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tv   Legal Experts Discuss Social Media Content  CSPAN  July 10, 2021 1:04pm-2:30pm EDT

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country. of my accounts, in addition, we are asking the court to oppose punitive damages on these social media giants. we are going to hold big tech very accountable, this is the first of numerous other lawsuits that i assume will follow. but this is the lead and i think it is going to be a very, very important game changer for our country. it will be a pivotal battle in the defense of the first amendment and in the end, i am confident that we will achieve this for american freedom and that the same time, freedom of speech. [applause] >> next. regulating social media content, hosted by the federalist society. alida: welcome to our se
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discussion series on free speech in social media. i'm alida kass, vice president for strategic initiatives of the federalist society and director of the freedom of thought project, a new initiative to address emerging challenges to freedom of thought, conscience, 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 in social media. this is the fifth in a six part series on free speech in social media all moderated by judge katsas. we also invite you to join us again two weeks from today, thursday, july 22, at 3:00 p.m. eastern for our final discussion. as always, please note that all expressions of opinion are those
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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&a feature on the bottom of the screen. if you are registered for cle, don't forget to complete the sign in form for this program. the sign in form is available on the cle page and you can find the link on the event page for today's event. with that, i'd like to introduce our moderator for today's panel. judge katsas was appointed to the d.c. circuit in december 2017. after graduating from harvard law school, he served as a law clerk to judge edward becker on the 3rd circuit and to justice clarence thomas on the supreme court. for 16 years, he practiced at jones day where he specialized in appellate and complex civil litigation. he has also served as assistant attorney general for the civil division of the justice department, as acting associate attorney general, and as deputy counsel to the president.
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before joining the bench, judge katsas argued more than 75 appeals, including three cases at the supreme court. i'm now going to turn this over to judge katsas to frame the discussion and to introduce our panelists. judge katsas, thank you for being with us today. the floor is yours. judge katsas: thank you. as alida said, this is the fifth of a six part series on free speech in social media. these panels are sponsored by the federalist society's freedom of though 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
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view, you would expect to be subjected to criticism and correction in the free market of ideas. today, it seems that unpopular speakers face a lot worse. if you express a politically unpopular view, you are at risk of losing your job, being hounded out of the university, or losing access to various, basic sources, including, as relevant here, access to social media platforms. our last two panels looked at specific efforts by government to regulate and mitigate this kind of censorship by the big tech platforms like facebook, and twitter, and google through
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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 a common carrier under ohio common law, and a suit by a bunch of states against facebook for monopolization 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 the 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
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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 if the user of a service resides in texas and the communication is stored or recieved in texas. our first two panels look at sources of protection for the big tech platforms at the federal level, the two most obvious ones, one is the first amendment, which affords some protection to these companies but also may tolerate commentary type regulation under the logic of turner v. fcc, which upheld must-carry rules imposed on
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cable companies. the other source of federal protection against state regulation that we've already put on the table is section 230 of the communications decency act, which seems to give pretty broad immunity to platforms 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 censor the third party speech, or as they would put it, to moderate their content. today, we will have a broader focus. we're going to look at some other possible sources of federal preemption. one of them is looking at what the fcc might do at the federal
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level either to regulate, to itself regulate the content moderation or censorship practices of the platforms and/or to prevent the states from doing that. and another source of preemption we'll talk about is the dormant commerce clause of the constitution, which is the doctrine that congress, by authorizing -- the constitution, by authorizing congress to regulate interstate commerce, preempts state regulation that either discriminates against interstate commerce, applies extraterritorially, or unreasonably burdens interstate commerce. and we are also going to talk a little bit more generally about a question that might have
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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 perhaps at both. we've got a great panel to address these issues, so let me briefly introduce them. brendan carr is a commissioner on the federal communications commission. he has also served as general counsel of the fcc as the lead advisor to chairman ajit pai. on wireless issues and as an attorney in the fcc's general counsel's office. before joining the commission, he practiced law at -- he graduated from the top of university law school and was a
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clerk on the u.s. court of appeals for the 4th circuit. daniel francis is a thurman 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 family trust -- antitrust with two multinational firms. he holds a law degree from trinity college at cambridge, from harvard law school, and from nyu. paul watkins is the managing director of potomac global partners. he focuses on regulatory issues involving financial technology. mr. watkins founded the office of innovation at the consumer
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financial protection bureau, and he 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 thatcher and a securities associate -- he graduated from harvard law school and heed to -- and he too clerked for judge shedd. i will 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 so you do not have -- if you do not have a pencil handy. the code is fotp579.
