State lawmakers mull costs, benefits of social media control

The state Senate Judiciary Committee heard this week from law professors and industry representatives favoring and opposing government regulation of social media, with topics ranging from the cost of such measures to calls for stricter transparency mandates.

“The issues we look to tackle and better understand today have been around for some time and have grown exponentially over the last few years,” the committee chair, Sen. Tom J. Umberg, D-Santa Ana, said in his opening remarks on Tuesday. Umberg, who is an attorney, pointed to proliferation of misinformation, foreign interference in democracy, human trafficking and hate speech as related concerns.

The informational hearing focused on the influence of the First Amendment and Section 230 of the U.S. Communications Decency Act on efforts to hold social media companies accountable for offensive, misleading or harmful content posted on their platforms.

Professor Daphne H. Keller of Stanford Law School spoke first on the challenges of regulating social media companies while avoiding overreach.

“My message is not that the First Amendment leaves lawmakers powerless to regulate platforms,” Keller said. “There is considerable room for new laws, particularly in the sphere of privacy competition, and I think we need those laws.”

However, Keller said, several states have crafted legislation contradicting U.S. Supreme Court jurisprudence, while others propose laws with a high likelihood of being struck down due to constitutional protections on lawful speech.

“The Supreme Court has explicitly said recently that hate speech is constitutionally protected,” Keller said. “We also know that lies, including dangerous lies, are often constitutionally protected.”

Keller also questioned whether the fiscal costs of wide-ranging transparency mandates outweighed the potential benefits.

“The complexity and expense of transparency reporting are very real, particularly for small companies,” Keller said. “If we’re going to impose that cost and accept the burden it may place on competition and the diversity of the online speech ecosystems, we should have a clear idea of what benefits we’re getting, and what particular kinds of disclosure are likely to get us there.”

Speaking to the potential expenses of regulation, Anti-Defamation League attorney Lauren T. Krapf argued that the cost of transparency reports could easily be borne by billion-dollar social media companies, and would provide valuable insight into combating misinformation on their platforms.

“Currently, most social media platforms already track much of the information we are seeking,” Krapf said. “If we reform transparency, the relatively small quarterly cost of compliance would be offset by the enormous benefit to public safety.”

Meanwhile, professor Eric Goldman of Santa Clara University School of Law argued that while any regulations imposed by the Legislature would need to account for Section 230 of the Communications Decency Act, which protects social media companies from liability for content posted to their platforms, congressional law still leaves room to regulate content under the section.

“Congress created several categories where internet services remain liable for third-party content without running afoul of Section 230,” Goldman said. “From the beginning Section 230 excluded three types of claims: Electronic Communications Privacy Act and state law equivalents, intellectual property claims and federal criminal prosecutions.”

The committee also heard testimony from professor Kate Klonick of St. John’s University School of Law in New York, who spent time investigating Facebook’s regulatory policies, specifically a recently created oversight board.

“I think I can say now that the Facebook oversight board has been a pretty incredible success in terms of starting to create a culture of transparency,” Klonick said of the independently funded, 20-person committee.