How Texas’ social media law could affect online speech

A Texas law banning social media companies from applying certain content moderation policies was recently upheld by the 5th U.S. Circuit Court of Appeals. The 2021 law prohibits platforms from banning or restricting content based on the “viewpoints” of users.

Now, tech companies will have to appeal to the Supreme Court if they want to avoid legal risk in the state.

Marketplace’s Kimberly Adams spoke about this case on the show back in May, when the Supreme Court put the implementation of the law on hold while the case ran its course.

Issie Lapowsky, chief correspondent at Protocol, helped Adams then and joins her again for an update. She says tech companies are in a tough spot. The following is an edited transcript of their conversation.

Issie Lapowsky: The biggest decision is whether [tech companies] act now or wait until the Supreme Court rules on this. And that’s what I think they’re all sort of holding their breath and waiting for because the big thing to remember is while this law in Texas can go forward, there’s a very similar law in Florida that was blocked by the 11th Circuit. And so what we have now is a circuit split. And that’s just the sort of thing that the Supreme Court is supposed to come in and sort of do a tie break on. In the meantime, in Texas, they’re a little bit vulnerable to a whole bunch of lawsuits alleging discrimination.

Kimberly Adams: How enforceable, though, is this law for these companies, especially those that aren’t headquartered in Texas?

Lapowsky: It’s not about their headquarters in Texas, it’s about their operations in Texas. So that’s another big question they face: Is this a situation where they can just wall off Texas and do what they do in some countries where it’s too difficult to do business and just not operate there? The law considers that option and says that not only can these companies not discriminate on the basis of viewpoint, [but] they can’t engage in geography-based censorship. So in other words, you can’t censor somebody or not let them use your platform just because they live in Texas. Now, that brings into the picture a whole bunch of legal questions. If Texas can do that, can any state force any business to do business in that state? I mean, once you start pulling on that thread, the whole thing kind of unravels. But it’s not like they’re going to be able to just pull out of Texas and stop serving people in Texas without a fight.

Adams: This law, HB 20, intends to prohibit social media platforms from moderating people’s “viewpoints.” But then, how are these companies responding to this concept of what constitutes a viewpoint versus, say, hate speech or something like that?

Lapowsky: Well, they haven’t really responded yet in terms of changing their policies because I think they say the First Amendment is on their side. They also point to Section 230 [of the Communications Decency Act], which is a provision you’ve heard a lot about that gives these companies a lot of space to moderate content as they see fit. So they feel that these two laws are really on their side, and so they’re not going to radically change their operations just yet because it could be quite soon that the Supreme Court sort of puts the kibosh on this Texas law again.

Adams: And do you think that’s likely, that the Supreme Court will side with the tech companies?

Lapowsky: Well, we’ve already seen some decisions from the Supreme Court regarding this law. Remember, it was the Supreme Court that came in on its shadow docket and blocked this law from going into effect because initially the 5th Circuit wanted the law to go into effect before it even reached a decision on the law. But there was, I think, sort of a surprising amount of support for the Texas law on the Supreme Court. But still, the majority voted to block that law. And it has been, historically, conservative justices in the past who have sort of stood up for the First Amendment rights of corporations, usually, as it has to do with how they spend their money. So I think there is a lot of faith still that that part of the conservative bench still exists and that, certainly, the liberal-leaning justices would oppose this law as well.

Adams: What does this law mean for app stores that host social media apps and companies? We’ve talked a lot about what this might mean for, say, a Facebook or a Twitter. But what about for the Google app store or Apple’s app store?

Lapowsky: Yeah. So the law doesn’t directly affect those companies. It’s really about platforms that host user-generated content. But these companies are going to have to consider what they’ll do if, for instance, Facebook all of a sudden stops moderating some really bad stuff in Texas because these companies have set a precedent already, where they have kicked out social media companies like Parlor and [Donald] Trump’s Truth Social because they have not had strong enough content moderation rules. And so the app stores have said, “Well, we don’t want to host your app in our app store.” What happens when that app is not Parlor, but it’s Facebook? So that’s a decision they’re going to have to make once they see how the apps respond in Texas.

Adams: In your piece for Protocol on this, you lay out all these potential outcomes, most of which are bad for tech companies, but you also highlight what this might mean for advertisers.

Lapowsky: I think it’s important to think about how advertisers will react in that same scenario where Facebook is — or name your social media company — is suddenly allowing really horrible stuff, even more so than they arguably already do by accident or in some cases when they face really tough decisions. But most of the time, they’re trying to make sure that there’s not overt hate speech and there’s not overt violence and all other types of objectionable content on their platforms. Advertisers have in the past protested these companies when they felt like they’re not doing their job. You’ll remember in 2020, during the racial justice protests, there was a mass advertiser protest under the banner of “Stop hate for profit,” where tons of brands stopped advertising on Facebook. We’ve seen the same happen on YouTube when there have been big news stories about ads appearing alongside extremist videos. So if it becomes sort of the Wild West in Texas, if it becomes this sort of content free for all, will advertisers still want to run their ads alongside that kind of content?

Related links: More insight from Kimberly Adams

For more on what this Texas law could mean for social media companies and the options Big Tech has while it stands, here is Lapowsky’s article for Protocol.

You can also revisit the interview we did back in May, where she talked more about the differences between the Texas and Florida laws.

A piece from the Bipartisan Policy Center explains Section 230 of the Communications Decency Act of 1996, which Lapowsky mentioned earlier. The article lays out the ongoing debate over whether, and to what extent, social media companies should be pro-content moderation or anti-censorship.

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