Supreme Court Upholds TikTok Law

Report from Platform Economy Insights

In Brief – The US Supreme Court decisively ruled against the First Amendment challenges of TikTok and a group of content creators against the federal law that requires the business to be sold by China-based ByteDance to a new owner not based in an “adversarial country”. The 27-page decision, available here, was per curium, meaning the justices did not release any vote or the opinion’s author.

The court determined that First Amendment “intermediate scrutiny” was the appropriate level of review, and found that the law comprehensively met that standard. “As applied to petitioners, the Act satisfies intermediate scrutiny. The challenged provisions further an important Government interest unrelated to the suppression of free expression and do not burden substantially more speech than necessary to further that interest.”

The justices, who described their ruling as “narrowly focused” due to the “expedited time allowed” for their review, paid particular attention to the massive data collection by TikTok due to the number of users and type of data collected, the congressional concern with the security implications of that data in light of the linkages between ByteDance, its TikTok business, and the “adversarial” government of China, and the fact that the law requires divestiture, not shutting down of the platform.

It has been reported that TikTok planned to shut down the service on Sunday if they lost in the Supreme Court, that the outgoing Biden Administration would not take action implementing or delaying the law and leave it to the new administration, and that the President-elect Trump will attempt to “to save” TikTok.

Supreme Court Justices Sound Amenable to Age Checks for Online Porn

Report from the New York Times

In Brief – Several members of the Supreme Court’s conservative majority appear willing to overturn a 2004 decision that prohibited requiring online pornography sites to use age verification techniques to keep underage users off their sites. The case involves a Texas law that requires commercial websites adjudged to be “more than one-third of which is sexual material harmful to minors” to use age verification. It was upheld by the Fifth Circuit Court of Appeals in a direct rejection of the High Court’s decision in Ashcroft v. ACLU and the plaintiffs largely replayed the free speech and privacy arguments that had prevailed 20 years ago, including that complying with age checks was an undue burden on adults with the right to view sexually explicit material, that they were justified in fearing giving out personal information on such sensitive activity, and that parents could protect their children by using content-filtering software. The State of Texas argued that age checking technology was vastly improved, content-filtering tools had proven a failure, and online pornography had vastly expanded and was harming young people. Justices appeared to agree the online ecosystem had changed. Chief Justice Roberts said, “Technological access to pornography, obviously, has exploded,” and “the nature of pornography, I think, has also changed.” The Fifth Circuit’s decision employed a far more relaxed legal standard than the “strict scrutiny” test the High Court has employed. Justices asked if they could rule in a manner that backed the strict scrutiny standard and still kept the Texas law in place because they believed the law met that test.

Context – The impact of this case will go beyond age verification for online pornography. State laws regulating social media use by teens operationally require age verification. This decision may impact the legal standard for them, as well as provide a snapshot into how the justices are thinking about how “the internet” is changing things. The TikTok ruling too. Finally, I’m reminded of how the FOSTA-SESTA law weakened Sec. 230 to combat “sex trafficking” and some forecast a general weakening of Sec. 230. But that has not really come to pass yet.

OpenAI Removes Political Bias Landmine from AI Policy Document

Report from TechCrunch

In Brief – OpenAI quietly edited its “Economic Blueprint” soon after release to remove language in the section on “the proper rules” for AI that called for AI models to be “politically unbiased by default”. The report is part of a public policy campaign to stress the benefits of investment in AI and the infrastructure that will power AI development, including datacenters and the electrical generating capacity that will power them. The chatbot phenom has a reputation for being pro-regulation and its government relations team has always been led by Democrats. Allegations that its chatbots were biased in favor of progressive viewpoints have plagued the San Francisco-based company from the first months it operated publicly. President-elect Trump’s crypto and AI “czar” David Sacks has singled out ChatGPT as “programmed to be woke” and untruthful about politically sensitive subjects.

