Publicly Traded, Constitutionally Accountable

Caveat: I am not a lawyer, and I do not play one on TV.

“But They’re a Private Company. . . .”

We have seen an unwelcome upsurge in media censorship and de-platforming by very powerful corporations, such as Facebook, Alphabet (Google’s parent corporation), Twitter, and Amazon. The argument often used to defend their actions goes something like, “but they’re a private company!” The implied and unstated segment of this argument is that the Bill of Rights solely applies to government infringement of civil rights. Private companies are not legally bound to honor the Constitution: legislation,yes–Constitution, no. Further, the Supreme Court of the United States has ruled in favor of this interpretation several times over.

Private and Public Corporations

As I understand it, common law establishes corporations are entities in their own right, and many of the common-law privileges of corporations have been codified in legislation. I also know there are legal differences between closely-held (or “closed”) corporations, those who shares of ownership are not open to public sale, and publicly traded (or “open”) corporations, whose shares are available on the open market (Granted even in open corporations, there are privileged shares not available in the public marketplace). We routinely see evidence of open corporations in the various stock exchanges.

Now, THE Question

Are open corporations truly private companies? Yes, they are entities. No, they are not government entities. Yes, their corporate status generally grants liability protection to investors.

My argument suggests that open corporations are subject to observing the Constitution because their shares are available in the public marketplace, and can be purchased by anyone. Open corporations are, in point of fact, public corporations, which should be accountable to honoring the Bill of Rights.

A counter argument may offer that open corporations could simply buy back all their public shares, and transform itself into a closed corporation. Yes, one could. But, in doing that they close themselves off significant cash reserves afforded by being publicly traded.

Another down-side to closely held corporations is that their internal policies, and accounting practices are not available for the scrutiny public corporations potentially have to endure. Technically, that’s true. However, the transnational scope of the biggest open corporations, such as Alphabet and Amazon, render that accountability infeasible.

Your Mission, Should You Decide to Accept It. . . .

My contention is that open corporations whose shares are traded in the public marketplace, that is on stock exchanges, should be subject to the same accountability to the Bill of Rights as any government entity (for whatever that is worth in this era of blatant government non-compliance). Perhaps this should be part of a legislative docket for Congress.