The policy will apply to news organizations financially or editorially controlled by the state. It will not apply to taxpayer-funded entities, like independent public broadcasters, Twitter said. It plans to notify news entities if they are no longer permitted to advertise. Those organizations will have 30 days to "offboard" from Twitter's advertising products.

In a separate public disclosure, Twitter says 936 accounts from the People's Republic of China were "deliberately and specifically attempting to sow political discord in Hong Kong." In a blog post, Twitter says that it suspended all of the accounts for a range of violations. According to CNBC, it's believed the accounts are part of a state-backed misinformation campaign.

As we reported earlier, both the ads from Xinhua and the accounts spreading misinformation put Twitter in an awkward position. Twitter could face a harsh response for its decision to suspend the accounts and ban ads from state-controlled news outlets. But if it wants to retain the support of free speech advocates, it will need to take a strong stance on both fronts.