Context – One big divide in AI policy has been between trying to address so-called existential risks, essentially that some super-powerful AI system will go rogue someday and destroy humanity, and more tangible near-term problems, such as AI systems fostering discrimination because the training data or algorithms are biased, or being used to further hatred, misinformation, or political division. In lieu of any AI-specific regulations policing the present-days “risks” like hateful content and discrimination, many companies building AI tools have put in “guardrails” that essentially police the tools by tailoring or blocking outputs on sensitive topics. It’s not just OpenAI. Google has been heavily criticized, especially from conservative commentators, because its generative AI services appeared to be trained and governed by guardrails that skewed left. This all parallels experiences of social media companies trying to deal with objectionable content, including repeated charges that the company efforts are ideologically biased. OpenAI’s quick retreat from discussing the inherently partisan topic of “political bias” can be chalked up with Meta’s momentous decision to change content moderation.

TikTok Reported to be Planning Full Shutdown on Sunday Absent Reprieve

Report from Reuters

In Brief – TikTok is reported to be planning to shutdown their US app on Sunday, January 19th if the US Supreme Court or Biden Administration does not issue an order delaying the effective date of the federal law requiring the company’s US operations be sold to an owner not based in an “adversarial country”. The law does not require that TikTok cease operations on the 19th. It prohibits US service providers such as app store operators from supporting the application, so that new downloads and updates would be blocked. But TikTok could argue that cutting off various support services means the app must be stopped. Anonymous sources said that TikTok would show users opening the app a pop-up message directing them to a website with information about the ban, as well as give users the option to download data related to their use of the service.

Context – The Supreme Court heard oral arguments on January 10 in the First Amendment-based legal challenges filed by TikTok and a group of creators. A US Court of Appeals panel had ruled that the law met the “strict scrutiny” legal test based on national security justifications. The expedited consideration given by the Supreme Court reflects the unprecedented US move to force a foreign-based company to sell a massive online communications service. The justices quizzed both sides and most media reports have speculated that TikTok would come out on the losing end. One question was whether the app would shut down as of the 19th, with the government saying not necessarily but TikTok’s lawyer saying it likely would. Leaking shutdown plans sends a message to the court on that one! In addition, news of potential user “grassroots” will remind DC people of the company’s grassroots lobbying of Congress last spring. It generated a lot of user anger but also seemed to energize opposition on Capitol Hill. TikTok faces very hard tactical choices weighing how their actions, possibly seen as pressure tactics by the High Court or the incoming Trump Administration, will play. And are reports of “senior Chinese officials” considering Elon Musk as an acceptable buyer just China trolling the US and EU governments?

UK CMA Open Probe of Google Search Under New Competition Law

Report from CNBC

In Brief – The UK Competition and Markets Authority (CMA) has opened an investigation of Google under the Digital Markets, Competition and Consumer’s Act (DMCC) to determine if the digital giant has “strategic market status” (SMS) under the new law designed to protect competition in digital markets. The regulator is focused on Google search, which reportedly holds a 90% market share in the UK. Designating a company as an SMS allows the CMA to develop and enforce new rules against anticompetitive conduct. The CMA’s chief executive said the goal was to ensure a “level playing field” in search and cited the interests of users, rival search engines, advertisers, and news organizations. Google issued a response that noted “the need to align regulatory decisions with the Government’s growth mission” and argued against “overly prescriptive digital competition rules”.

Context – Of course, Google will have SMS per the DMCC. All five US-based digital giants determined to be “gatekeepers” by the EU’s Digital Markets Act (DMA) will. The main questions are how long it will take, and more importantly, what are the company-specific rules that will be instituted. For example, the DMA now imposes 18 high-level mandates on 24 platforms of seven gatekeepers. The DMCC creates a company-by-company regulatory process to set the rules. That process is now part of a plodding effort by the UK to chart some manner of middle path between the EU and US on digital regulation. The DMCC parallels the DMA, and the Online Safety Act the EU’s Digital Services Act. And there are big antitrust enforcement actions in all three jurisdictions. AI is another matter with the EU charting the regulatorily path. Prime Minister Keir Starmer recently announced initiatives to push for AI investments and a pro-growth innovation climate in the UK, saying regulation will “be proportionate and grounded in the science” and investors will get “stability, pragmatism and the good sense they would expect from democratic British values.” Hence Google’s reference the Government’s growth mission.

