Why More Companies Are Opposing the Texas Social Media Law

Update: On May 31, The Supreme Court blocked the HB20 social media law from taking effect. The decision means Texas can’t enforce a new law that would allow Texans to sue tech giants like YouTube and Meta over content moderation policies. The court’s order isn’t a final ruling, and the case will return to district court, where arguments on both sides will be made. Last week, 19 trade bodies, including the Interactive Advertising Bureau, filed for an emergency application supporting NetChoice and the Computer and Communications Industry Association (CCIA)—organizations that represent tech giants like Google, Amazon, and Facebook—against the Texas social media law. Known as the Texas HB20, the law stops social media platforms with over 50 million monthly active users from banning and censoring users based on their political views. This would prevent Facebook from blocking a post, say, about international campaigns over the Ukraine war or racist screeds as posted by the shooter in the recent Buffalo shooting, among other topics. “Hate speech, violence, terrorism, and other reprehensible content, has no place in Americans’ everyday lives and it likewise should have no place on the internet,” wrote IAB’s executive vice president for public policy, Lartease Tiffith in a statement. "Businesses large and small want to know that their advertising and marketing is reaching its intended audience, without having their ads placed next to content they deem to be offensive or untrue." The tech groups have asked the U.S. Supreme Court for an emergency ruling to block the law—a ruling could come as soon as this week. TikTok Leads the Charge in Content Moderation Thanks to Staffing Up in Europe Content moderation has been a lightning rod for platforms, especially surrounding misinformation on Covid-19. Brands like Nestlé and Epic games have pulled advertising from YouTube for appearing next to unsafe content. The Texas law has concerned advertisers who are wary of placing ads next to murky content. While platforms fight for their right to the First Amendment, they also risk losing huge ad revenues as advertisers may want to quit the platform if the law is passed. Currently, the law is awaiting a Supreme Court ruling on whether companies in Texas will need to comply with the law during the litigation. But a similar Florida law deemed as unconstitutional gives trade bodies a glimmer of hope. How did we get here? The HB20 was spurred by Texas Republicans who criticized Silicon Valley companies for being anti-conservative in 2021. This was immediately challenged by lobbying groups and trade bodies like NetChoice and CCIA last December, who called the law unconstitutional. Last week, the New York Fifth Circuit Court of Appeals overruled this decision. The industry groups made an emergency application to the U.S. Supreme Court to block the law. That decision could come as soon as this week, according to sources. What does it entail? Under the law, Texans will have the right to express whatever they wish to without the fear of their accounts being suspended or being banned from the platform. Moreover, if a resident feels they have been wrongfully suspended or blocked from the platform, the bill gives them the right to sue. As for the social media platforms, the bill requires them to share accurate information regarding their content management, data management and business practices. This includes how social media platforms curate and target content to users, places and promote content, services and products and moderate content. Practices on search, ranking or other algorithms will be required to be shared as well. What will be the impact? Whether this will cost more time and money for the platforms is unclear, but trade bodies are concerned that measures showing how social media platforms moderate content will reveal the playbook to bad actors, such as users seeking to post violent, racist or pornographic content. Although the law does not specify any penalties for violation, users can sue the platform to recover their court costs. The predictable result is that users and advertisers will leave the platforms in droves, resulting in irretrievably lost goodwill and reputation.Elizabeth Banker, vp of legal advocacy at tech lobbying group Chamber of Progress Sources from trade organizations point out the Texas bill will make it harder for tech companies either to comply with the law or halt their services in this state. The HB20 prohibits social media companies from stopping their services in Texas, since it defies the interstate commerce law giving businesses the flexibility to operate where they want. What about advertisers? Nonetheless, having the agency of content moderation stripped from platforms is a concern for advertisers, according to lobbyists. “Advertisers don’t want their ads to run next to content that promotes terrorism, exploitation of children, spam or hate speech,” said Elizabeth Banker, vp of legal advocacy at tech lobbying group Chamber of Progress. Platforms currently make efforts to moderate content, despite this being a Herculean task, and people believe more can be done. YouTube has removed more than 1.26 billion comments, 99.5% of which were spam—and more than 3.8 million channels, 89% of which were spam. Twitter has suspended over half a million spam accounts per day—more than 130 million in the first half of 2021. The platform also recently announced its misinformation policy to combat false reporting on the Ukraine war. “We’d have to allow a huge amount of content [to exist on the platform] that is currently removed on a daily basis,” Banker said. “The predictable result [of the Texas social media law] is that users and advertisers will leave the platforms in droves, resulting in irretrievably lost goodwill and reputation,” the application from the IAB said. What other concerns are there? As with most content moderation, it's woolly. Although the Texas law exempts content that is prohibited by the federal law—such as violence on the grounds of racism—the subjective nature of these topics concerns tech lobbyists. Even if the platforms deem content to be unlawful, lawmakers may see it as otherwise and push back on pulling it down. Instead, lobbyists believe platforms should be subject to the same policies as television and radio broadcasters, to have standards that show which content they allow in order to have the best experience. However, offering a glimmer of hope, the Texas law closely resembles the Florida social media law SB 7072, which was challenged and deemed unconstitutional by the District Court. The state of Florida appealed that decision to the 11th circuit who, in recent days agreed the law was unconstitutional. “And this is relevant for the Supreme Court matter just because it suggests that there would be a potential circuit split, which makes it more likely that the Supreme Court would ultimately take up the case,” said Banker. The Social Media NUDGE Act Takes a Different Tack With Content Moderation

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Why More Companies Are Opposing the Texas Social Media Law

Lobbyists fear that if the law is passed, advertisers will leave in droves

Trishla Ostwal

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Trishla Ostwal