Katherine Tangalakis-Lippert
Fri, December 29, 2023
Elon Musk's X sued to stop a new California law from going into effect, citing free speech concerns.
The law, which regulates online content moderation, will go into effect anyway, a judge ruled.
Now X will be required to disclose annual reports about hate speech and extremism on the platform.
An attempt by Elon Musk's X to stop a new California law from going into effect was shot down by a federal judge on Thursday, signaling that the billionaire's social media platform will be accountable to a new set of rules about online content moderation despite the company's efforts to avoid such regulation.
The bill, AB 587, was signed into law by Gov. Gavin Newsom last November. It requires social media companies with over $100 million in annual revenue to publicly post their terms of service, including information about how content is moderated on the platform. It also requires qualifying companies to submit two reports each year to the state's Attorney General, detailing statistics about actions taken by the company to moderate hate speech or racism, extremism or radicalization, disinformation or misinformation, harassment, and foreign political interference.
X filed suit against the state of California in September, arguing the bill violates the social media company's freedom of speech under both the First Amendment and California's state constitution, writing in the initial complaint that AB 587 "compels companies like X Corp. to engage in speech against their will."
"AB 587 seeks to force social media companies to provide the Attorney General and the public detailed information about how, if at all, they define and moderate the boundaries of the most controversial categories of content," the company argued in its suit. "Put another way, through AB 587, the State is compelling social media companies to take public positions on controversial and politically charged issues."
On Thursday, a judge disagreed and shot down X's petition for a preliminary injunction, which would have halted implementation of the law.
"While the reporting requirement does appear to place a substantial compliance burden on social media companies, it does not appear that the requirement is unjustified or unduly burdensome within the context of First Amendment law," US District Judge William Shubb wrote in his decision.
He added: "The statistics required if a company does choose to utilize the listed categories are factual, as they constitute objective data concerning the company's actions. The required disclosures are also uncontroversial. The mere fact that the reports may be "tied in some way to a controversial issue" does not make the reports themselves controversial."
Representatives for X did not immediately respond to a request for comment from Business Insider.
Since Musk's $44 billion takeover of the social media platform formerly known as Twitter, he declared himself a "free speech absolutist" and took aim at content moderation policies on the site, laying off a portion of the site's trust and safety team.
Under Musk's leadership, X has re-instated the accounts of users who had violated the app's old rules about inciting violence and spreading misinformation, including Donald Trump, comedian Kathy Griffin, and "manosphere" influencer Andrew Tate.
Musk himself has also engaged in a war with advertisers, calling them the "greatest oppressors" of free speech after multiple big brands pulled their content from X. The advertiser exodus followed reports of surging antisemitism on the site and a controversial post by Musk that suggested that the "great replacement theory" (often levied against pro-immigration Jewish populations) was "the actual truth."
He has since apologized for the tweet, which was widely regarded as antisemitic.
Elon Musk’s X Loses Bid to Undo California Content Moderation Law
Charisma Madarang
Thu, December 28, 2023
Elon Musk’s X failed to block a California law that requires social media companies to disclose their content-moderation policies.
U.S. District Judge William Shubb rejected the company’s request in an eight-age ruling on Thursday.
“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, per Reuters.
The legislation, signed into law in 2022 by California Gov. Gavin Newsom, requires social media companies to publicly issue their policies regarding hate speech, disinformation, harassment and extremism on their platforms. They must also report data on their enforcement of these practices.
“California will not stand by as social media is weaponized to spread hate and disinformation that threaten our communities and foundational values as a country,” Newsom said in a statement at the time. “Californians deserve to know how these platforms are impacting our public discourse, and this action brings much-needed transparency and accountability to the policies that shape the social media content we consume every day.”
X, formerly Twitter, sued the state in September and argued that the law violated free speech rights protected under the U.S. Constitution’s First Amendment and California’s state constitution.
After Musk acquired Twitter for $44 billion in 2022, he promised advertisers that the company would not become a “free-for-all hellscape” once he was in charge. A few months after the billionaire took ownership of the social media platform, The New York Times released a report showing that hate speech on the platform had risen dramatically his takeover.
In November, a report by the watchdog group Media Matters found that ads for brands like Apple, Bravo, and Amazon had appeared on X next to white nationalist hashtags such as #WLM (White Lives Matter) or #KeepEuropeWhite. Following the report, X advertisers Disney, Apple, Lionsgate, Comcast/NBCUniversal, and IBM severed ties with the platform.