Zuckerberg Wants Trump to Protect US Tech Giants from EU Regulators

Report from Euractiv

In Brief – In a major one-on-one interview with leading podcaster Joe Rogan, Meta CEO Mark Zuckerberg framed the company’s public policy battles in Europe in the context of “censorship” and argued that incoming President Donald Trump should step in to protect American tech companies from foreign pressure. The discussion with Rogan followed announcements from Meta and Zuckerberg that the social media giant was changing its Facebook and Instagram content moderation processes, including eliminating the role of paid fact-checkers and replacing them with a community notes program like X has used since Elon Musk acquired that platform, and changing its speech codes and the automated filters to relax limits on language and commentary some call hate speech. The changes will be rolled out in the US first but are intended for other major markets as well, including in Europe. Zuckerberg said he expects a clash with EU officials and argued that “the US government has a role in basically defending [the US tech industry] abroad”.

Context – Meta’s big “rightward” shift in content moderation practices is best understood in the context of competition policy and digital platform regulation. President-elect Trump, but really US conservatives across the board, have believed for years that tech giants, especially in social media, have slanted the rules against them. Ending so-called “viewpoint censorship” is a universally accepted conservative tech policy priority. On the other hand, there is no conservative consensus on anti-Big Tech competition reforms and regulation. The EU moved ahead on all fronts with laws and enforcement actions applauded by most US progressives. On content moderation, X and Musk are clearly in the EU crosshairs in a way that may pull in Trump. Meta seems intent to join that fray with policies and rhetoric similar to X and Musk. Zuckerberg appears to hope that standing with Trump on “free speech” pulls him onto their side in their other standoffs with European regulators. And the President-elect has said repeatedly that other Big Tech leaders are also asking for nationalist help dealing with Europe.

UK PM Keir Starmer Continues to Pitch AI Investment as a Top Tech Priority

Report from CNBC

In Brief – UK Prime Minister Kein Starmer continued to press forward on initiatives he argues will make the UK “the best state partner” in the world for “anyone working at the AI frontier”, releasing an AI Opportunities Action Plan focused on building up computing power in Great Britain. Developed under British tech investor Matt Clifford, the plan aims to increase public sector “compute” capacity by twentyfold by 2030, including opening access to the AI Research Resource, setting up several AI “growth zones” with relaxed development regulations to speed building data centers, and forming an “AI Energy Council” with industry leaders from both energy and AI. In a Financial Times opinion piece, Starmer argues that AI technology is already helping improve lives and productivity in the UK, that AI advances are at the center of his government’s plans for the country, and that they will take a “distinctively British approach” to AI regulation that “will test AI long before we regulate” and will offer investors “stability, pragmatism and the good sense they would expect from democratic British values.”

Context – The biggest global question in AI public policy is whether governments are moving toward direct regulation or “soft law” governance such as “best practices” and “safe AI” recommendations. The EU’s AI Act is the standard for concrete regulation. And other EU regulators are stepping up action on AI. Japan, on the other hand, has been a leader of the soft law model, including through the G-7’s “Hiroshima AI Process” with principles and a code of conduct. The last US Congress did not legislate, and President Biden issued a major AI Executive Order that mostly set AI policies for the federal government but also aimed to push companies on safety. Donald Trump campaigned to repeal Biden’s order for over-regulation and the new administration is expected to push harder on AI development and regulatory restraint. In that context, a middle ground between the EU and US, such as that being described by PM Starmer, may be technically possible, but it’s not clear that it is something AI investors and developers are looking for.

