Elon Musk's X Corp sues California over new social media law

The suit questions free speech, government regulation, and hate speech online.
Rizwan Choudhury
A partially removed sign at Twitter headquarters in San Francisco.
A partially removed sign at Twitter headquarters in San Francisco.

Source: Bloomberg/Getty Images 

Elon Musk's X Corp, previously known as Twitter, has filed a lawsuit against the State of California, objecting to a recently enacted law—Assembly Bill 587—that mandates enhanced transparency measures for social media companies. This legal action has sparked a contentious debate about the balance between free speech and regulating online hate speech or misinformation.

The legislation in question requires social media companies with gross annual revenue exceeding $100 million to issue semiannual reports detailing their content moderation policies. Additionally, these companies are obliged to provide copies of their terms of service to users. Non-compliance with the law could result in civil fines amounting to $15,000 per violation per day.

Allegations against Assembly Bill 587

According to Reuters, X Corp has lodged a formal complaint in a federal court in Sacramento, contending that the recently enacted law infringes on its constitutional rights to free speech under both the First Amendment of the U.S. Constitution and the California State Constitution. The organization further alleges that the law's "true intent" is to coerce social media platforms into censoring content that the state finds objectionable, thereby constituting "a form of compelled speech in and of itself," as per X Corp's assertion.

This lawsuit comes nearly a year after Musk, the world's richest person and a self-described "free speech absolutist," acquired Twitter for $44 billion. Following the acquisition, he implemented dramatic changes, including laying off several employees responsible for content moderation. Musk also restored some accounts that the previous management had banned.

These changes have led to a notable surge in hate speech on the platform, targeting various communities such as Jews, Black people, gay men, and trans people, according to reports from organizations like the Anti-Defamation League and the Center for Countering Digital Hate.

California’s response

California Governor Gavin Newsom signed Assembly Bill 587 into law last September, stating that the state could not allow social media to be "weaponized" for spreading hate and disinformation. The office of California Attorney General Rob Bonta, responsible for enforcing state laws, has confirmed that it will respond to the lawsuit in court.

In the backdrop of this legal battle, Musk has blamed critics, including the Anti-Defamation League, for a 60% decline in U.S. advertising revenue on the X platform. A.J. Brown, former head of brand safety and ad quality at X, recently revealed that changes limiting the visibility of objectionable content rather than removing it have made it challenging to reassure advertisers about the platform's safety.

National developments: First Amendment controversy

In a related development, the Biden administration also finds itself embroiled in a First Amendment controversy. The Fifth US Circuit Court of Appeals ruled on Friday that the White House, along with other agencies, “likely violated the First Amendment” by significantly encouraging social media platforms to moderate content related to COVID-19. This decision narrows the scope of an earlier district court order led by Judge Terry Doughty, a Trump appointee, who had held that there was likely collusion between the Biden administration and Big Tech to censor protected speech during the pandemic.

As both federal and state authorities grapple with the complexities of free speech and content moderation, the lawsuit filed by X Corp against California's Assembly Bill 587 serves as a critical moment, raising questions about how much control the government should exert over social media companies.

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