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tv   Legal Experts Discuss Social Media Content  CSPAN  July 12, 2021 9:31am-10:58am EDT

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sort of typical sort, democrats animosity toward big businesses in general and skepticism about corporations in general and need to shrink them down to size and for republicans, it's really tied to this sort of culture war against technology companies in general where they perceive them as being biased against conservatives, either in the way that they moderate content or if their corporate culture, and so the anti-trust push against big tech is tied to their general feeling that tech companies are out to get them. >> watch the communicators with reason magazine's elizabeth nolan brown, the bipartisan anti-trust crusade against big tech tonight at 8:00 eastern on c-span2. >> c-span is your unfiltered view of government. we're funded by these companies and more, including wow.
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>> the world has changed, today a fast, reliable internet connection is something you can't live without. wow is there for our customers, speed, reliability and choice, now more than ever it all starts with great internet. wow. >> wow supports c-span as a public service along with the other television providers. giving you a front row seat to democracy. >> and now, legal experts discuss regulating the moderation of social media content. they include alleged censorship of conservative voices by big tech and anti-trust enforcement and whether regulation efforts are best left to the states and not the federal government. hosted by the federalist society, this is just over an hour and 20 minutes. >> welcome to our showcase discussion series on social media. i'm the vice-president for strategic initiatives at the federalist society and the
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director of freedom of thought process, a new initiative to address emerging challenges to freedom of thought, content and expression. this afternoon, july 8th, we will be discussing how federal preemption and state innovation questions affect competing concerns over speech and content moderation on digital platforms and social media. this is the fifth in a six-part series on free speech and social media, all moderated. and we also invite you to join us again two weeks from today, thursday, july 22nd. at 3 p.m. eastern for our final discussion. as always, please note that all expressions of opinions are those of the experts on today's call. after our speakers give their opening remarks, we'll turn to audience questions time permitting. if you have a question, please enter it in the q & a feature in the bottom of your screen.
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and don't forget to complete the sign-in form. it's available on the cle page and you can find a link on the event page for today's event. >> with that, i'd like to introduce our moderator for today's panel. the judge was appointed to the d.c. circuit in december of 2017. after graduating from harvard law school he served as a law clerk to judge edward becker on the 3rd circuit and judge clarence thomas on the supreme court. he had been in complex civil litigation and acting associate attorney general, and as deputy counsel to the president. before joining the bench, judge argued court of appeals including three cases at the supreme court. i'm going to turn this over to the judge to frame the discussion and introduce our panelists. thank you for being with us
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today. the floor is yours. >> thank you. as alida this is part after series on free speech and exposure media and sponsored by federalist society freedom of thought project, which explores what seems to be an increasing trend to restrict and punish not only controversial speech, but also controversial speakers. the traditional liberal view of speech was that the remedy for bad speech is good speech and so if you expressed an unpopular view, you would expect to be subjected to criticism and correction in the free market of ideas. today it seems that unpopular
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speakers face a lot worse. if you express the politically unpopular view, you're at risk for losing your job, being hounded out of the university, or losing access to various basic services, including, as relevant here, access to social media platforms. >> our last two panels looked at specific efforts to -- by governments to regulate and mitt ga it this kind of censorship by the big tech platforms like facebook, and twitter and google through either common carrier regulation, or anti-trust and we talked a lot about a couple of big cases that have been in the news, including an ohio suit against google search services to have that declared
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a common carrier under ohio common-law, and a suit by a bunch of states against facebook for monopolizization based on their allegedly deceptive privacy practices. at some level these suits were conventional in that they targeted the economic aspects of the behavior of a dominant player in some relevant market. but today, we might get into some more aggressive variations on this theme, which is state efforts to regulate political aspects of the content moderation of these platforms. one interesting example of that is a proposed texas statute that would prohibit social media platforms from engaging in viewpoint discrimination.
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if the user of a service resides in texas and the communication is sought or received in texas. our first two panels looked at sources of protection for the big tech platforms at the federal level. the two most obvious, one is the first amendment which afords some protection to these companies, but also may tolerate common carrier type regulations under the logic of turner versus fcc, which carries rules imposed on cable companies. the other source of federal protection against state regulation as we've already put on the table, is section 230, which seems to give pretty broad immunity to platforms
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with regard to their decisions about what speech, what third party speech to either permit or to suppress and 230 within a broad range seems to preempt any state law liability either for decisions by the platforms to allow the third party speech or decisions by the platforms to sensor the third party speech or as they would put it to moderate their content. today we're going to have a broader focus. we're going to look at some other possible sources of federal preemptions. one of them is looking at what the fcc might do at the federal level, either to regulate to itself regulate both content, moderation or censorship of the platforms and/or to prevent the state from doing that.
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and another source of preemption we'll talk about is the thomas clause of the constitution, which is the doctrine that congress, by authorizing the congress-- the constitution, sorry, by authorizing congress to regulate interstate commerce, preempt state regulations that either discrimination against interstate commerce, applies extra territorially or unreasonably burdens interstate commerce. and we're going to talk more generally about a question na might have particular resonance to members of the federalist society. which is if we think that big tech censorship is a problem that some government should respond to, should that response happen at the federal level or at the state level or
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perhaps at both? we've got a great panel to address these issues so let me briefly ibt dues them. brendan carr is on federal communications commission and served as generally counsel of the fcc, the lead advisor on wireless issues and as an attorney in the fcc's general counsel. >> before joining the commission he practiced appellate and telecommunications law at wily, he graduated from catholic university law school and clerked for judge dennis stead in the u.s. court of appeals on the 4th circuit. daniel francis is a furman fellow and neil fellow at new york university school of law where he writes about constitutional law, competition
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law, and anti-trust. he previously served as a deputy director, associate director and senior counsel where it was in digital markets. for 10 years practiced family trust with two multinational firms. he holds law degrees from trinity college cambridge, from harvard law school and from nyu. paul watkins is the managing director of potomac global partners. he focuses on registry issues involving financial technology. mr. watkins founded the office of innovation at the consumer protection bureau, and he headed up the civil litigation division of the arizona attorney general's office. earlier in his career, he was an mna associate at simpson thatcher and securities litigation associate.