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fotp as in freedom of thought project and 579. >> thank you for that kind introduction, it is great to join you and the esteemed panel to talk about the vitally important interests and i am reminded about your opening remarks to the line from the new york times editorial board member, back in 1970 and he said that diversity of opinion is the lifeblood of our democracy. back then, we were coming out of an era of groupthink and there was a deep embrace particularly in the left that diversity of opinion and range of ideas and that is why in 1970, the modern-day op-ed page launched in the pages of the new york times because they wanted to promote ideas and perspectives that were not necessarily going to be reflected within their actual numbers of the editorial
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board. you fast -- fast forward today and we are on the back end of the trend and it is a liberal trend toward orthodox thinking and it is a pendulum, but hopefully we can find a way as a cultural matter to return to that era of greasing of diversity in opinion. i think there has never been an industry where there has been a wider gap between power on the one hand and accountability on the other. it is a chasm today. regulators at the state and federal level are looking at trying to close that gap between power and accountability. this series has explored, there is a lot that can do on the section 230 front. i think the fcc has a role to play in fleshing out section 230. it is in the communications act. i think we have authority to interpret it and i think courts
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have given to expensive of a reading of the language in section 230 as justice thomas pointed out in some of his statements. i think the debate now goes beyond section 230. even section 230 reform, which i think is necessary, it is not going to address a lot of the abuses of power the people on the political left and political right see taking place within various big tech platforms. i think 23 reef -- up to 30 reform is a great starting place and we need to go beyond that and that is where this question comes in because i think how the states are limited in what they can do in terms of directly interpreting section 230 and limited might be even too weak of a phrase there, but i think states can step in and oppose transparency obligations on these platforms, they can impose what i would describe as nondescript nation or accountability standards, meaning if you are going to
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apply a term of service, let us say you don't want violence on your platform, the state can step in and say, you have to do that across the board, you cannot take down speech from the political left or political right -- which is a permanent antidiscrimination role where you can -- ruling senate where you can look to some civil rights laws and apply those to big tech, including anti-discrimination on race, gender, but including clinical ideology. some states, public accommodation laws, has that type of language today and i think that is what we can look to import from a state law perspective into big tech and there'll be some hurdles to doing that as we talk about and you have talked about in previous sections. the first amendment is a strong argument that will be watched by
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big tech. when you do federal or state reform and i think the answer to that is there is a series of types of cases where the supreme court has recognized that you can regulate act -- entities without infringing their free speech rights. for instance, that must type in cary, the turner case, -- that must type -- the must carry, the turner case. that is the regulation of speech permissible under the first amendment. we have public interest obligations we apply at the fcc on broadcasters. we have rules like that data roaming rule which requires nontitle two carriers, operators, to carry the traffic, the data traffic, of other industries, outside of the common carrier company. there is a lot of analogies and
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precedent that can look -- be looked to in the fourth amendment context, although that is very interesting to me, but it is out of this panel. the panel here is focused on preemption. when you do start to talk about state law or regulation of content moderation practices, again, federal or state, you will have first amendment arguments. when you get to the state law argument, you get to the gumption. -- to the preemption. the main lines of argument for preemption of either some or all state law efforts to regulate content moderation, one of course will be section 230. the other argument is that there has been a general policy recognized by the fcc none regulation or deregulation when it comes to what we call information services, which arguably you can fit big tech within that definition. i think those are two species of
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preemption claims that could be run by to companies almost -- by tech companies, almost regardless of the specific forms of state law or regulation imposed. in my perspective, i think there is a strong argument that state law can survive preemption under both of those lines of attack and i would give you briefly to flush that out. first section 230. section 230 as i interpret it as a 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 sent it is viable. i do not think there is much you can do to disrupt that. i think there would be strong preemption if you attempted to do that through state law. there is a second provision of section 230, that allows for -- the statutory term is any action
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taken in good faith to restrict access to or availability of materials -- the upshot for me is that that second provision of section 230 is the provision that lawfully -- to take down speech. you only have the 230 protection if you are doing it in good faith. which would say, it is probably defined as a matter of federal law, but what that means is there is necessarily a category of takedowns that are bad faith. i would think that you can fit state law or regulation of content moderation under that concept of bad faith takedown. in which case, i think you can survive a section 230 preemption claim. in other words, section 230 is not a provision that says, content moderation in all of its forms is protected by the statute.
