Source: The Conversation – USA – By Gregory H. Shill, Professor of Law & Michael and Brenda Sandler Faculty Fellow in Corporate Law, University of Iowa
When Congress passed a law in 2024 to ban TikTok unless it came under U.S. ownership, lawmakers argued that the app’s Chinese parent company posed national security concerns. The Trump administration, which had granted the viral video app a reprieve shortly after taking office in January 2025, extended that pause again on April 4 after the Chinese government reportedly scuttled a planned deal.
Regardless of how this all shakes out, the TikTok fight underscores deeper concerns about who controls social media in the United States.
Given that worry, it might surprise Americans to learn that nearly every social media giant is controlled by just one or two men. For example, Mark Zuckerberg controls Meta, which owns Facebook, Instagram and WhatsApp, while Larry Page and Sergey Brin control Alphabet, which owns YouTube and Google.
What does “control” mean? These companies are publicly traded – anybody can buy or sell their shares – but a legal mechanism known as dual-class stock gives founders extra votes in shareholder decisions. The dual-class structure crowns these men “corporate royalty,” as one former U.S. Securities and Exchange Commission commissioner has put it, granting them near-absolute control of corporate policy and resources without requiring them to take on commensurate financial risk.
While TikTok is unusual in many respects, the way it vests power in one man is actually quite banal. TikTok’s parent company, ByteDance, is privately held, but it’s reportedly controlled by a co-founder, Chinese national Zhang Yiming, via a dual-class structure.
As a professor of corporate law, I’d urge policymakers and the public to consider the societal risks of a system that allows a single person to wield full control over a major corporation through dual-class stock.
The dual-class effect: Meta as a case study
In a standard single-class structure – where voting power tracks the amount of company equity a shareholder owns – someone seeking total control of a company must ordinarily spend a lot of money buying up shares, which also means assuming a lot of risk. This “skin in the game” requirement limits how much influence a single person can exert on a company.
That safeguard is informal, not mandatory, and dual-class structures do away with it. Ascendant among Silicon Valley firms since Google’s 2004 initial public offering in the U.S. and recently legalized in the U.K., the dual-class model is fiercely debated in corporate governance circles. To date, however, its downsides have been understood only as a problem for shareholders, not society, despite broad and bipartisan concern about the influence of Big Tech.
Let’s pick on Meta as an example. Zuckerberg reportedly owns just 13.5% of the company’s equity, but because he owns 99.7% of the supervoting shares, he controls 61% of the company’s votes.
This setup gives him a lock on corporate policy as a controlling shareholder, even though he only owns a bit over one-eighth of Meta stock by value. He has full control of the company without placing anywhere near an equivalent amount of money at risk.
You don’t have to be the parent of an Instagram-addicted teenager to see that Meta has generated what might be described as social costs. For example, Amnesty International has alleged that Facebook algorithms “substantially contributed to the atrocities perpetrated by the Myanmar military” in 2017. Facebook has also been criticized for promoting misinformation during past U.S. elections and for suppressing embarrassing stories about Hunter Biden.
These examples underscore broader social concerns around content moderation, privacy and tech titans’ outsized political influence. Notably, Zuckerberg – who has been associated with progressive causes in the past – has moved to embrace President Donald Trump strongly in recent months and asked for Trump’s support for Meta in a legal battle with the European Union.
When corporate control meets the Supreme Court
In a 2023 law journal article, I noted that recent Supreme Court decisions expanding corporate constitutional rights stand to give company founders unprecedented power to shape society. While the rise of founder-controlled social media giants with distinct political agendas has gotten a lot of attention, the widening scope of what is deemed protected corporate speech and religious exercise hasn’t been a part of that conversation.
I think there’s a real possibility that these two streams will converge, granting constitutional protection to “founder kings” who wish to leverage company resources for private agendas. Two recent legal developments raise the stakes.
First, the courts – and in particular the Supreme Court under Chief Justice John Roberts – have been expanding corporate constitutional rights, which could allow dual-class founders to carve out exceptions to generally applicable laws.