Federal Judge Rejects Blocking Some Aspects of California’s Social Media Law

Report from Courthouse News Service

In Brief – US District Judge Edward Davila responded to a motion to enjoin California’s Protecting Our Kids from Social Media Addiction Act by blocking some provisions, rejecting the motion to block some sections, and granting an injunction pending appeal of the entire statute until February 1, 2025, to allow the US Ninth Circuit Court of Appeals to consider an appeal. The law, challenged by NetChoice, a trade group representing several large social media companies that has successfully challenged a large number of state laws imposing restrictions and regulations on social media companies, bans online platforms from using personalized recommendation algorithms to display content to people under age 18, set limits on when minors are allowed to use social media, and restrict the hours when social media companies can send minors notifications, unless parents consent for the platforms to do otherwise. Judge Davila’s order did enjoin the law’s requirement that platforms report the number of minor users; however the state could start enforcing the portions of the law concerning algorithmic feeds, rejecting the argument that algorithms governing the operations of social media platform are themselves expressive content.

Context – Several states have enacted laws aimed at regulating social media platforms based on allegations that social media is addictive and harmful to teens. Those state laws have been paused by federal courts based on a range of 1st Amendment and privacy arguments. The same allegations are also powering lawsuits against large social media companies in federal and California courts. The lawsuits have been having more luck than the new laws, at least until Davila’s ruling. Although the lack of solid evidence of a causal link between teen social media use and negative mental health remains an important issue, in this case what is most noteworthy is Davila’s interesting application of the Supreme Court’s recent ruling in Moody v NetChoice. A majority on the High Court said that social media content sorting algorithms are clearly expressive content, which Davila used to argue that other social media algorithms and practices are likely not similarly protected.

Meta Trials eBay Listings in Facebook Marketplace to Address EU Concerns

Report from the Wall Street Journal

In Brief – Meta and eBay have each announced that the social media giant would run a test in Germany, France, and the US enabling people to browse listings from eBay on Facebook Marketplace and complete transactions on eBay. The move comes following a recent decision of the European Commission to fine Meta 800 million euros for unfairly bundling its classified ads-type Marketplace service into Facebook’s huge social network and abusing its dominance in online advertising to impose unfair business terms on rival shopping platforms. Meta launched the Facebook Marketplace in 2016 and quickly integrated it into its massively used core social media platform. Their Marketplace has since grown into one of the top classifieds ads platforms in many markets, including in Europe. The Commission claimed that tying the Marketplace to Facebook gave the service an unfair advantage over classifieds and consumer-to-consumer shopping competitors, and that Facebook imposed unfair terms and conditions on those competing businesses when they advertised on Facebook, often requiring them to share user data that was then used to benefit Meta’s Marketplace. In announcing the trial involving eBay listings, Meta noted that it continued to object to the Commission’s decision and would continue with their appeal, while adding that their new practice could benefit users on both platforms as eBay sellers will have more exposure to Facebook users and those on Marketplace will see more listings from eBay.

Context – Competition regulators for the European Union and UK initiated parallel investigations of Meta’s Marketplace in 2021. Meta reached a settlement with British competition regulators in 2023 in a parallel case by agreeing to allow classifieds and shopping services that advertise on Meta’s social media platforms to opt out of data sharing that could be used to benefit Meta’s Marketplace. EU regulators turned down a similar offer. In the EU, the Digital Markets Act also now regulates Meta as a “gatekeeper” company and its Marketplace as a “core platform service”.

Supreme Court Hears Arguments Over Law Requiring ByteDance to Sell TikTok

Report from Platform Economy Insights

In Brief – The US Supreme Court heard oral arguments earlier today on the constitutional challenges filed by TikTok and a group of content creators against the federal law that requires the business to be sold by China-based ByteDance to a new owner not based in an “adversarial country”. The justices allowed arguments to go more than two-and-a-half hours. You can listen here. The collection of briefs is available here. And reporter teams from the Washington Post and New York Times gave running commentary.

