Social media companies who have "nothing to hide" should not fear California's content moderation law, state lawyer says

An attorney for X Corp. and a federal judge clashed in court over the question of what California's social media content moderation law actually demands.

Meanwhile, a UC Berkeley Institute for Government Studies poll released on Tuesday showed high levels of support for the state government regulating social media companies.

"At first blush the law at issue may seem like an innocuous transparency measure," attorney Joel Kurtzberg told U.S. Senior District Judge William B. Shubb at the outset of a hearing Monday over the company's bid to enjoin AB 587.

Kurtzberg, a partner and co-chair of the First Amendment & Media Litigation practice at Cahill Gordon & Reindel LLP in New York, said the court should enjoin the law because it discriminates by "content and viewpoint" and imposes "significant costs" on social media companies. X Corp. v. Bonta, 2:23-cv-01939-WBS-AC, (E.D. Cal., filed Sept. 8, 2023).

Gov. Gavin Newsom signed AB 587 last year. The law mandates social media companies with at least $100 million in "gross annual revenues" to post their content moderation policies. Beginning next year, companies must submit semiannual reports to the California Department of Justice on their moderation activities. Companies found in violation can be fined up to $15,000 a day.

Kurtzberg said the law violates the First Amendment because it will be used to influence platforms to suppress certain viewpoints but not others. He cited a letter Attorney General Rob Bonta sent after the passage of the law last year to express his "concern about the ongoing spread of disinformation and misinformation through social media platforms operated by your companies."

That letter went to the top executives of just five companies: Meta Platforms, Inc., YouTube, Inc., TikTok Inc., Reddit Inc. and Twitter Inc., which owner and chairman Elon Musk renamed X Corp. in April. Bonta warned the spread of violent rhetoric online demands "greater corrective action" and that the "California Department of Justice will not hesitate to enforce these laws against any individual or group that violates them."

Shubb asked Kurtzberg if he was concerned the law "is targeted at your client?"

"We are not making an argument that it is a law targeted only at X Corp.," Kurtzberg replied.

Instead, he said, the concern is that it "allows the government to apply pressure to social media companies."

Shubb was skeptical.

"This particular bill doesn't compel your client to do anything but report facts," he said.
He later added, "AB 587 doesn't require any of the things you say it requires. The Attorney General may be making a threat, but I don't know what he's talking about."

Deputy Attorney General Gabrielle D. Boutin was a spectator for much of the lengthy afternoon hearing. Speaking late in the day, she said consumers deserve to know what content moderation policies companies enforce and that these companies should have "nothing to hide."

"I applaud Attorney General Bonta for his vigorous defense of AB 587, a straightforward transparency measure that simply requires social media companies to disclose basic information about if and how they are moderating content on their platforms," Assemblyman Jesse Gabriel, D-Encino, said in a statement before the hearing. "Consumers deserve to know the truth about these policies so that they can make informed decisions. If Elon Musk has nothing to hide, then he should have no objection to this bill."

Shubb might be inclined to agree. He said he didn't think the law regulated "commercial speech." He also sounded skeptic of Kurtzberg's concerns about AB 587's requirement that companies include information about hate speech, racism, extremism, disinformation, harassment and foreign political interference in their reports.

"They don't define hate speech," Shubb said. "They don't define anything."

Shubb and Kurtzberg also engaged in a long back and forth about recent case law and what level of scrutiny should apply to AB 587. Kurtzberg argued Shubb should apply strict scrutiny, but added that "the law fails under any level of scrutiny."

Kurtzberg urged Shubb to consider a federal court's decision to enjoin a similar New York State law in February. The case, filed by UCLA School of Law Professor Eugene Volokh, claimed New York's Online Hate Speech Law has "one goal: to silence disfavored -- but constitutionally protected -- expression."

U.S. District Court Judge Andrew L. Carter, Jr. dismissed the plaintiffs' claims under Section 230 of the federal Communications Decency Act but had "demonstrated a substantial likelihood of success on the merits of their First Amendment claims." That case is ongoing. Volokh v. James, 1:22-cv-10195-ALC (S.D. N.Y., filed Dec. 1, 2022).

AB 587 passed by wide margins, picking up votes from several Republicans. State voters are also supportive of regulating social media companies, according to the Berkeley poll. While the poll didn't directly ask about the law, it found 73% of respondents "agree that state government has a responsibility to act to protect voters and the public that these technologies pose in next year's elections."

The poll also found 84% are concerned "about the dangers that disinformation, deepfakes and artificial intelligence pose in next year's elections;" 87% said "social media platforms should be required to clearly label deepfakes and AI-generated audio, video, and images that appear on their websites." Large majorities in all political persuasions agreed social media companies had harmed the political discourse by spreading false information.