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he graduated from harvard law school and he, too, clerked for judge shedd. before i turn the floor over to our speakers, i'm going to give you the code that you will need in order to claim cle credit. i will do this now and i will try to remember to do it again later in the presentation. if you don't have a pencil handy. the code is fotp579. fotp as in freedom, thought project 579. commissioner carr, the floor is yours. >> thank you, judge for that kind introduction. to join you and the esteemed
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panel about the vitally important subject. i'm reminded of an editorial board member back in 1970, and you said that diversity of opinion is the life blood of our democracy. and back then, we were coming out after era of group think and there was a deep embrace particularly on the intellectual left and ideas that's why in 1970 the modern day op-ed page launched in the pages of the new york times and there were perspectives that weren't necessarily reflected within their actual members of the editorial board. i think you flash forward to and it's an ill-liberal trend back toward orthodox thinking. maybe we can find a way as a
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cultural matter not a legal matter that embrace that opinion. i think it has a bearing on where we are with big tech today. i think there's never been in the industry where there's been a wider gap between power on one hand, and accountability on the other. it's just a chasm today and regulators of the state and regular level for various reasons are looking at trying to close that gap between power and accountability and it's this series has explored, there's a lot, i think, that can be done on the section 230 front. i think that the fcc, hats off the fcc has a role to play in fleshing out, in the communications act. i think that courts have given too expansive reading in section 230 as justice thomas pointed out in some of his statements and i think the debate goes beyond 230. even section 230 reform which i
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think is necessary, isn't sufficient to address a lot of people of abuses of power on the political left and political right have seen taking place in the platform. i think it's a starting point and we have to go beyond this and i think that's part of where the question of preemption is. are the states limited in terms of directly addressing section 230 and limiting might be too weak of a phrase there. i think that states can step in and impose transparency obligations on these platforms. they can impose what i would describe as nondiscrimination or accountability standards, meaning, if you're going to apply a term of service, let's say i don't want violence on your platform, is state could step in and say, look, you've got to do that across the board and can't take down speech from the political left and political right and not vice versa and i think there's a third level of this which is
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affirmative anti-discrimination rules where you can look to public accommodation law, you can look to some civil rights laws and apply those to big tech, including, you know, prohibiting discrimination on race, gender, but including political ideology. and some states, acome laws, including d.c.'s has that type of language today and i think that's what we can look to import from a state law perspective in the big tech and there's going to be some hurdles in doing that and you have talked about that in previous sessions the first amendment is a strong argument that will be lodged by big tech. whether you do federal reform or state reform and i think the answer to that is that there are a series of types of places where the supreme court has recognized that you can regulate entities without infringing their free speech
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rights. s for instance, we've got the cases and it goes beyond that, as well. state defamation, tort law that's effectively the regulation of speech permissible under the first amendment and we've got public interest obligation that is we apply at the fcc on broadcasters. we have rules like this date a roaming rule that requires nontitle 2 carriers, operators to carry the traffic, the data traffic of other entities. and it's outside, completely, of the common carrier. so there are a lot of analogies and precedence that could be looked to in the first amendment context although that's very, very interesting to me, but aside from this particular panel. this is focused on preemption and when you talk about state law regulation of moderation
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practices, again, federal or state you're going to have first amendment arguments, but uniquely when you go to the state law approach as i see it, big tech would lodge two main lines of arguments for preemption of either some or allstate law efforts to regulate moderation. one of course is section 230. the other argument that i think they could lodge is there has been a general policy recognized by the fcc of nonregulation or deregulation when it comes to what we call information services which arguably you could fit big tech within that definition. those are two species of claims that can be run by tech companies almost regardless of the specific form of state law regulation that's imposed. in my perspective, i think there's a strong argument that state laws can survive
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preemption under both of those lines of attacks and i'll just briefly flesh that out. first, the section 230. so section 230 c-1. at least as i interpret it is a broad provision, if you leave someone else's speech up on your website, you're not liable for at that speech. the person who said it is liable. and i don't think there's something you should do or the policy matter should do to disrupt that. and if you attempt today do that through state law. there's a second provision of section 230 though that allows for the good base, the statutory term is any voluntary, any action voluntarily taken in good faith to restrict access to or availability of material and it actually goes on, but the upshot for me shall the provision of 230 is provision that lawfully under the right interpretation would be the
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ability to take down speech and you only have the 230 protection if you're doing it in good faith, properly defined as a matter of federal law, if it means there's a category of takedowns that are bad faith so i would think that you could take the law of moderation under the concept of bad faith takedown and in which case i think you can survive a section 230 preemption claim. in other words, it's not a provision that says content moderation in all of its forms is protected by this statute, at least as i interpret it, it's if you leave speech up, you're protected and if you're going to take it down there's only 230 preemption or 230 protection. if it is good faith within the meaning of the statutes, so, i think there's a fair amount of room at the state law level to
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regulate bad faith content moderation and some of the ideas that i put down from the anti-discrimination or takedowns that are inconsistent with your terms of service would be in my view at least potentially bad faith for 230 preemption. the second part of preemption that i mentioned, there's a line of fcc precedents that talk about deregulation or depending on your perception, nonregulation services which, again, this could be considered part of, title one and title two at the fcc. briefly let me describe the two lines of cases or the two lines of precedents and i'll put a couple of cases under each bucket to flesh it out. on the one hand, there's a case that strongly recognizes this concept of a federal policy of nonregulation, it's an 8th circuit case that dealt with voice, voice over internet