As we’ve been saying for months, this is a really tough case. There has never been a communications platform like TikTok that is allegedly controlled by a near-peer adversarial foreign power, that has such massive reach in the United States, and that has the content manipulation and data collection capabilities inherent in modern social media platforms. The federal law in question was crafted to force the platform to be sold to an owner not based in an adversarial country, meaning China, Russia, Iran, and North Korea. TikTok argues that a sale can’t happen and the law is a de facto ban. As we’ve noted, Supreme Court precedents related to adversarial propaganda, such as from the Cold War regarding communist content, point to the law having big First Amendment problems. However, the federal courts have been historically wary of challenging the two elected branches on national security.

The arguments were everything that should have been expected. The justices are very sharp legal minds that tend to give both sides a tough time. That was the case today. Depending on when you listened in, you could think the side being questioned was up against it. Early on, the justices kept pressing the plaintiffs on whether the law was about ByteDance, which is a foreign company without First Amendment rights, and platform ownership rather than speech. Later, Solicitor General Prelogar was pressed time after time on the law being a transparent effort to block speech the US Government did not like, the biggest First Amendment no no. If I were speculating about individual justices, I think Justice Gorsuch is the one who tipped his hand most, and that would be against the law’s constitutionality. Maybe Sotomayor on that side as well.

Prediction – Besides reminding everyone that making a prediction of a Supreme Court decision based on oral arguments is a bad idea, I recall political prognosticator Nate Silver saying the week before last November’s election to not trust anybody’s gut feeling, including his, and that his gut feeling was that Trump would win. I have the same view regarding gut feelings in a Supreme Court case like this, especially my gut. And my gut feeling following the arguments is that TikTok will get a let-off of some type and the law will not go into effect on January 19. Mostly, I fall back on this court’s track record of avoiding big digital policy decisions when there is a way out legally or procedurally, and an administrative delay past the 19th is likely to offer that kind of out. But I could be wrong.

Mexico Enacts Gig Worker Legislation Classifying Top Earners as Employees

Report from Mexico News Daily

In Brief – Mexico has enacted “Gig Worker” legislation that aims to provide hundreds of thousands of platform-enabled workers with traditional employment benefits and protections. The new law, which goes into effect in June, establishes that gig workers earning at least the national minimum monthly salary (currently the equivalent of approximately US $450) on a digital platform will be categorized as an employee of that platform and be due employee rights and benefits, including the right to join a union. Work and pay on platforms will continue to be task-based, with pay for a task including the proportional contributions for benefits such as weekly rest day, vacation, and overtime, rather than additional amounts being added afterward. Those who work on digital platforms but do not reach the monthly minimum wage threshold on any single one will continue to be classified as independent contractors. A digital platform will be required to register their platform employees with the Mexican Social Security Institute and withhold and pay the employee and employer contributions, including to the Mexican Workers Housing Fund Institute. Platforms will also be responsible for payment of the insurance under the social security system for any labor accident that occurs while a task was being done, both for employee workers and independent contractors. It is reported that about 658,000 people work on digital platforms in Mexico, of including 272,000 estimated to reach the minimum monthly wage.

Context – Although the EU’s Platform Labor Directive was initially intended to set uniform Gig worker employee classification standards, the final version left that in the hands of each member state, with some, including Spain and Portugal, going further than others. The Biden Administration was engaged in regulatory action at the US Department of Labor and the FTC intended to energize progressive labor advocates, but the incoming Trump Administration is expected to halt those efforts and be more amenable to independent contractor-based business models.

Polish Comparison-Shopping Site Sues Google for Years of Damages

Report from Reuters

In Brief – Google has been sued by Ceneo, a Poland-based comparison-shopping unit of European ecommerce platform Allegro, seeking 2.33 billion zlotys (about $568 million) for damages suffered at the hands of the digital giant from 2013 through 2024. The civil lawsuit filed in the District Court in Warsaw builds on the determination of the European Commission that Google favored its own comparison-shopping service, Google Shopping, in Google search results, disadvantaging comparison-shopping competitors. In September, the EU’s top court upheld the €2.42B fine imposed on Google by the Commission for this anti-competitive conduct. Ceneo’s claims consist of 1.72 billion zlotys for losses sustained by the company from 2013 through 2024, as well as interest payments of around 615 million zlotys related to the unpaid compensation during those years. Google issued a statement in response to the lawsuit saying, “Our Shopping remedy has been working successfully for several years and we continue to invest in formats that support brands, retailers and comparison shopping sites of all sizes across Poland and Europe.”