Rolling Stone
Musk’s X loses bid to block California content moderation law
Nick Robertson
THE HILL
Fri, December 29, 2023
Social media giant X, formerly Twitter, lost its bid to block a California content moderation law on Friday, with a federal judge dismissing the company’s challenge.
The company claimed the California law violated its free speech rights by requiring it to publicly post its policies and report data on hate speech, disinformation, harassment and extremism online.
District Judge William Shubb ruled the law’s reporting requirements should be considered corporate speech, which can be more closely regulated by the government.
“The mere fact that the reports may be ‘tied in some way to a controversial issue’ does not make the reports themselves controversial,” Shubb wrote. “While the reporting requirement does appear to place a substantial compliance burden on social media companies, it does not appear that the requirement is unjustified or unduly burdensome within the context of First Amendment law.”
The moderation law came under fire from tech leaders when it was first proposed last year. Florida and Texas have pursued similar reporting requirements for tech companies.
“California will not stand by as social media is weaponized to spread hate and disinformation that threaten our communities and foundational values as a country,” California Gov. Gavin Newsom (D) said when the measure was unveiled last year.
“Californians deserve to know how these platforms are impacting our public discourse, and this action brings much-needed transparency and accountability to the policies that shape the social media content we consume every day,” he added.
X owner Elon Musk has severely cut back content moderation on the social media platform since he purchased it last year. The lack of moderation has caused advertisers to flee the site and launched legal inquiries into company practices.
The European Union launched a probe into X this month to investigate whether the company broke its content moderation laws.
Musk’s X Fails to Block California Content Moderation Law
Fri, December 29, 2023
Social media giant X, formerly Twitter, lost its bid to block a California content moderation law on Friday, with a federal judge dismissing the company’s challenge.
The company claimed the California law violated its free speech rights by requiring it to publicly post its policies and report data on hate speech, disinformation, harassment and extremism online.
District Judge William Shubb ruled the law’s reporting requirements should be considered corporate speech, which can be more closely regulated by the government.
“The mere fact that the reports may be ‘tied in some way to a controversial issue’ does not make the reports themselves controversial,” Shubb wrote. “While the reporting requirement does appear to place a substantial compliance burden on social media companies, it does not appear that the requirement is unjustified or unduly burdensome within the context of First Amendment law.”
The moderation law came under fire from tech leaders when it was first proposed last year. Florida and Texas have pursued similar reporting requirements for tech companies.
“California will not stand by as social media is weaponized to spread hate and disinformation that threaten our communities and foundational values as a country,” California Gov. Gavin Newsom (D) said when the measure was unveiled last year.
“Californians deserve to know how these platforms are impacting our public discourse, and this action brings much-needed transparency and accountability to the policies that shape the social media content we consume every day,” he added.
X owner Elon Musk has severely cut back content moderation on the social media platform since he purchased it last year. The lack of moderation has caused advertisers to flee the site and launched legal inquiries into company practices.
The European Union launched a probe into X this month to investigate whether the company broke its content moderation laws.
Musk’s X Fails to Block California Content Moderation Law
Peter Blumberg and Malathi Nayak
Fri, December 29, 2023
(Bloomberg) -- 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.”
The office of California Attorney General Rob Bonta said it was pleased with the ruling.
The attorney general “will continue fighting for this commonsense law, which requires social media companies with annual gross revenues of at least $100 million to publicly disclose information about their content-moderation policies,” a spokesperson for Bonta said Friday in an email.
Representatives of X Corp. didn’t respond to a request 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.
Read More: Musk’s X Sues to Block California Anti-Hate Speech Law
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.
©2023 Bloomberg L.P.
Musk's X loses legal challenge to California content law
Angel Smith and Brad Smith
Fri, December 29, 2023
Elon Musk's social media platform X, formerly Twitter, has lost a legal bid to block a California state law requiring disclosure of content moderation practices. The failed challenge comes amid growing backlash over misinformation and insensitive content gaining steam on X after Musk's takeover.
Yahoo Finance's Brian Sozzi and Brad Smith break down the details, touching upon Musk's juggling of responsibilities across his other companies and X CEO Linda Yaccarino's leadership role in 2024.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
BRAD SMITH: Elon Musk's X is facing some legal setbacks in California. X, formerly known as Twitter, lost a bid challenging a state law mandating social media platforms to publicly disclose how they moderate content. The company tried overturning the law back in September of this year.
BRIAN SOZZI: Well, Brad, yeah, this one is really is an interesting one to watch from the standpoint is first, is this stabilize-- does this platform stabilize at some point next year? And if it does, do advertising dollars finally start to come back into the likes of Twitter slash X.