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protocol. and minnesota tried to put tariffs and other regulations on voice providers and fcc said, no, we have nonregulation of voip and 8th circuit said you're right and that decision not to regulate has preemptive effect and pre empties minnesota state law. the other case i put in that bucket of strong recognition of federal preemption of nonregulation is a recent case out of new york. a district court where new york state imposed a requirement that required internet providers to offer $15 a month low income services and the district court there decided that that new york state law is now stayed based on the likelihood of success, based on this concept of conflict in field preemption that emanates from the communications act and then third, the case i put in that bucket is our own decision in the fcc in 2017 we moved
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from regulation title two and title one, the decision to reregulate from title two to title one carries preemptive force and therefore, pre empties any state law to the contrary. now, that portion of our 2017 decision was not upheld by the d.c. circuit and leads me into the second category that has a less expansive view of the deregulatory force of-- or i'm sorry, the preemptive force of the regulation. one would be that case that said no f. c c, your decision to move something from title two to title one to deregulate. we don't think that's deserving of a very weighty preemptive force. a second sort of opinion or statement i put in that bucket would be justice thomas in a separate voip case said that he thought the appropriate case would start to revisit the
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broad preemptive force given to decisions not to regulate. and then finally, a third case i put in that vein would be, there's a recent district court case in the 9th circuit california, for california posts net neutrality if p's on the district court there denies a stay request by if p's and basically said, no, that the fcc's decision to deregulate to move from title two to title one does not reempty the california net neutrality laws. so, some interesting lines of precedence. i would argue that you can put all of those together and almost regardless which way you come out either on the broader doctrinal question that justice thomas has teed up or otherwise, given that 230 has the good base that there necessarily is room for states to regulate bad faith content moderation and otherwise not the same comprehensive federal
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regime at issue in traditional telephone service that is would displace the field of content moderation at the state level. maybe i'll stop there and leave some room for questions, but i think those are the two species of preemption claims i think could be raised against state law anti-discrimination obligations and how i would think about the answers. >> thank you. daniel, you're up. >> thank you, judge. a pleasure to be here today and to talk to you a little about my favorite corner of constitutional law. i want to talk a little bit about the federal leaves general terms where some of the most important constraints are and how our constitutional order and particularly economic basing provisions might react to this extraordinary wave of state regulatory efforts that
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we're seeing. so just take a moment to set the scene at least as i see it, we've seen over the last two decades a really extraordinary set of technological al commercial change throughout our economy. we've seen the rise of platform businesses that are often diverse in very different ways that i think sometimes are suppressed by the label of big tech. it's true that the platform businesses, what we think of as the economy is radically changing and ranging from retail to the way that we get around in cities ap operating systems and seems to be a digital platform everywhere. the last four or five years, i think framing for this conversation is exa terrored and multi-directional backlash against some of the consequences in the platform. and i think there's a bipartisan concensus that we must do something, some kind of radical set of changes and regulatory cultural or otherwise and much less concensus about what exactly
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needs to be done and why. so we see a wave of conversations and you know, in our federalist system one of the berths of the way our political system is it organized is local and particularly state governments are not just co-equals, but in some occasions preemptive-- i'm sorry, preeminent in that discussion. so we've seen more enforcement efforts at the state levels. more anti-trust suits led by state coalitions including one as recently as yesterday, a we've seen a lot of legislation, privacy legislation here and in california and to censorship laws and i think on texas and florida, and taxation efforts aimed at businesses and in ways that are unusual as we mentioned earlier, higher to designate google for a public or common carrier, so with states driving the
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conversation, and framing many of the sort of productive conflicts what does the federal constitution have to say about this? of course, we're used to having regulatory in this country. state law, common-law, environmental rules, there is a certain level of complexity that comes with any healthy federalism. that means individual states can set rules to suit their local populations. businesses and vote with their feet and find a place they like best because there's room for learning and these are benefits of life in the federalist system, but there are limits to what the federal constitution will tolerate. on at least two occasions in our history the emergence or
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integrity of a national economic space has been pretty seriously jeopardized. one was under the articles of confederation in the 80's when there was tariffs and trade that fueled political discontent and the last few decade of the 19th century when the national market was emerging and railroad and telegraphs, but that system faced the prospects of death by a thousand cuts. ... terms and rates of railroads in way that threatened integrity of all systems. on both occasions the federal constitution came to the rescue. in the first example, commercial problems under the articles of confederation were a key driver of what were a key driver of what led the colonies to come together at
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philadelphia, not just the constitution but the constitution containing interstate commerce that we have today. we know as we sit here in 2021 were used to thinking of the commerce clause as a basis for affirmative federal legislation. but, in fact, at least the time the constitutionall convention although it was pretty slender, the balance of evidence suggest the focus was when james madison said a short time later the focus of the commerce clause was to prevent inconsistent state regulatory actions and the supreme court decisions in 19 century endorsed that understanding. in the second case towards the end of the 19th century with state regulations of railroad it really prodded the supreme court to invigorate dormant commerce clause law. the idea the commerce clause prevents certain kinds of regulations that interfere or unreasonably burden interstate commerce particularly interstate networks that are important toet thee national economy, most