Context – The charge the Google was unfairly preferencing its own specialized “vertical” search services for products and services such as airfares, lodging, local services, and jobs, and penalizing vertical search competitors in Google’s general search engine, was the basis of the EU’s Google “Shopping” antitrust case involving its price comparison service. The fact it took well over a decade to complete the case, and companies competing against Google’s verticals continued to complain throughout, was a major impetus for the Digital Markets Act regulating dominant digital “gatekeepers”. The Commission has held regular DMA stakeholder forums aimed at finding an acceptable result balancing the interests of verticals providers and direct sellers, let alone consumers and possibly even Google itself. Regulating Google Search is likely to be a long-term employment contract in the Commission, let alone regulating the other seven Google “core platform services” as well.

Amazon Must Face Price-Parity Antitrust Lawsuit from Zulily

Report from Bloomberg

In Brief – US District Judge John Chun, who is overseeing a collection of federal antitrust cases targeting Amazon’s marketplace practices, has rejected the company’s bid to have a lawsuit from now-defunct online apparel marketplace Zulily fully dismissed. Chun’s order allows Zulily to proceed with the claim that Amazon’s “anti-discounting” practices that penalized third-party retailers who offered lower prices on other platforms violated federal antitrust law. Chun did dismiss Zulily’s complaints alleging that third-party retailers using the Amazon platform were engaged in a price-fixing conspiracy and that Amazon violated a Washington state consumer protection law. Zulily contends that Amazon used its marketplace algorithms to push third-party sellers to use its high-priced Fulfilment by Amazon (FBA) logistics services, pushing up the sellers’ prices on Amazon to account for the FBA fees, while simultaneously engaging in “anti-discounting” practices that scanned the internet for offerings on competitor platforms and penalized sellers who set lower prices on other platforms. Zulily argues that few sellers were willing to make lower price offers on lower-fee Zulily for fear of losing access to sales on Amazon. Chun said that Amazon’s arguments that its price-parity policies were pro-competitive need to be argued at the trial.

Context – Third-party sellers account for 60% of the sales on Amazon. These sales mostly involve products that are housed in and handled by Amazon in their FBA network. The sellers are not “beating” Amazon so much as supplying Amazon the way wholesalers do in traditional retail. The third-party seller fees often exceed 50% of the sales price and the sales are often more profitable for Amazon than their own first-party retail sales. Zulily’s complaint parallels a central component of the FTC’s antitrust lawsuit. Chun is also handling that case and similarly rejected Amazon’s motion to dismiss. A similar lawsuit filed by California’s Attorney General is proceeding in California state court and it is reported that Amazon will face heightened scrutiny for self-preferencing in Europe under the Digital Markets Act in 2025.

US Appeals Court Rejects FCC Authority for Net Neutrality Regulations

Report from the Wall Street Journal

In Brief – A three-judge panel of the Sixth Circuit Federal Court of Appeals has fully set aside the net neutrality (NN) rules put in place last April by the Federal Communications Commission (FCC), ruling that broadband internet services providers are “information services” providers under the Federal Communications Act and that the FCC does not have the statutory authority to regulate them using the “telecommunications service” provision of the law. The judges cited last June’s landmark Supreme Court ruling that struck down the judicial principle known as Chevron deference that directed federal courts to defer to federal agencies in setting regulatory standards. The Sixth Circuit panel cited what they called the “vacillations” of the FCC in the absence of clear statutory authority on net neutrality, noting, “This order—issued during the Biden administration—undoes the order issued during the first Trump administration, which undid the order issued during the Obama administration, which undid orders issued during the Bush and Clinton administrations.” The outgoing Democratic chair of the FCC reacted to the decision calling on Congress to legislate, while the new Republican chair lauded the decision and called the rules an example of Biden Administration “regulatory overreach”.

