what exactly that means. So, they need to come up with a new rule for this. And you know, I do appreciate the fact that they're-- they're not pulling punches and they are saying, look, you guys cannot make us the arbiters of what happens on your platform, just as much as you don't want to be the arbiters of truth on your platform.

MYLES UDLAND: Yep, all right, well, stock up here 6/10 ahead of the market open. Dan Howley, thanks for stopping in on a story that is certainly to continue to unfold throughout today's session.