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famously in decision in 1886 the supreme court held that even intrastate portion of interstate railroad routes could not be regulated by states. that prompted the creation of the first federal regulatory agency, the interstate commerce commission in 1887. soap in both of those cases when the national market was threatenedea it was the commerce clause that stepped in. it took a while for the legal framework to settle down but by the first few decades of the 20th century it had done so. a modern consensus making it prohibits three things, judge you mentioned earlier, discrimination against out-of-statega or, extraterritorial regulation or access to its market contagion of what we do or do elsewhere, and in recent burden on interstate commerce. something funny happened over the last 14 years since about the 1980s. that model really declined, both continue to pay lip service to it of what the court has been
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focused on is intentional protectionism. that's where states prefer an internal commerce over out-of-state or interstate commerce. part of the reason for that is what we haven't seen since the 1980s is no way of straight measures that threat to fragment or balkanized the national markets. more or less to focus on intentional protectionism. that today may be changing and we may be seeing the first raindrops of a a storm of legislation that threatens exactly the kind of thing that led to those terms to the commerce clause in the past. so to be sure i want to be clear about what i'm suggesting, there is ae lot of room in our constitution for states to goow there own way. they taught law for context to even interstate companies, multinational companies. state tax law for conduct that
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is generally located in part attributable to or a portion to a particular state absolutely fine. but i see in some of this modern recent waves of legislative regulatory efforts real things of extraterritoriality and undue burden in exactly the ways that of animated dormant, clause laws in the past. i want to give to my examples. the first what is the maryland taxing measure on digital advertising and i realize this is about different date raped her efforts and we could talk but each of them, but the extraordinary thing about the maryland digital advertising act is that it exerts maryland taxing authority over all digital advertising services in the state of maryland without defining what ever digital advertising is or even what is in the state of maryland is. one way toth read the statute is that it takes conduct to be in
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the state of maryland for regulatory purposes. if somebodygu in maryland can visit a website, that's the theme that runs to many of these data regulatory efforts, and that is really remarkable reach on the dormant commerce clause, and it's only beenat since the last three years the supreme court has recognized a t sufficient nexus within activities if your estate at some of physically shipped goods into your state. for a long time that was not enough to create a taxable nexus. there's long stem supreme court cases that say youe have to physical presence and premises. about three years ago the court said all right, if you are shipping goods into state that contact enough. no way no how on that framework is the fact that a user in a state is able to visit your website sufficient contact. so it's a really remarkable reach. it's common to many of the statute but simple five by maryland. the other one i want to mention
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is the florida and texas, online censorship acts. i'm not well qualified to talk about the first amendment law but that the site although the florida law has been preliminary and joined by federal district court in both those measures the florida when is been passed, the texas when is proposed, really oppose pretty radical force carriage obligations with respect to activity that has such minimal contacts with florida and texas respectively that the most natural reading of both statutes they apply as long as the relevant activity can just be viewed by user in texas. if you're a michigan platform regulating speech by a michigan user, then you fall within the reach of these pretty remarkable speech obligations and both statutes. so those are very broad. that isy
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way of overview. i predict what we have gotten away with a weekend commerce clause for the last 40 or 50 years that may be ending. i predict we will see a turn now as businesses and regulated entities look back at these case law extra territoriality unreasonable burden in a way that made reinvigorate the dominant commerce clause. >> paul? paul: thank you, judge, and thank you to the federalist society to be part of this panel. my expense comes from the state level, suing companies and being in regulatory roles. -- reg latoya roles promoting innovation. these -- regulatory roles promoting innovation. these are key to what i would expect for red states going forward, lawsuits and promoting innovation. i want to back up to how red states find themselves in this
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circumstance, where they are having to sue these platforms and to a large extent, i think it is because blue states and a small number of blue states have crushed their competitors in venture capital investment and developing emerging businesses. the numbers are astounding. if you look at california, it has received or than 50% of venture capital investment just about every year from 2010 to 2020, and new york and massachusetts, 75% and some years close to 80%. the closest competitor's taxes in 2010, around 5% of venture capital investment, although their absolute numbers have been increased. they have not kept pace. in 2020 their share of venture capital investment drops to 2.7%. these companies are developing in particular cultures and they
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are subject to primary regulators that reflect those cultures and i think that shapes a lot of policy, particularly a few years ago, when many company said, we are going to depart from sort of the friedman doctrine of shareholder capitalism. we are going to reflect the values of our stakeholders. we are going to be more these extensions of policy. those policy preferences are drawn from that culture. from our geographic culture, regulatory culture. it is a surprise red states look at this and say, where did this come from? this does not match what we are hoping to see. did they treat these extensions from companies the same way they would treat an extension of policy preference from the federal government? from another state? which is, they respond with a bunch of lawsuits.
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now, i want to talk about how some of these lawsuits could be modified to have these -- to how some of these regulatory structures can be modified. what i hope the states upset about this focus on is, what they can do, to do a better job promoting innovation.
