The Supreme Court temporarily blocked a Texas law from taking effect that would ban large social media companies from "censoring" viewpoints.
If the law eventually goes into effect, it will force social media companies to change how they moderate posts, which would likely exacerbate problems with misinformation and hate speech.
A federal appeals court will hear the full challenge to the Texas law. But it's likely the case will end up back at the Supreme Court, where justices will balance the First Amendment rights of individuals and companies.
Social media giants may have won an important victory earlier this week to stop a Texas law from going into effect that would have restricted their ability to moderate content on their platforms. But the battle is far from over and could spell trouble for companies like Facebook, Google and Twitter.
On Tuesday, the Supreme Court temporarily blocked a Texas law that would've prohibited large social media companies from banning users or blocking posts based on political views. The court's decision puts the law on hold for now while a constitutional challenge proceeds in a lower court.
Though the court's decision is a big win for the internet companies, the narrow 5-4 ruling and written dissent from three conservative justices suggests that a ruling on the merits of the case might go in favor of the Texas law.
The court's decision to temporarily block the Texas law comes as politicians in Congress and in statehouses across the country look to regulate social media giants like Facebook and Twitter. In recent years, social media sites have battled a flood of troubling content, including disinformation regarding the coronavirus vaccines, the outcome of the US presidential election and the deadly attack on the US Capitol. They've also faced allegations that platforms such as Facebook have knowingly been serving up harmful and divisive content to users to drive engagement.
Republicans have widely called for reforms because of their perception that the Silicon Valley powerhouses are biased against conservative views and work to censor conservatives, like former President Donald Trump, while giving liberal politicians a pass. Democrats agree that reforms are needed, but they see the problem differently, arguing that social media companies should be doing more to moderate their platforms, such as taking down or limiting hate speech and misinformation.
Much of the debate around how or if tech companies should be held responsible for content on their platforms has centered on a 25-year-old provision in a federal law. Section 230 of the Communications Decency Act shields social media companies from lawsuits over content their users post, as well as liability for how they moderate the content. Though Congress has held many hearings, and dozens of bills have been introduced to amend Section 230, nothing has passed at the federal level.
This has led to states such as Texas and Florida passing their own legislation to deal with perceived problems. And with these latest developments in the US Supreme Court, more states may take similar action.
Here's what the Supreme Court decision means for social media companies, their content moderation practices going forward and how it all affects you.
What happened at the US Supreme Court last week?
The Supreme Court ruled in a 5-4 decision to grant an emergency stay request from the tech industry to prevent a Texas law from going into effect. This ruling overturned the 5th Circuit ruling that had lifted an earlier injunction from a Texas district court. The district court hasn't yet ruled on the underlying merits and constitutionality of the case.
What this means is that the law won't take effect while the case winds its way through the appellate courts.
What would the Texas law do?
The Texas law, known as HB 20, would allow the state of Texas and individual Texans to sue companies if they "censor" their viewpoints on social media by banning them, blocking them, removing their posts, deprioritizing their posts or otherwise discriminating against their posts on social media.
The law also requires that social media companies publicly disclose how they moderate content and how they use search, ranking or other algorithms.
The law applies only to social media companies with 50 million users or more, which includes companies such as Facebook, Twitter, Google's YouTube, Snap and TikTok.
What is the significance of this case?
The Texas law could drastically change the way social media companies operate. The law would restrict how these companies police their platforms and weed out hate speech, disinformation or other content that violates their terms of service.
The tech industry and its supporters, which include the NAACP and groups representing LGBTQ people, have warned that the law could lead to a flood of violent and extremist rhetoric that could be considered political "viewpoints" on platforms, such as Facebook, Twitter and YouTube.
The social media platforms argue that the Texas law violates their right to free speech under the First Amendment. Since they're private companies, and not government entities, they argue they have a right to control what content is distributed on their websites and platforms.
