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tv   Legal Experts Discuss Social Media Content  CSPAN  July 13, 2021 2:35am-4:02am EDT

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best left to states or the federal government. >> welcome to our showcase discussion series on free-speech and social media. and the vice president for strategic initiatives of the federalist society and director of the freedom of thought projects, new initiative to address emerging challenges to freedom of thought, content, and expression. this afternoon, july 8, 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 and a six part series on free-speech and social media moderated by a judge. we also invite you to join us two weeks from today, at 3:00
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p.m. eastern for our final discussion. please note all expressions and opinions are those of the experts on today's call. after our speakers give their opening remarks, we will turn to audience questions, time permitting. if you have a question, please enter it in the q feature at the bottom of your screen. if you are registered for cle, do not forget to complete the sign in form for this program and the sign inform isabella on the page -- the sign in the form is available on the page and you can find that with the link for today's event. our moderator for today's panel, the judge 17. after graduating from -- the judge was appointed in september, 2017. he served with justice clarence thomas. he practiced at jones day where he specialized in appellate and complex litigation.
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he served as assistant attorney general for the civil division of the justice department, as acting is so city -- associate attorney general. and as deputy counsel for the president. he argued 75 appeals including three cases at the supreme court. i will turn this over to the judge to frame the discussion and introduce panelists. thank you for being here today. >> thank you. this is the fifth of a six part series on free-speech and social media. these panels are sponsored by the federalist society's freedom of thought project which explores what seems to be an increasing trend to restrict and punish controversial speech and controversial speakers. a traditional view of speech was
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that a remedy for bad speech is good speech. so if you expressed an unpopular view, you would expect to be subjected to criticism and correction in the public sphere -- the free market of ideas. today, it seems unpopular speakers face worse. if you express a politically unpopular view, you are a risk for losing her job, being hounded out of a university, or losing access to various services. including, as relevant here, access to social media platforms. our last two panels looked at specific efforts to, by governments, to regulate and mitigate this kind of censorship
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by tech platforms. like facebook, twitter, google, through either common carrier regulation or antitrust. we talked a lot about a couple of big cases in the news, including an ohio suit against google search services to have that declared a common carrier under ohio common law. and a suit by state -- a bunch of states against facebook for monopoly 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 a relevant market. today we might get into some or aggressive variations on a
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theme. state efforts to regulate political aspects of the content moderation of these platforms. one example of that is a proposed statute that would prohibit social media from engaging in viewpoint discrimination if the user of a service resides in texas and the communication is stored or received in texas. our first two panels looked at sources of protection for big tech platforms at the federal level. at the two most obvious ones. one is the first amendment. it affords some protection to companies and may tolerate common carrier type regulation
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under the logic of turner versus fcc. it imposes rules on cable companies. the other source of protection against state regulation is section 230 of the communications decency act. it seems to give broad immunity to platforms with regard to decisions about what speech, what third-party speech to permit or suppress. 230 in a broad range seems to preempt any state law by platforms to allow their party speech or by platforms to censor third-party speech. or, as they would put it, to moderate the content. today we will have a broader focus. we will look at other possible sources of federal pension.
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-- preemption. one is looking at what the fcc might do at the federal level either to regulate to itself, regulate content, moderation, and practices of platforms, and or to prevent states from doing that. another source we will talk about is a dormant commerce clause of the constitution. it is a doctrine that congress, by authorizing congress, the constitution, sorry, by authorizing congress to regulate interstate commerce. states regulation that discriminates against interstate congress -- interstate commerce, applies extra territorially or unreasonably burdens interstate commerce.
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we are also going to talk generally about the question that might have residents to members of the federalist society. if we think big tech censorship is a problem that some government should respond to, should that response happened at the federal level or at the state level, or perhaps above? -- or perhaps, at of? -- at both? have a great panel. -- we have a great panel. brendan carr is a commissioner on the federal communications commission and has served as general counsel of the sec, as lead advisor to chairman pai on wireless issues and is an attorney in the fcc general counsel's office. before joining the commission he
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practiced appellate and telecommunications law at wiley rye. he graduated from the catholic university law school and clerked for a judge on the u.s. court of appeals on the fourth circuit. daniel francis is a foreman fellow at the new york university school of law where he writes about constitutional law, competition law, and antitrust. he previously served as a deputy director, associate director, and senior counsel at the federal trade commission, where he focused on antitrust enforcement in digital markets. for 10 years he practiced antitrust 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 regulatory issues
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involving financial technology. mr. walken's founder the office of innovation at the consumer financial protection bureau and headed up the civil litigation division of the arizona attorney general's office. earlier in his career he was an m&a associate at simpson basher and a securities litigation associate at covington burroughs. he graduated from harvard law school and he clerked for judge shedd. four i turned the floor over to our speakers, i'm going to give you the code you will need to claim credit. i will do this now and try to remember to do it again later in the presentation if you do not have a pencil handy. the code isfotp-579.
