Facebook has said it does not have a policy that prohibits alleged fake news, after calls to remove a post making allegations against Prime Minister Lee Hsien Loong and the Government in relation to the 1Malaysia Development Berhad (1MDB) scandal.

Despite a request to do so by the Infocomm Development Media Authority (IMDA), the social media giant refused to take down a post by sociopolitical site States Times Review, which linked to an article on its site.

The Nov 5 article - titled "Lee Hsien Loong becomes 1MDB's key investigation target" - suggested Malaysia had signed several unfair agreements with Singapore in exchange for Singapore banks' assistance in laundering 1MDB funds.

The IMDA also issued a notice to States Times Review to take down the article by 5pm last Friday, which the website failed to do. The authority said the article is considered prohibited content under the Internet Code of Practice, as it had undermined public confidence in the Government's integrity.

In response to queries from The Straits Times on why it had not acceded to IMDA's request, a Facebook spokesman said it had a responsibility to handle any government request to restrict alleged misinformation "carefully and thoughtfully", and that this is consistent with its approach to government requests elsewhere.

However, she added that Facebook does not have a policy that prohibits alleged falsehoods, "apart from in situations where this content has the potential to contribute to imminent violence or physical harm". Facebook did not explain how it determines whether or not a post spreads falsehoods or misinformation.

The Law Ministry, which had described the States Times Review post as false and defamatory, had previously said Facebook's refusal to take down the post was proof of the need for legislation against deliberate online falsehoods.

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It added last night that given previous "public assurances that Facebook is committed to combating online falsehoods, we are disappointed that Facebook has not backed up its promises to combat online falsehoods with action".

The Monetary Authority of Singapore has also filed a police report against the author of the States Times Review article, which it described as "baseless and defamatory".