Context – The fight over net neutrality emerged in the mid-2000’s, quickly settled into a highly partisan divide, and became the internet’s highest profile political football pitting Democrats and consumer groups against Republicans and broadband providers. However, its bite waned as rules came and went while abuses never much materialized. Unless the Supreme Court accepts an appeal, which is very unlikely, the federal issue is now in Congress’s hands, and they are equally unlikely to legislate. The appeals court ruling did not overturn state-level net neutrality laws, such as in California, which may become the focus of progressive policy advocates and conservative critics. Meanwhile, those looking for a similarly partisan tech policy regulatory football during the new Trump Administration can still turn to Gig worker classification regulations.

EU Commission to Review Legality of Musk-X Boosting German AfD

Report from Bloomberg

In Brief – Elon Musk’s increasingly high-profile global activity criticizing progressive governments and political leaders that he objects to, and boosting conservative candidates and parties that he supports, is drawing criticism from government officials, especially in Europe. In Germany, his backing of the populist conservative Alternative for Germany (AfD) party in the upcoming national election, including plans to host a livestream with leader Alice Weidel on X, the social media platform he largely owns, is raising hackles from political leaders in Germany and elsewhere in Europe. The AfD, which has long been accused of neo-Nazi views by opponents on the political left, but also by many traditional, mainstream conservatives, is unabashed in its German nationalism, Euro-skepticism, and criticism of significant, often Muslim, immigration into Germany. A spokesperson for the European Commission, which regulates X under the Digital Services Act (DSA), a law that requires digital platforms to restrict the spread of objectionable and illegal content and meet transparency and content moderation standards, said that the EU executive would be looking into how X might be improperly boosting or recommending election content, including related to the AfD, as part of its ongoing DSA investigation of X.

Context – In October 2023, the Commission began investigating X for violating the DSA. They made an initial ruling last July that the company violated provisions dealing with “dark patterns” and transparency. The regulator also continued to investigate whether X’s content moderation practices, including its Community Notes, properly countered information manipulation and the dissemination of illegal content. Former EU Commissioner Thierry Breton used his role as lead DSA enforcer to challenge Musk over hosting a Donald Trump interview in August, an intervention that backfired. Breton, currently just a “concerned” European citizen, has taken to X to challenge the AfD’s Weidel on potentially benefiting from illegal help from Musk and X. Progressive critics argue that free speech covers Musk’s comments but not X algorithms that boost them.

Meta Moving from “Fact Checking” Content to “Community Notes”

Report from the Wall Street Journal

In Brief – Meta CEO Mark Zuckerberg has announced major changes to Meta’s content moderation policies and practices, ending “fact-checking” and reducing restrictions on speech across Facebook and Instagram in what he described as “restoring free expression on our platforms.” This announcement said that fact-checkers would be replaced with “Community Notes similar to X.”  The dramatic change in content moderation practices is the latest in a series of Meta moves aligned with the incoming Trump Administration, including promoting Republican Joel Kaplan, a long-time public policy leader in the company into its top government policy role, bringing Zuckerberg to Mar-a-Lago to meet with the President-elect and contribute $1 million to his inauguration fund, and naming Dana White, CEO of Ultimate Fighting Championship and longtime friend of the incoming President, to the Meta Board of Directors. As part of the changes, Meta will “remove restrictions” on topics like immigration and gender called “out of touch with mainstream discourse,” focus “filters” on “tackling illegal and high-severity violations”, and move the “trust and safety and content moderation teams out of California,” to “help remove the concern that biased employees are overly censoring content.”