"We are encouraged that this attack on First Amendment rights has been halted until a court can fully evaluate the repercussions of Texas's ill-conceived statute," Matthew Schruers, president of the Computer and Communications Industry Association, which filed the petition, said in a statement. CCIA's members include Facebook, Twitter and Google.
But the Texas AG argues that because of their vast reach, social media giants are quasi-government entities that operate a common space, much like the "common carrier" telephone networks. Therefore, they should be required to allow all viewpoints on their platforms without censorship.
Do companies actually have First Amendment rights?
The short answer is yes. But what's considered speech? And to what extent do those protections hold when balancing the rights of individual citizens? These are some of the questions that the courts are grappling with now.
Social media companies argue that their content moderation and the algorithms used to rank posts are a form of expression protected from government interference under the US Constitution. The states argue that the platforms themselves are so big and powerful that they're interfering with the free speech rights of individuals. The courts will have to decide where the line should be drawn in balancing these rights.
Which Supreme Court Justices voted for and against the stay?
Chief Justice John Roberts, along with Justices Stephen Breyer, Sonia Sotomayor, Brett Kavanaugh and Amy Coney Barrett granted the stay. But the majority didn't issue a written opinion on the case, so it isn't clear on what basis they made this decision.
Justice Samuel Alito wrote a dissent that was joined by Justices Clarence Thomas and Neil Gorsuch. Justice Elena Kagan also dissented, but she didn't join Alito's dissent nor did she explain her own reasoning.
It sounds like this was a clear victory for the tech companies. Why would there be concern for these companies going forward?
There are several reasons why social media companies should worry. For one, the three conservatives in the majority -- Roberts, Kavanagh and Coney-Barrett -- didn't offer any reasoning behind their decision to uphold the stay. Experts suggest this might mean the justices may favor hearing the merits of the constitutional challenge should the case continue to wind its way through the federal appeals process.
The second reason for concern is that the three conservative justices who dissented did offer their reasoning and it seemed to agree with the Texas Attorney General's argument that because the law is limited to companies with "50 million active users in the United States," it "applies to only those entities that possess some measure of common carrier-like market power and that this power gives them an 'opportunity to shut out [disfavored] speakers.'"
The third reason for concern is that since there was no written opinion of the majority, the Court didn't send a clear signal to the states to stop efforts to regulate speech on private platforms. This might encourage more states to move forward with legislation to regulate speech on social media.
"We would not be surprised to see other states do so, as the sentiment behind the techlash continues to drive political action," New Street Research analyst Blair Levin said in a note to investors.
Do other states have a similar law?
Florida has a similar social media law (SB 7072). That law is also being challenged as unconstitutional in federal court. Last week, the 11th US Circuit Court of Appeals upheld a stay preventing the law from going into effect while the merits of the case are being argued and decided. Similar bills have also been introduced in the GOP-controlled legislatures of Michigan and Georgia.
Experts say it's likely other states will consider similar legislation.
"Given this signal, we suspect other states will pass Texas-like laws, which would keep this in the headlines," Paul Gallant, an analyst with Cowen Washington Research Group, wrote in a note to investors. "And given conservatives' unhappiness with Apple/Google deplatforming Parler in early 2021, we wouldn't be surprised to see app stores included in some state laws."
Apple and Google removed the conservative social media service in January 2021 from their app stores for allowing inflammatory posts about the Capitol Hill insurrection. The service was eventually allowed back into both app stores, but conservative lawmakers pointed to the removals as proof that Big Tech companies have an anti-conservative bias despite a lack of evidence behind those allegations.
Read more: Parler Returns Online After Monthlong Absence: Here's What You Need to Know
What's the next step for this case?
The Fifth Circuit will now hear the Internet companies' full challenge to the Texas law. Its decision could be issued in the fourth quarter, Gallant said. That court has already signaled it's leaning toward affirming Texas' law.
But many experts say that with the Florida case making its way through the 11th Circuit and the Texas law in the Fifth Circuit, there's a good chance this issue of whether these laws violate the First Amendment rights of social media companies is likely to wind up at the US Supreme Court.