Second, recent legal changes in Delaware – which despite its tiny size is the leading corporate law jurisdiction in the U.S. – could make it easier for dual-class controlling shareholders to exercise power within their companies.
To get a sense of the potential consequences, suppose the controlling shareholder of a dual-class company were to cause it to defy a federal mandate – for example, a requirement to offer health insurance plans that cover contraception – on the grounds that complying would violate their religious beliefs. The Supreme Court in Hobby Lobby v. Burwell recognized exactly this sort of faith-based exception for a large family-owned but privately held business.
Would it recognize such an exception for a company like Snap? The company, best known for its app Snapchat, is publicly traded, but just two men, Robert Murphy and Evan Spiegel, control 99.5% of the voting power.
We can’t be sure. Hobby Lobby is different from Snap in many ways. Yet what they have in common is the ability of their owners to plausibly claim a unitary speech or religious exercise interest that would not characterize a typical large business. Snap’s public owners have no say at all – zero votes – in the company’s affairs. If the controllers of Snap asserted a religious basis for exempting the company from a regulation – and to be clear, this is a purely hypothetical example – the courts might well indulge the claim.
The judicial system’s expanding view of corporate constitutional rights – seen not just in Hobby Lobby but in Citizens United v. FEC and a number of more recent and ongoing cases in state and lower federal courts – could empower founders to leverage their businesses for private agendas. Whether or not this is likely for Snap in particular, the combination of the dual-class model and changes in the law would seem to leave the door open.
Elon Musk vs. the dual-class model
A fitting contrast might be none other than Twitter – renamed X after Elon Musk acquired it and who recently merged it into xAI, another Musk-led venture.
As a privately held company, xAI is not required to file public investor reports, and much about its ownership structure remains opaque. But let’s assume the company is majority-owned by Musk in a conventional single-class structure – the type Twitter had before he bought it. Given a chance to provoke, Musk has consistently proved eager to raise his hand. Couldn’t he use his control to get X or xAI – we’ll stick with “X” for simplicity – to exercise the same vast control that Murphy and Spiegel could at Snap, or Zuckerberg at Meta?
Yes – but with a subtle yet important difference.
There’s a certain logic to X’s key corporate decisions being vested in Musk. Quite famously, he ponied up US$44 billion to buy the entire company. Legal prohibitions on the deployment of private resources for influence are confined to a small universe of cases – antitrust, bribery, certain types of campaign contributions. Those resources include businesses, which are a form of property, that are owned by wealthy individuals or groups. With limited exceptions, people can use their own property as they wish.
In a dual-class company, though, controllers use other people’s property as they wish. They can get the immense legal, economic and organizational power of the corporate form without having to put much skin in the game.
Beyond TikTok: The conversation the US should be having
Traditionally, questions of rich-guy influence have been seen through the lens of politics, taxes or public regulation. But seeing them as questions about the exercise of private corporate control makes clear the special social challenges posed by dual-class stock.
Wall Street has mostly accepted the bargain: ironclad insulation of Zuckerberg in exchange for rock-solid Meta returns. But this debate is not only of interest for the investment community. Everyone has a stake in its outcome.
It’s fair for the public to question the wisdom of allowing company founders to leverage the resources and newly jumbo-sized constitutional rights of large corporations in service of a special agenda – be it for a foreign government, a political party or a religious faith – that isn’t even connected to classical purposes of the corporation or advantages of the dual-class model.
The distinctive risks posed by TikTok are mostly unrelated to its share structure. But the debate over the ban-or-sell law offers a reminder: The powers created by dual-class stock aren’t unique to Chinese control. America’s homegrown-found kings wield them, too.
Gregory H. Shill does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. The founder kings of Silicon Valley: Dual-class stock gives US social media company controllers nearly as much power as ByteDance has over TikTok – https://theconversation.com/the-founder-kings-of-silicon-valley-dual-class-stock-gives-us-social-media-company-controllers-nearly-as-much-power-as-bytedance-has-over-tiktok-253671
