Elon Musk's X fails to block US content moderation law on disclosure

By Peter Blumberg and Malathi Nayak

Elon Musk’s X Corp. lost its effort in court to block a California law that seeks to control toxic posts on social media by requiring companies to disclose their content-moderation polices.
 

In an eight-page ruling Thursday, a federal judge in Sacramento rejected arguments by the company formerly known as Twitter that the measure violates the free-speech rights of social media platforms.

The ruling comes after Musk ignited a firestorm in November by endorsing antisemitic posts on his platform. X Corp. Chief Executive Officer Linda Yaccarino scrambled to contain the fallout after major advertisers like Sony, Discovery, Apple and CBS stopped or paused spending on the site.

California Governor Gavin Newsom said when he signed AB 587 in 2022 that it was designed to protect the public by demanding companies reveal their policies on hate speech, disinformation, harassment and extremism on their platforms, and report data on their enforcement of the policies.

But X Corp. complained in a September lawsuit that the law’s true intent is “to pressure social media platforms to ‘eliminate’ certain constitutionally protected content viewed by the state as problematic.”

Spokespersons for X Corp. and the office of California Attorney General Rob Bonta didn’t immediately respond to requests for comment.

The US Supreme Court is considering whether Republican-backed laws in Florida and Texas violate the free-speech rights of social media companies by limiting their freedom to decide how material is presented and requiring detailed explanations for content-moderation decisions. The court will rule by the middle of 2024.

When Musk acquired Twitter for $44 billion in 2022, he vowed it would be free of censorship and reinstated formerly banned users while firing content moderators. Researchers have said that during Musk’s tenure, the platform has seen a spike in harmful content due to policy changes in content moderation.

The self-styled “free speech absolutist” went on to hire Yaccarino, who was an NBCUniversal ad executive, to help repair partnerships in the media industry and lure back advertisers.

Musk has blamed watchdog groups including the Anti-Defamation League, the Center for Countering Digital Hate and Media Matters for America for a slump in US advertising revenue on X. He said they have tried to kill the platform with false accusations about it being overloaded with harmful content. The organizations have denied Musk’s claims.

US District Judge William Shubb disagreed with X Corp.’s argument that the California law interferes with the company’s content screening process in violation of the Constitution.

“While the reporting requirement does appear to place a substantial compliance burden on social medial companies, it does not appear that the requirement is unjustified or unduly burdensome within the context of First Amendment law,” Shubb wrote in his order.