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trying to build competing social platforms where the users have more control over their own content, where they can be paid directly for the content and what my fear is, is that in the regulatory responses for the judicial decisions that we somehow solidified these platforms as necessary for the regulatory structure. i think this is something that platforms would very much like to see. it's why you see companies say hey, we're fine with reforming 230 because they want to be needed. so whatever the states do, it's essential that they do not take action that would require some
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sort of modern nation by a platform. and then the state open door for competitors in an example of what not to do and the facts here fit together so well and i think you couldn't make it up. one of the big innovations again currently is in blockchain and within blockchain crypto currency, and anita trump administration and the secretary of the treasury, there was very little guidance given to this industry, very little clarity with the exception of speeches and maybe prior books. in particular there was an enforcement action brought by the sec brought by a social media coverage that almost no one ever heard at the time called telegram. telegram was trying to launch a token that could be trained to its messenger service. they did it according to a generally accepted framework but sec brought enforcement actions that you can do that, we're going to t shut down your token
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offering. fast forward one year, the trump's all kicked off social media. what does donald trump, jr. say? go follow me on telegram. telegram would've been a much more viable competitor than facebook is trump sec would've let them have their often come up and developve in a new direction and compete on new ground with the incumbents. that if folks are upset about the social platforms are not willing to allow this competitive activity, then i think they're going to really solidify the monopolies that are currently in place. what i think the path is for states begin very upsetou about this is to coordinate come to use existing regulatory frameworks that have traditionally been allowed under preemption hike consumer protection statutes to coordinate what they're planning to do, which gives them joint market power, then to jointly
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encourage innovation in all sorts i of areas, in policy anda number of other areas so that innovators are moving into the states and so that these states jointly have market power within a a country that i think will probably trend toward a bifurcated market. those are my brief remarks. i will turn it back to you, judge, look for to continuing the conversation. k forward to continuing the conversation. >> great. before we continue, let me reread the cle code for anyone who is interested. once again, it is fotp, as in freedom of thought project, 579. alright. let me give each of our
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panelists may be about two minutes to respond to anything that they heard from their co-panelists. brendan. >> thanks. i thought it was an interesting discussion. one thing that i will touch on is i think there's been a lot of interest recently, including flowing out of justice thomas' recent statements that we should potentially classify big tech providers either as common carriers themselves or as places of public accommodation. my view on that is, what we really need to do is look to apply antidiscrimination obligations on big tech. and i would say that common carriage and public accommodation law are precedents in past examples, where we have applied some forms of anti-discrimination requirements on those types of entities.
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but it doesn't necessarily flow from that that we need to classify big tech as either common carriers or places of public accommodation. rather we just take the core concepts of anti-discrimination applied there and bring them forward into these websites. >> all right, daniel. >> thank you. i would have just a word or two, by way of reaction, to commissioner carr and mr. walken. i absolutely agree with you, about common carriers. i think the economics of common carriers has been traditionally understood, radically different from those we associate with the digital platforms. so i often hear this idea that facebook or google, it is exactly like real roads or networks of the past. i think that is directly wrong.
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i think what makes railroad economics distinctive is that competition in a certain sense doesn't work. you're always choosing between monopoly, monopoly prices backed by the state, or you allow network competition which forces prices down and real roads go out of business, that's what's happening in the 1880's. i think the common carrier frame obscures a lot more than it actually reveals given the economics obviously don't apply digital platforms today. in light of product differentiation. i take the idea of bad faith to be central to your view of the right way forward. i wonder if i could invite you to see a little bit more about what that means and how we could identify it. if a publisher or platform or genuinely believes that certain kind of speech or viewpoints are pernicious or harmful, satish is , it is uncongenial to their base or religious mission, would it be bad faith to moderate on that basis? it's not clear to me why that would be right.
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mr. watkins, i strongly agree that the focus he has got to be looking for ways to sponsor the competition and of a heavy-handed regulatory approach. instead create conditions for entry. i want to push back on the idea regulation is monopoly reinforcing. it wasn't clear to me why allowing cryptocurrency for an incipient social media network would enable that social media network to be more competitive, in the provision of social media, anymore than allowing it or prohibiting it from providing any other product or service. it wasn't clear to me why we see that as a piece of the platform and monopoly problem in the antitrust sense. thank you. >> ok. let me just respond to that. think you so much for the question -- thank you so much for the question. it comes down to a phenomenon that we are seen throughout the
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economy around embedded finance, which is the benefit of being able to transact -- to engage in commercial activity through one single board of. you seem social media companies push into this hard and dramatically. facebook wanting to compete with amazon, being a place to find goods and services and so forth. when you have your own currency side to that, there are real efficiencies around taking that step into commerce. it also makes it efficient for users to monetize that content. because they can potentially charge, they can sell, there's something called a non-fungible token that can show ownership around a particular digital representation. people can transact and give the right to particular posts or particular artwork. there's a lot of functionality there that could allow an insurgent to compete.
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i think for an insurgent to come in, they will need something like that that is new. i do think the regulators have to be mindful that they are not preventing that sort of activity. and i think it is a particular area of concern, if you look, there was a speech by one of the cftc commissioners um >> there was a speech by one of the and i'm getting into the weeds on this. the r block chain based occurring outside an exchange and it is hard from cftc to regulate that. they regulate exchanges and expect exchanges to regulate activities that occurs. this is a common regulatory structure. you can see it in anti-money laundering and know your customer requirements. the regulators do not impose all of those. they impose those on financial
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institutions and financial institutions impose them on customers if you do not need institutions anymore and it is customers interacting directly, that can cause regulars to be worried. because they have lost authority and are depending on the platform. my fear here is that if folks come in and say, for an effective marketplace of ideas we need this comprehensive regulatory structure that facebook and twitter and so forth is imposing on all content, then the next generation could simply skip over the need for that sort of platform but would be perceived as unlawful because you later switch feel the content was not sufficiently regulated. that is the backdrop that should cause caution on the part of regulators. if i could ask you a question, professor, i know we've seen not necessarily in the social media contacts, but within financial regulation, some of the new york regulators say, hey, we want you
