Every day we spend hours on social media and use popular digital platforms to get the latest content.
Giant companies like Facebook, YouTube (via Alphabet Inc.), Twitter, Netflix and Spotify are listed on the U.S. stock market.
But are these stocks shariah compliant?
What makes these stocks sharia compliant?
If it does not comply with sharia, what is the reason?
Divided into two
In short, social media and digital content platforms are divided into two, namely:
A platform that does not produce any content
A platform that does not produce any content, but allows content to be curated or taken from a specific theme
Platforms That Do Not Produce Any Content
Examples of such platforms are Facebook, YouTube (Alphabet Inc) and Twitter. They do not produce any digital content, but allow users to upload content, share and interact with other users.
Furthermore, the platform is also sensitive to illegal content such as pornography, drugs, alcohol, gambling, dangerous and indecent activities and has a policy to prevent it from being uploaded.
The company's main income comes from advertising, which is made by users themselves and the ads will be filtered to ensure that they do not contain the above elements.
For now if you look at Facebook, YouTube (Alphabet Inc) and Twitter; then their business model is considered ‘passed’ and meets shariah requirements.
As the next criterion is that the company's current financial ratio also exceeds the set benchmark, the company's shares are given shariah-compliant status. (Financial ratio benchmarks are intended to measure usury and usury-based elements in a company’s financial position).
A Platform That Does Not Produce Any Content, But Allows Content To Be Curated Or Taken From A Theme
A platform that meets the above criteria, but follows a non -sharia -compliant theme such as music sharing. The main income of the company is through subscription fees.
Because the music itself is a shariah -compliant business, Spotify shares are shariah -non -compliant even though the company’s main source of income is based on subscription fees.
What About A Platform That Produces Its Own Content?
Take the example of Netflix, which produces most of their own movies and series. It also allows curated content that is selected by Netflix itself.
Since there is content on Netflix itself that is against sharia requirements, and even if the company’s revenue is from subscription fees, then Netflix’s shares become sharia non -compliant.
May the friends who invest or trade in the global stock market always be aware of the shariah status of the stocks there.
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