Because a lot of studies right now, a lot of research that is hitting into yearend, suggests a lot of ad dollars are flowing into LinkedIn, Meta, Instagram, you name it. And why is this important for Musk to get these dollars back? Because he can't be distracted anymore. I think it's very important for him to stay focused on delivering what he needs to deliver at Tesla because that-- that stake in Tesla, that value in Tesla essentially drives whatever he does, whether it's SpaceX, X, you name it.
BRAD SMITH: Here, the money is not going to flow back in droves and here's why. When you've got a replay video that any CEO or investor or perhaps not even investor, any marketer or advertiser who's overseeing millions of dollars in ad campaigns that gets spent on social media, you look at X, you look at the platform, you say it is a cesspool of some of the worst thoughts and perpetuation of just slander that has started to really unfold under Musk's leadership.
And I use leadership very kind of liberally in this because at the end of the day, anytime you have a CEO or a head of a company, a holding company that has Twitter underneath of it, telling its customers to go F themselves, who is going to--
I mean, there's an old book out there that's-- I believe it's titled "Hug Your Customer" or something like that. This is the exact opposite of hugging your customer. This is telling your customer that, hey, if you're going to try and move your dollars away from me for one reason or another because you don't agree with me, well, then you know what? I don't need you. It turns out you actually do at the end of the day.
And I think for other companies that are going to be able to capitalize on that. You mentioned LinkedIn, subsidiary of Microsoft. We can also think about Snapchat or Pinterest-- two of the other names that perhaps could see even more of that time spent going to their platform and also some of those ad dollars as well.
BRIAN SOZZI: One thing to watch I think going into next year, Brad, is if an X CEO Linda Yaccarino actually survives the year. Now, this is-- Linda is an incredibly accomplished industry executive with very deep contacts and deep knowledge of her industry.
At what point does she just have enough of Musk and decides this is not where she wants to spend the next year or two, three years of her life and her career. Because if she does, she may not have-- it hurts her reputation tremendously in all the many years she has put into crafting her space in this industry.
BRAD SMITH: 100% agree.
Elon Musk's X is seeing an exodus of ad dollars — and LinkedIn is picking up some of that revenue
Lakshmi Varanasi
Fri, December 29, 2023
Demand for digital advertising on LinkedIn is rising as brands leave X.
LinkedIn saw a 10% jump in US ad revenue from 2022 to 2023, according to Insider Intelligence.
Meantime, X's US ad revenue dropped more than 50% this year, per Insider Intelligence.
Professional networking platform LinkedIn is seeing a surge in demand for digital advertising space from brands — especially those looking to part ways with Elon Musk's X. And it's helping the company charge more.
"This is LinkedIn season," Leesha Anderson, vice-president of digital marketing and social media at Outcast ad agency, told the Financial Times. "Most have switched over to LinkedIn over the past year… A few weeks ago most of our clients were off X. Now they are all off X."
Over the past several weeks, there's been a mass exodus of advertisers from X. Major companies from IBM to Apple to Disney have pulled ads from the platform following reports they were being displayed next to pro-Nazi posts and that Musk was doubling down on antisemitic comments.
And while Musk told departing advertisers they could go "f--k" themselves, LinkedIn seems to have presented itself as a more hospitable alternative, telling brands they could "work with a partner who respects the world you operate in," according to a pitch deck seen by the FT.
LinkedIn's US advertising revenue for 2023 will come in at close to $4 billion — marking a 10% jump from 2022, according to estimates from Insider Intelligence, which is owned by Business Insider's parent company. And that number is likely to swell next year to about $4.56 billion.
Meanwhile, X is on pace to bring in $1.89 billion in ad revenue in the US this year, representing a 54% drop from 2022, according to Insider Intelligence.
The influx of digital advertisers has helped drive up LinkedIn's ad prices, which are usually determined by an auction. In some cases, the competition has pushed up prices by as much as 30% over the past year, one executive told the FT. LinkedIn did not comment on how many digital advertisers it serves, but a spokesperson told BI that the number has doubled in the past five years.
Still, X and LinkedIn remain smaller players in the digital advertising space. X accounted for a mere 0.4% of total digital ad spending in the country this year, while LinkedIn accounted for just 1.5%, according to Insider Intelligence. Ad giants like Google and Meta brought in close to 27% and 21% respectively.
X did not respond to BI's request for comment.
Business Insider
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