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fotp579. commissioner, the floor is yours. >> thank you, judge, for that kind introduction. it is great to join you in this esteemed panel to talk about these important issues. i am reminded by your opening remarks to align from a new york editorial board member in 1970 he said diversity of opinion is the lifeblood of our democracy. we were coming out evan era of groupthink and there was a deep embrace particularly of diversity of opinions and a range of ideas and in 1970 the modern-day op-ed page launched and the near times. they wanted to promote ideas and
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perspectives that were not necessarily going to be reflected within the members of the editorial board. fast-forward to today and we are on the back of that trend. it is a trend back toward orthodox thinking. it is a pendulum. hopefully, we can find a way as a cultural or legal matter to return to that era of embracing diversity of opinion. it does have a direct bearing on where we are with big tech today. i think there has never been an industry where there has been a wider gap between power and accountability -- between power and accountability. it is a chasm today. regulators at the state and federal level are looking and trying to close that gap between power and accountability. this series has explored and there's a lot that can be done on section 230. i think fcc has a role to play
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fleshing out section 230. it is in the communications act and i think we have authority to interpret it. i think courts have given to expansive reading of language in section 230 as justice thomas has pointed out in some of his statements. i think the debate goes beyond section 230. even section 230 reform which is necessary is not sufficient to address a lot of abuses of power we see taking place on various tech platforms. i think 230 reform is a great starting point and we have to do it but we need to go beyond that and that is part of where the question of preemption comes in. i think has states are limiting what they can do in terms of directly interpreting section 230. limited might be too weak a phrase. i think states can step in and impose transparency obligations on platforms, they can impose
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what i would describe as nondiscrimination or accountability standards. meaning, if you're going to apply a term of service. let's say you do not want violence on your platform. i think the state can step in and say you have to do that across the board. you cannot take down speech from one side and not vice versa. there's a third level of this which is affirmative antidiscrimination. you can look to public accommodation law and some civil rights laws and apply those to big tech including prohibiting discrimination on race, gender. including political ideology. some state public accommodation laws including that of washington, d.c., has that language today, so i think that is what we can look to import from a state law perspective. they're going to be some hurdles to doing that.
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as we have talked about any of talked about in previous sessions, the first amendment. the first amendment is a strong argument lodged by big tech whether in federal reform or state reform. i think the answer to that is there are a series of types of cases where the supreme court recognized you can regulate entities without infringing their free speech rights. we have must carry, the turner case, prune yard cases. it goes beyond that. state defamation and tort law that is effectively the regulation of speech permissible under the first amendment. we have public interest obligations we apply at the fcc. on broadcasters. and rose like this data roaming role that were -- and rules that like this data roaming rule that requires nontitle to date operators to carry traffic, data traffic, of other entities,
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outside completely of the common carrier context. so i think there is a lot of analogies and precedents that could be look to in the first amendment context. although again that is very interesting to me but it is a little beside this panel. the panel here is focused on preemption. when you start to talk about state law or regulation of content moderation practices. again, federal or state you have first memo and arguments. uniquely, when you go to the state law approach, you will have preemption arguments. as i see it tech would likely lodged two big main lines of argument for preemption of either some or all state law efforts to regulate content moderation. what is going to beat section 230. the other -- one is going to be section 230. the other argument they could lodge is there has been a general policy recognized by fcc of non-regulation or deregulation, when it comes to
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what we call information services, which argued lee, you could fit big tech within that definition -- which, arguably, you could fit big tech within that definition. those are two arguments that could be run by tech companies regardless of the specific form of state law or regulation imposed. in my perspective, i think there is a strong argument state laws can survive preemption under both those lines of attack. first, section 230 c1 is a very broad provision that effectively says, if you leave someone else's speech up on your website, you are not liable for that speech. the person who said it is liable. i do not think there is much you can do or frankly should do, to disrupt that. i think there would be strong preemption if you attempted to do that in state law. there is a second provision of section 230, though, that allows