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to reduce or stop lending to energy companies, if you're a financial business doing business in new york. and then i believe i saw some related commentary by eugene volik. on some recent lawsuits, saying they are a real stretch by the former president, unless there were regulators actually directing companies to ban the president or saying this would be a good idea. i'm curious if you think there are certain facts that might be discovered involving regulatory -- involving regulators pressuring product forms -- involving regulators pressuring platforms that would then be a dormant commerce clause violation going in the other way we are red states would see the state regulators are trying to extend your policies into our state, and you're doing it informally and indirectly, but we are upset about it and we are going to
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sue. what sort of facts would fit that? i don't know they exist or not. >> daniel, why don't you take that? there's also a pending question for brendan. >> let me see if i can do this in 15-20 seconds. i don't know the details of that set of regulatory moves. would love to hear more about it. in principle, what the court would be looking for would be signs that the new york -- that new york was being -- that new york was being protectionist. it's not whether you are doing something that has effects in other states. allstate regulation does that. it's whether you are making market access conditional on something that happens wholly out-of-state. like i'm requiring tomorrow from a seventh circuit case a few years ago, you can only sell your e-cigarettes in my state if you many factor them in a way that i prescribe or you
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can only operate your social network if you conduct out-of-state content moderation in a way that i prescribed to use today's examples. that is the extent that kind of reach is going on and there could be a dormant commerce clause for sure. >> so brendan, bad faith, editors of national review genuinely believe that right-leaning speech is a good thing. and they limit access to their platform to contribute or share that view. -- contributors who share that view. editors of the new republic, same thing on the left. doesn't seem like bad faith. it does seem like something we would want to affirmatively protect. so why is it any different, when a platform, they genuinely believe left-wing speech is good
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speech, and may act on that view. >> there's a couple of answers here. one is, the idea that i have put forward for state law regulation of transparency, antidiscrimination, non-discrimination, would only apply to what i would describe as general-purpose websites. so places like facebook, twitter, youtube -- so if you are a specialized website and you are very clear, i have a political angle that i want to take and i want to moderate consistent with that, i think there can be a room even under my theory to say, the anticipation rule doesn't apply to you, but where you hold yourself out as a general use platform, maybe not exclusively, but particularly where you say,
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for all the discrimination we do, we don't engage in partisan political takedowns -- people can disagree with whether they actually do that in practice, but i think if you pass a law to say don't moderate content based on political ideology, twitter or facebook could say that doesn't pinch us. he would need some pretextuality type of look behind to get behind what would be political takedowns. but it certainly leaves room for specialized -- or websites that are very -- continue to do that. only apply this to general-purpose. it's not quite the same thing i would say as a telephone carrier or an isp. but in terms of the spectrum of speech interest, i would say they look -- i would say they are on that side of the spectrum. a cable provider. isbn telco on one end.
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newspapers on the other end. i would say these general use websites are somewhere in the cable realm, as opposed to a newspaper or a newspaper, magazine, internet magazine or something. >> let's talk about things that the fcc might do. and building on that spectrum. and let's talk about some of the history, with the agency's attempts to impose net neutrality and the history that's in the supreme court and in our court. has said that the commission has a choice to treat broadband internet providers as either telecommute acacian services or information services.
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my head kind of spends when i read those definitions. and the dueling thomas and scalia opinions, over which is which. turns out it is a critically important distinction, because whatever falls under title i, we've said it can't be regulated as a common carrier. and whatever falls under title ii, the commute occasions act does regulate is a common carrier. so if you -- i know you don't do this, but you have the discretion to treat broadband providers as telecommunications services under title ii, common carrier. is there any room to argue that you can do the same thing for the platforms? and if you can, is that an idea worth considering, to impose on
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them net neutrality, in the sense of a rule against viewpoint's termination? >> yes. it's a good question. i think whether something is a title ii or title i service has all kinds of interesting and sometimes circular definitional reasons. one way to very much dumb it down is if -- are you operating as a dumb pipe? are you doing more than just being a dumb pipe? there are certainly arguments you can make that there are big versions -- that there are versions of what big tech is doing. although maybe not certainly all features of big tech, certainly some that approach a transport type dumb pipe type of a thing. but it's not a position i'm advocating for, because i think
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to apply antidiscrimination requirements, which is what really matters, to big tech, you don't need to sort of pound them into the square hole of common carriage or public accommodation. those are examples of where we have applied enter this termination lawfully. i think we just import those requirements into big tech. when you classify something under title ii, you strip the federal trade commission of jurisdiction over the entity. there are negative externalities from that perspective. >> do you think you all have authority to do that under title i? >> yes. section 230 in the munication's act interestingly entitled to of the munication's act -- i think we do have authority to interpret section 230 to reorient the caselaw a little bit and say the courts that have sort of completed c1 and c2 have
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over read c1. c2 applies to takedowns. i think we can do that at the fcc. then we can issue rules either way and say here are some of the guidances on the good faith, bad faith line that congress chose to drying the sand and include into 30. pursuant to that, we can take action and define good faith and bad faith. obviously takedowns that are inconsistent with terms of service are bad faith. treating like cases similarly can be defined as bad faith. the strongest argument on the others from a first member perspective would be to say in bad faith is discriminate in based on race, gender, political ideology. i think we can do that, but comply with terms of service, not a strong argument i think,
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treat cases alike, may be a foursome i'm a complaint, but not particularly strong, then what i think we should do is a policy matter which is affirmative and discrimination. i think there's obviously a path forward to win that case. but it's a gradation. >> daniel, paul, any thoughts? i know you are not fcc lawyers. any thoughts on this? >> you read my mind, commissioner carr. describing the carveout from ftc jurisdiction under section five of the act for common carriers. another unintended consequence of some of the proposals to reclassify big tech or other platforms. it would have significant consequences for the antitrust project. the ftc has been in the lead on so much of the tech antitrust often recent years. >> let's talk about extra territoriality for a minute. when i was in private practice,
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i did a lot of work on federal statutory presumption against extra territoriality. it turns out in that context, it's easy to specify the rule that statutes are presumed not to apply extra territorially, unless congress clearly says so. but it's actually very hard to figure out what counts as an extraterritorial application. i'm sure you have the analogous problems in dormant commerce contexts. could you just speak a little more on how we would think about -- looking at the texas statute, it appears limited to users
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who reside in the state. which is clearly some attempt to deal with extra territoriality. and then there's an independent requirement for the expression has to be shared or received in the state. so what should be the touchstone, if texas wants to regulate content moderation in texas, is it that the user's computer is located in texas at the time of the use? or does it turn on where facebook is? and is that even a meaningful question? given the way computer networks work. i imagine it probably doesn't turn on. whether electrons and the network flow through texas. how do we think about that?