Context – The full 239-word thread from Zuckerberg outlines a shift that may prove as big as when Elon Musk took over Twitter. It covers a lot in a few words. Note two things. First, he specifically calls out Musk’s X and its Community Notes by name. Second, the final action listed is that Meta will, “Work with President Trump to push back against foreign governments going after American companies to censor more.” The European Commission is currently “investigating” X and its Community Notes-based content moderation system for potentially violating the Digital Services Act. The DSA was also the legal basis cited by former Commissioner Thierry Breton when he formally advised Musk to watch out and not violate the law in interviewing then candidate Trump in August. Pushing back on aggressive tech regulation in Europe and elsewhere, and not just on “censorship”, is something Meta would like help from President Trump.

President-elect Trump Asks Supreme Court to Delay the TikTok Ban Law

Report from the New York Times

In Brief – Not unexpectedly, President-elect Trump has intervened in the Supreme Court’s consideration of the constitutionality of the federal law requiring TikTok’s US operations to be sold to new owners not based in an “adversarial country”, asking the justices to delay implementation of the law to allow him to seek to “resolve the issues at hand through political means once he takes office.” His amicus brief is one of more than three-dozen submitted to the High Court for its January 10th oral arguments on the First Amendment-based challenges of TikTok and a group of content creators. A three-judge panel of the US Court of Appeals soundly rejected the First Amendment-based challenges, ruling that the law satisfied “strict scrutiny” based on the national security concerns that led Congress to enact the law. The same judges rejected the company’s request to delay implementation of the law. The High Court responded with an extremely compact briefing and hearing schedule, with the justices indicating that they would defer consideration of whether to temporarily block the law until the day of oral arguments. Rather than address the First Amendment issues, the incoming President’s brief focuses on the “President’s prerogative to manage the Nation’s geopolitical, strategic relationships” and argues that the statute’s “unfortunate timing interferes with President Trump’s ability to manage the United States’ foreign policy and to pursue a resolution to both protect national security and save a social-media platform that provides a popular vehicle for 170 million Americans to exercise their core First Amendment rights.”

Context – The President-elect’s brief argues that if he can negotiate a solution, then the Court would not need “to decide the historically challenging First Amendment question presented” on a “highly expedited basis.” Given that these justices have chosen to avoid big First Amendment rulings on Sec. 230 and algorithms, state social media laws, and allegations that the federal government engaged in online censorship-by-proxy, an argument allowing the Court to defer may be very appealing.

Apple Responds to EU Commission Interoperability Demands by Arguing Meta is Bad

Report from the Wall Street Journal

In Brief – Apple has responded to the European Commission proposing measures that the iPhone giant should implement to comply with Digital Markets Act (DMA) interoperability requirements by arguing that some companies might “attempt to abuse” the new rules and harm user safety. Apple calls out Meta by name, describes them as a “data hungry company”, and claims that they have made 15 interoperability requests that they allege could enable Meta to read all of a user’s messages and emails, see every phone call they make or receive, track every app that they use, scan all of their photos, look at their files and calendar events, log all of their passwords, and more. Apple’s sharp rebuke of expansive interoperability requirements came in response to the Commission sending preliminary findings to Apple in the context of the two DMA compliance proceedings it started in September. The EU executive has proposed that Apple ensure its operating systems are functional with other technologies, including for notifications, Wi-Fi connection, AirPlay, AirDrop, and Bluetooth switching, as well and telling Apple to give rivals’ smartwatches and other wearable technology the same access it gives to its Apple Watch and Apple Vision Pro. A Meta spokesperson responded to Apple saying, “they just don’t believe in interoperability. Every time Apple is called out for anticompetitive behavior, they defend themselves on privacy grounds that have no basis in reality.” The Commission set a Jan 9, 2025 deadline for public comments.

Context – Apple v. Meta and Microsoft v. Google regularly vie for top billing in the digital giant classification for legal and regulatory feuds. Microsoft v. Google legal and lobbying battles were in high gear by 2010, but an unorthodox public truce was declared in 2016. Soon, Apple and Meta took their place, led by their CEOs. However, Google and Microsoft ended their détente in 2023, and a top Microsoft lawyer posted a highly unusual public blog in October accusing Google of running extensive “shadow campaigns” to discredit the software giant with regulators in major global markets.