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for the good faith, the statutory term is, any action voluntarily taken in good faith to restrict access to or availability of material. the statute goes on. the upshot for me is the second provision of section 230 is the prevention that lawfully, to the right interpretation should apply to decisions to take down speech. therefore you only have the 230 protection if you are doing it in good faith. good faith is probably properly defined as a matter of federal law. what that means is there is necessarily a category of takedowns that are bad faith. so i would think you could fit state law regulation of content moderation under that concept of bad faith takedowns, in which case i think you can survive a section 230 preemption claim. in other words, section 230 is not a preemption -- provision
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that says content moderation in all of its forms is protected by the statute as i interpret it. it is if you leave speech up, your protected and no state law can revert that. but if you take it down there's only 230 preemption protection if it is good faith within the meaning of the statute. so i think there's a fair amount of room at the state law level to regulate bad faith content moderation. some of the ideas i put down in terms of anti-disco nation or takedown cash -- antidiscrimination or takedowns in terms of service would be bad faith and could survive at 230 claim. the second i mentioned is, there is a line of fcc precedent that talks about the regulation or, depending on your perspective, nonregulation, of information services. again, this could be part of, we
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have title i and title ii of fcc. let me briefly describe two lines of cases, or lines of precedent. on one hand, there is a case that strongly recognizes this concept of a federal policy of nonregulation. there was an eighth circuit case that dealt with voip. minnesota tried to impose tariffs and obligations on voice providers and the fcc stepped in and said, no, we have a policy of nonregulation a voice and that has primitive effect. the eighth circuit says yes, you're right -- has preemptive effect. the eighth circuit says yes, you're right that prints minnesota state law. the other case -- that preempts minnesota state law. the other case out of new york new york district court where new york state imposed a requirement that required internet providers to offer $50
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per month low income services -- $15 per month low income services. the district court decided the new york state law is stayed based on a likelihood of success based on a concept of conflict and feel preemption that emanates from the committee cases act. third, a case in that bucket would be our own decision at the fcc in 2017 where we moved internet providers from a title ii regulation to title i. we said decision to deregulate from title ii to title i, carries preemptive force. therefore imprints any state law to the contrary. -- therefore, it preempts any state law to the contrary. it was not. me to -- it was not. it was not upheld by the dcc.
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the d.c. circuits said no, fcc, your decision to move from title ii to title i to deregulate we do not think is deserving, at least weighty primitive force. -- preemptive force. a second opinion would be justice thomas in the separate void -- voip case said he thought the appropriate case the court should revisit broad preemptive court -- case the supreme court given to decisions not to regulate and a third case i would put in that vein would be a recent district court case in the ninth circuit of california. california imposed net neutrality like requirement on isps. and the state denied request by isps and said the fcc decision to deregulate to move from title ii to title i does not preempt the california net neutrality law. so, interesting lines of
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precedents and i would argue you could put those together and regardless of which way you come out on the broader doctrine question -- -- estes thomas two, or otherwise -- that justice thomas two or otherwise -- teed up, or otherwise. that there is space to regular bad faith content moderation. otherwise there is not the same federal --at issue in traditional telephone service that would displace the field of content moderation at the state level. i will stop in the room for questions. -- i will stop and leave room for questions. those are two species i think could leave room for state law antidiscrimination and how i would think about answers. >> thank you. daniel? daniel: a pleasure to be here and talk to you about my favorite corner of constitutional law.
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i want to talk about that the space that the federal constitution leaves for state platform regulation. and to give a sense of where the most important constraints are and how our constitutional order , particularly economic, basing provisions might react to this extraordinary wave of state regulatory efforts we are seeing. i will take a moment to set the scene as i see it. over the last two decades we have seen an extraordinary set of technological and commercial change throughout our economy. the rise of platform businesses that are often diverse in different ways. sometimes i think they suppressed by the label big tech. it is true platform businesses, what we think about the digital economy, has radical -- is radically changing everything from retail to the way we get around in cities, to operating systems. there seems to be a digital
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platform everywhere. for the last four or five years in a friending for this conversation, an extraordinary and multidirectional backlash against some consequences of the rise of platforms. i think there is a bipartisan consensus we must do something, some kind of radical set of changes, reg and i, cultural, or otherwise -- regulatory, cultural, or otherwise. there is less consensus about what needs to be done and why. we have seen a wave of accommodation and in our federalist system one of the benefits of the way our political system is organized is local but state governments are not just coequal but in some cases preemptive -- sorry preeminent in that discussion so we have seen law enforcement efforts of the state level from an antitrust suit led by state coalitions including yesterday. we have seen a lot of legislation, privacy legislation.