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what would be the appropriate commerce clause line between texas managing what happens in texas but not what happens in california? >> you are exactly right. to highlight the intransigence of the whole exercise, particularly in a digital part of the economy between drawing lines that are framed in physical/territorial terms. point number one is it would be an enormous net. even on the most optimistic assumptions about the cases that are brought the way they are briefed. there's no way this is a miserable exercise for everybody involved. let me just acknowledge that by -- let me just acknowledge that. we can talk about strengths and weaknesses, levels of risk, levels of contact, rather than bright line rules.
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i think it is fairly clear, reading the texas and florida statutes, it clearly reaches way too far. you are right -- it protects the users ability to receive the expression of another person. you could be in a situation where somebody in oregon is posting something online, there's content moderation decisions made by a companion california or washington state or new york state about how that is treated, that activity falls within the reach of the texas bill. a texas person can sit at their computer and reach out across the internet brings in under the scope of texas' regulatory reach. >> go ahead.
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>> it is shared or received in texas? >> it is the user who is texas-based. it is the users ability to receive the expression of another person. this user's -- it is the user's ability to receive the especially of another person. it falls within the rigell three reach of the statute. that is really remarkable to touch back on what we were talking about, the supreme court has only just accepted that there are sufficient contacts when you ship goods into a state without having an office and premises built there. this goes beyond that. would it also does is it distinctively sharply presents the opportunity for inconsistent, directly contradictory regulatory efforts by states. so it requires no imagination to
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imagine a statutory effort or even a common-law cause of action in another state that would make somebody responsible for failing to engage in context moderation -- content moderation for republishing communication of a certain kind. including content not exempted by the texas law. you can imagine the kind of communication we could be talking about. another reason why feel so confident and this would animate things is it sharply raises the idea of conflicting legislation. i would say number one, as guidance to a state, think very hard about your jurisdictional connection. he is state taught law and tax law as your guide when conduct is directed at consumers or entities in estate. that raises many fewer concerns. if what you want to do is create
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sort of protected rights for citizens in your state, then it should be confined only to those citizens. a case earlier this year did not violate the dormant commerce clause for kentucky to connect a price gouging law that only applied to sales to people in kentucky. the court said, as amazon's business is currently set up, this would really interfere with their practice of setting a uniform national price. it could very easily adjust its business so that consumers in kentucky see that kentucky regulated price and it doesn't affect what is going on elsewhere. that kind of thing, where it's feasible technically and commercially for a platform to comply with that law, without it touching wholly out-of-state activities would be a huge bound forward.
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another thing that's going to be pretty safe is notice and disclosure obligations. state specific labeling requirements or consumer notice requirements. arkansas has just recently enacted a rule that large third-party sellers on online marketplaces have to disclose their contact information as part of the experience on the marketplace so consumers know who they are buying from. that notice obligation consistent with the data protection regulation is likely to be much less concerning under the clause dormant commerce clause. -- under the dormant commerce clause. taking notice or explanation style relief rather than creating aggressive rights of actions, those would be the directions which i encourage folks to move. >> brendan or paul, it is a pretty good case that regulation
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on the state level is going to be messy for the reasons daniel has laid out. to what extent does that counsel for handling this at the federal level? one uniform rule that everyone can coherently live under. >> i think there are lots of products that have variations at the state level. i don't know why just because something is digital or available online that it needs to be uniform. there are lots of providers. there are lots of providers that operate more in some jurisdictions than in others pay what i don't necessarily think this is a horrible outcome. if a business decides they don't like the way that some states define unfair practices in a way that lines up with what the
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commissioner laid out. the platform says we don't want to be held to that standard so we will offer our product there. i don't think that's necessarily a horrible result. states need to have the ability to regulate themselves. >> i think if we had federal regulation in this space, one that was a decrease was the need for a public policy or policy need for regulation at the state level. it would certainly strengthen arguments for preemption. i don't know if it would completely eliminate the need for the ability for states to as, but we'd be in a different circumstance. that is the spot we find ourselves in, this wide gap between big tech power and accountability. they amass power in blind spots
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for republicans and democrat lawmakers alike. on the left, there was an ideological mind melt, they looked the other way and the concentration of power. republicans on the other hand, there was this sort of -- our view is fundamentalist adherence to the idea that if a large corporation is doing it or wants to do it or gain power, for we as conservatives to say something? republicans and conservatives are turning away from that view and becoming increasingly skeptical of concentrations of power. i think it was that blind spot that resulted in this massive concentration of power in silicon valley -- in silicon valley. if there's a federal response, it decreases pressure in the need for alice he responds and increases the arguments about preemption. >> last question i have is for paul.
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the numbers you have on blue states versus red states. they are pretty daunting. you said one way to counteract that is for the red states to band together and jointly act to acquire countervailing power. is there any compact clause violation there? have you thought about it? i don't know anything about the compact clause. this may be a stupid question. it strikes me as if to states are forming an agreement to jointly regulate, that might be a concern. >> yes. if i could response your question on federal preemption, the area where there is enough agreement to do something at the federal level is something that cements these platforms in a regulatory role,
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cementing their business model. i think that would be a big mistake. the compact question, there are a number of ways to do this without having a compact. most of the challenges with compacts is when they are versus the federal government, not necessarily other states. there are some successful compacts around insurance, providing for reciprocal licensing. and so forth. states can handle this like bar admission. if you are licensed in this state, you can operate in this other state. states get together and see that -- uber and some of these other platforms have issues around independent contractors. we will solve that at the beginning.
