  Social media platforms have diverse content moderation policies, with many
prominent actors hesitant to impose strict regulations. A key reason for this
reluctance could be the competitive advantage that comes with lax regulation. A
popular platform that starts enforcing content moderation rules may fear that
it could lose users to less-regulated alternative platforms. Moreover, if users
continue harmful activities on other platforms, regulation ends up being
futile. This article examines the competitive aspect of content moderation by
considering the motivations of all involved players (platformer, news source,
and social media users), identifying the regulation policies sustained in
equilibrium, and evaluating the information quality available on each platform.
Applied to simple yet relevant social networks such as stochastic block models,
our model reveals the conditions for a popular platform to enforce strict
regulation without losing users. Effectiveness of regulation depends on the
diffusive property of news posts, friend interaction qualities in social media,
the sizes and cohesiveness of communities, and how much sympathizers appreciate
surprising news from influencers.