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and in california. anti-censorship law. you touch on texas and also florida. taxation measures aimed at digital businesses. maryland adopted a tax on digital advertising in ways that is unusual. and moving to designate google as a public utility or common carrier. with states driving the conversation and framing many productive conflicts, what does the federal constitution have to say? the baseline is, we are used to having a complicated regulatory --in this country. divergences in state law and tort law and consumer protection statutes. there is a level of diversity and complexity that comes with any healthy federalism. that means individual states can set rules through their local
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populations for citizens and businesses and but with their feet and find a place they like best. that preserves room for regulatory experimentation and learning. these are classic benefits of life in a federal system. but there are limits to what the federal constitution will tolerate. on two occasions in history, the emergence or integrity of a national economic space has been seriously jeopardized by diversion state regulations. one was the articles of confederation in 1780, when states adopted a variety of inconsistent or conflicting trade regulations that field political discontent. -- that fueled local discontent. in the last two decades of the 19th century national market was emerging, railroads and telegraph. that system faced the prospects of death by 1000 cuts as the vigil states regulated terms and rates -- as individual states
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regulated 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 led colonists to come together and states to come together at philadelphia and enact the constitution including the interstate commerce clause we have today. as we sit here in 2021 where used to thinking about as a basis for affirmative federal legislation. but at the time the constitutional convention, pretty slender, the balance of evidence suggested the focus was on what james madison said later, the focus of the commerce clause was to prevent a state regulatory action. the supreme court in a series of 19th-century decisions endorsed that understanding.
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the second case toward the end of the 19th century was state regulations of railroads prompted the supreme court to invigorate dormant commerce clause law. the e.r.a. idea was the prevented certain regulations that in fear or unreasonably burden interstate commerce particularly interstate networks important to the national economy, most famously in a decision called wabash in 1886, the supreme court held even intrastate portions of interstate railroad could be regular by states. that prompted the creation of the first federal regulatory agency, the interstate commerce commission in 1887. in both those cases, when the national market was threatened, it was the commerce clause that stepped in. it took a while for the legal framework to settle down. by the first few decades of the 20th century it had done so. the modern consensus became pepper habits three things. discrimination against out of
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stators, extraterritorial regulation where estate makes access to its market contingent on what you do or don't you elsewhere, and unreasonable burden on interstate commerce. something funny happened over the last --years. that model declined. we continue to pay lip service to it but what the court has been focused on, is intentional protectionism. that is for states referring -- preferring internal commerce over out-of-state or interstate commerce. part of the reason for that decline is what we have not seen since the 1980's, away of state measures that threaten to fragment or balkanized the national market. more or less to focus on intentional protectionism. that, today, maybe changing. we may be seeing the first raindrops of a storm of legislation that threatens exactly the kind of thing that led to those very terms in the
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past. to be sure, i want to be clear about the limits of what i am suggesting. there is a lot of room in the constitution for states to go their own way. tort law for conduct for companies, interstate companies, multinational companies, intentionally direct into a state, that is --. state tax law, conduct genuinely located in or attributable to or portion of the particular state, absolutely. but i see in some of this modern wave of legislative and regular efforts, real things of x or torah reality and -- extra territoriality and undue burden in ways that of animated the clause in the past. i want to give two examples. the first is the maryland taxing measure on digital advertising. it is about government --of different state reg latoya efforts. the extort -- state regulatory
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efforts. it exerts the maryland tax authority over all people advertising services in the state of maryland without defining what digital advertising is or what is in the state of maryland. one way to read the statute as it takes conduct to be in the state of maryland, for regulatory purposes, if somebody and maryland can visit it on a website. that is a theme that runs too many state regulatory efforts -- that runs through many state regulatory efforts. and that is remarkable. the last three years the supreme court recognizes sufficient nexus of activity for estate if someone physically shifts goods into your state. for a long time that was not enough to create taxable excess -- nexus. there's a long-standing supreme court case that says you have to have a physical presence and
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premises. three years ago the court said all right, if you are shipping goods into a state that is contact enough. no way, know-how, on that framework, is the fact the user in a state is able to visit your website sufficient contact. so it is really remarkable rage, too many -- reach -- it is really remarkable reach, to many statutes. the other, florida. the first amendment law though florida law has been preliminarily enjoined by federal district court. both those measures, the florida past and the texas proposed, reimposed radical carriage obligations with respect to activity that is -- that has such men about contact with florida and texas, respectively. the most natural reading of the statute, they apply, as long as the relevant activity can be
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viewed by a user in texas. if you are a michigan platform regulate speech by a michigan user, you forward in the reach -- you fall within the reach of this pretty remark will speech obligations in both statutes. those are very broad and go far beyond the railroad context where states were focusing on intrastate portions. that is all i wanted to say by 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
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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 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
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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 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.