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there's a huge gap if you look at investments in facebook occurring in 2004. we don't have data standards for about a decade. investments in ai in 2011. we don't have any ai efforts at the federal level until 2020. so there's this decade where states can act quickly and form good policy and attract investment. if they do that, they will be rewarded and it will be a productive area for them to focus on. >> i have just received one question from the audience, which i will lay out. we are running over. i'm told that is ok. which is, california regulates emissions. this is probably an extra territoriality question for daniel. california regulates emissions
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in california. that seems formally not extra territorial. yet the effect of that is to compel auto manufacturers to have a national standard. it's not feasible to have one set of cars that you sell for use in california and a different set elsewhere. so how is internet regulation any different? >> that is a perfect example, and a great one, of the system working the way it is supposed to. the dynamic you described is known in federal literature as the california effect. the idea is even though california is appropriately tailoring its regulatory reach, focusing on emissions in california, it's not attempting to say, well, one of my citizens in california might visit or virtually be present in
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massachusetts, so i'm going to try to exert revelatory control over what is going on in massachusetts. in a way that might conflict with massachusetts law. what california does is regulate in its own sphere. then the glorious complex messy economics of federalism mean there is a series of competitive reactions to that. if your state enacts a rule that doesn't make sense, you need to be ready for the state to say, sorry, i'm not going to do business under these terms. that's part of a healthy regulatory federalism. the state might say all right, that's how i'm going to do business, and i'm going to do that business that way nationally. that kind of interaction between different regulatory systems and jurisdictions, different private enterprises does show
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how states and local government sometimes can play a role in leading the regulatory conversation. but can do it within the bounds of the constitution. >> ok. another question along the same lines. on the texas-like scheme, why can't we think of the regulation -- can texas simply regulate what shows up on computer screens in texas? and that seems for millie and trusting, -- 4 million trusting, and the way that california emissions are formally interested. >> also it will be one of the most important because additional questions the supreme court settles. i assume in the next decade.
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if the answer is yes, to things will follow -- number one, virtually every state in the union can exercise regulatory jurisdiction over virtually every business in the union. if that is sufficient to constitute sufficient regulatory connection to avoid the dormant commerce laws and due process laws, it dramatically sets the line down for state jurisdiction. number two, what will follow is a horrendous array of inconsistencies. conflicts. i am skeptical sometimes -- costs of regulation as part of living in a healthy regulated free-market. but that prospect, the idea that states or even local regulatory jurisdiction would be thrown so far, that question is going to be called before the supreme court.
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we talked earlier about the way for decision. it is unlikely the court would agree that is a healthy model for digital federalism. i would be praying the court takes a more narrow and more tailored approach. if i'm wrong, then it's going to be an extraordinary time. >> we >> we are well over time, and less alida steps in right away let me give you all free chance to give any concluding thoughts you may have. is that okay? >> i want to express my thanks judge, to you and the fellow panelists. enjoyed the discussion. interesting first amendment, interesting preemption cases, and hopefully some of these issues will be joy joined be some additional state law here. >> i would only add in addition to my thanks to this great terrific conversation we are
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often used to thinking of messy constitutional litigation and interacting regulations as a bad thing. i think these are some of the most important foundational questions about not just a regular system but about f our constitutional order between state, economic values. we will learn a lot in these cases without and being part of a national conversation about it so just as that today i think we're going to learn a lot so thank you. >> paul, you get the last word. >> thanks so much again, judge. i would just add how far are we really from that scenario you describe of regulating what happens? if you look at california's data protection law and how it affects cookies, look at different disclosures required to overcome maybe the difference here is a number of states care about these things just as much as california does, and that is what's going to cause the effects, but thank you again for the opportunity to participate. >> thank you all for a lively, informative discussion.
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i enjoyed it very much, and i will turn things back over to alida. >> thanks so much,so judge, and our panelists. just a gripping and fascinatingg discussion. on behalf of the federalist society i want to thank you all for your time and insight and vigorous and interesting discussion. also want to thank our audience for joining the discussion. we welcome listen feedback by e-mail. and we invite you to join us again two weeksby from today, jr the final gripping discussion in this series. as always keep an eye on our website and e-mails for announcements about other upcoming virtual events. thank you all for joining us today. we are adjourned. >> the u.s. senate returns from their fourth of july break today
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to debate president biden's nominee for undersecretary of state for civilian security, democracy and human rights. as a formative look at at hew heads the alliance for peace building. senate majority leader chuck schumer has one centers it's going to be a busy month with late nights and we can debate on infrastructure bill. and the 2022 federal budget. the senate gavels in at 3 p.m. eastern with a bow to limit debate on the state department nominee at 5:30 p.m. eastern and, of course, live coverage of the senate is on c-span2. >> tonight on "the communicators." >> republicans and democrats have been attacking big deck from all sorts of ankles d that the trust is one of them. they have both coalesced on we need tougher antitrust laws can use more antitrust enforcement of to go after tech companies but they both have very different reasons for doing so even though they sort of coalesced on the same solution.
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for democrats seem to be rooted in in a sort of very typical for democrats animosity toward the businesses in general and skepticism about corporations in general and need to shrink them down to size. and for republicans it's really tied to the sort of culture war against technology companies in general way they perceive them as being biased against conservatives, moderate content or corporate culture. so the effects push against detectors the attackers were tied to the general feeling that tech companies are out to get them. >> watch "the communicators" with recent magazines elizabeth nolan brown on a recent article "the bipartisan antitrust crusade against big tech." tonight at eight eastern on c-span2. >> c-span is your unfiltered view of government. we are funded by these television companies and more inclin

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