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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. 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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administration and the trump's sec and the secretary of treasury, there was very little guidance given to this industry
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with the exception of some speeches. and may be brian brooks. in particular there was an enforcement action brought by the sec against a social media company that almost nobody had heard about the time called telegram. and tillich her most bring to launch a token that could be treated to its messenger service. they did it according to a generally excepted framework but the sec brought enforcement action and said that you can't do that. what this donald trump junior say? go follow me on telegram. telegram would've been a much more viable competitor to facebook if trump's sec had simple let them have their offering and let them develop in any direction and compete on your grams with the incumbents. but if these folks were upset about the social platforms that are not willing to allow this competitive activity, and i think they're going to really
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solidify the monopolies that are currently in place. so what i think the path is for states again that are upset about this is to coordinate, to use existing regulatory frameworks that have traditionally been allowed under preemption, let consumer protection statutes, to coordinate they are planning to do, which gives him joints market power come in jointly encouraging ovation and all sorts of areas in policy and a number of other areas, so that innovators are moving into these states, and so that these states jointly have market power within 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 forward to continuing the conversation. >> great. before we continue, let me
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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 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.
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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. 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.
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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. 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.
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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. 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.
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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 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
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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. 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
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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 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
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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 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
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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 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.
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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 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.
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-- 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 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
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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, 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
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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. 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
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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. 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
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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 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?
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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 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?
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>> 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 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
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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, 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
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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, 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
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contexts. could you just speak a little more on how we would think about -- looking at the texas statute, it appears limited to users 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
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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? 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
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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. 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
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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. >> 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
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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 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.
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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 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
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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. 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
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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 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.
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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 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
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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 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
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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. 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.
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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, 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
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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. 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.
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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 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
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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 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.
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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 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
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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. 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.
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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. 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 are well over time. let me give you all a brief chance to give any concluding thoughts you may have. is that ok? >> i want to express my thanks
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to you and the fellow panelists. i really enjoyed the discussion. really interesting preemption cases. hopefully, some of the cases will be joined because that would mean state law action. >> i would only add, in addition to my thanks to this group for a terrific conversation, we are often used to thinking of messy constitutional negation and interactive regulation as a bad thing. that is not always true. these are some of the most important foundational questions about private and public power. we are going to learn a lot from watching these cases play out and being part of the national conversation about it. i think we will learn a lot. thank you. >> you get the last word. >> thanks so much, judge. i would add, how far are we from that scenario of regulating what happens?
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if you look at california's data protection law, if you look at different disclosures required to occur, maybe the difference is a number of states care about these things just as much as california does. and that is what is going to cause the effects. thank you again for the opportunity to participate. >> thank you all for a lively, informative discussion. i enjoyed it very much. i will turn things back over to you. >> thanks so much, judge, and panelists. a fascinating 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 mr. feedback by email -- we welcome listener feedback by email.
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we invite you to july 22 for the final gripping discussion in the series. as always, keep an eye on our website and email about announcements about upcoming virtual events.
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is the host of this event. >> well, good afternoon, friends and family. welcome to this special event, critical infrastructure or a clean energy future. i am jason grumet, the bipartisan policy center president and innovation council, are smarter cleaner faster task force, delighted to be with you all this afternoon. we have a two-part session today. i have the honor of starting out the discussion with secretary


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