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at least as i interpret it. if you leave your speech up, it is protected. if they take it down, there is only 230 preemption or 230 protection if it is good faith within the -- there a fair amount of room at the state law level to regulate bad faith content moderation and some of the ideas i put down in terms of antidiscrimination or takedown that are inconsistent with terms effortless would be in my view -- with terms of service would be in my view a bad thing. the second thing up redemption that i mentioned is there is a line of fcc precedents that talk about the regulation or depending on your perspective, none regulation of information services, which again, this could be considered partnered with title two, title one of the fcc. very briefly, i'll describe the two lines -- two lines of
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precedent and i will put a couple of cases under each bucket to flesh it out. on the one hand, there is a case that is strongly recognized -- and strongly reckon i said the concept of a federal policy of nonregular asian, there is a circuit case that dealt with voice over internet protocol. minnesota tried to impose other obligations on these providers and the fcc stepped in and said no. we generally have a policy of none regulation of voice. that decision not to regulate preempts minnesota state law. the other case in that bucket of strong origination -- of strong recognition as a reckon that a recent case in york or new york state imposed a requirement that required internet providers to offer $15 month low income services in the -- and the
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district court decided that new york state law is now -- based on the concept of conflict in field preemption. third, the case i would put in that bucket is our decision in 2017 where we moved internet providers from a title two revelation from a title i. we said that decision carries preemptive force and therefore, crafting -- preempting state law to the contrary. that portion of 2017 was not upheld by the d.c. circuit judge and that leads to the end of that second category, which is courts that have taken a less expensive you of the deregulatory force -- preemptive force of the revelation. end would be that a said no fcc to move from title to to title i, that is not deserving of at least very weighted -- weighty
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captive forces. a second i would put in that bucket is -- in a separate case is that he thought the appropriate case the court should revisit, the broad printer force that was given to decisions not to regulate and finally, a third case i would put in that vein is a recent district court case in the not circuit in california, net neutrality and isps and a district court denied a state request by isps and said, no, the fcc did it -- to directly and move from title two to title i does not preempt the california net neutrality laws. some interesting lines of precedents. i argue that you can put all of those together and regardless of which way you can come out, or
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otherwise, given that you 30 has that -- given that 230 had the idea of good faith that there is room for states directly bad faith content moderation and otherwise, there is not the same comprehensive federal regime issued in traditional telephone services that would displace the feel of the content moderation at the state level. i will stop there and reach the room for question. those are the two species of preemption claims i think can be raised against state law, antidiscrimination obligations, and how i would think about the answer. >> 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
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constitution leads for state platform regulation. and try to give a sense in general terms of where the most important constraints are and how in our constitutional order, articulate economic, they might react in this wave of state regulatory efforts we are seeing. i will take a moment to set the scene as i see it. we have seen over the last two decades a really extraordinary set of technological and commercial change throughout our economy. we have seen the rise of pot farm businesses, that are often diverse in different ways and sometimes i think are suppressed by big tech. it is true the platform businesses what we think of as digital economy is radically changing, everything from retail into the way we get around in a city to operating systems, there seem to be a digital platform everywhere. over the last four or five
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an extraordinary backlash against the rise. i think there is a bipartisan consensus that we must do some kind of radical set of changes, regulatory, cultural, or otherwise, and talk about exactly what needs to be done, and why. so we have seen the connotations, and our federal assistance, one of the benefits, the way the political system is organized, is local but particularly state governments, not just coequal but preeminent discussion, so we have seen more enforcement levels at the state of, antitrust suits led by state coalitions, we have seen a lot of registration, in california, anti-censorship laws, you touched earlier on florida,
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taxation measures a at digital businesses, maryland adapted a tax on advertising that is a little unusual, and we also mentioned that it would make google a common carrier. so, with state 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 populations for citizens and businesses and but with their feet and find a place they like best.
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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 regulated terms and rates of railroads in way that threatened integrity of all systems.
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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. the second case toward the end of the 19th century was state regulations of railroads prompted the supreme court to
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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 stators, extraterritorial regulation where estate makes
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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 past. to be sure, i want to be clear
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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 efforts. it exerts the maryland tax
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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 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
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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 viewed by a user in texas. if you are a michigan platform regulate speech by a michigan
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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 level, suing companies and being in regulatory roles.
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-- 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 years close to 80%. the closest competitor's taxes in 2010, around 5% of venture
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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. it is a surprise red states look at this and say, where did this come from?
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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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so it was seen by just about everybody at the state. each viewing of an ad is potentially a violation and you can find each violation for each up to $10,000, and you have fines that are close to $100
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billion, and then you come in, and by now, you can settle for tens of millions. states do this sort of thing all the time, and it is stored merrily powerful and effective, and i am really surprised that it is not in this structure. you can think, departing a little bit, but some of you are familiar with arlene flowers that came up in washington, and this woman was selling flowers for this wedding ceremony and then other things, but the penalties in that case came because violating washington's discrimination law is considered a per state of the consumer statute, and that is why the penalties were so large. so a violation of state consumer fraud that you are failing to
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act in good faith, it seems to me that would be a productive path for stage two to go down. but i think the real concern and the real productive activity here is encouraging innovation because we are in this unique, historical moment where platforms have power, and it is moving in a direction where it is unlikely we will need these platforms long-term. and this is the way it proceeded in the past, you are on top one decade and then nobody needs it the next decade, through block chains and smart contracts, there are many companies competing with social platforms where the users have more control over their own content, where they can be paid directly for their content, and in the regulatory responses and the judicial decisions that we somehow solidify these plot size necessary for the regulatory structure.
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they take action required by some moderation of a platform, and an example of what not to do, and the facts here just fit together so well that i think could not make it up. one of the big innovations currently is in block chain and within block chain, cryptocurrency, and under the trump administration and the fcc and the secretary of the treasury, there was very little guidance given to this industry, very little clarity with the exception of speeches, and in particular, there was enforcement action brought by
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the fcc against the social media company that they had heard of at the time called telegram. telegram tried to launch a token that could be traded through its messenger service, and they did it through a generally accepted framework, but they said you can't do that, we are going to shut down your token offering. fast-forward one year, they are all ticked off on social media and what does donald trump, junior, say? follow me on telegram, it would have been a much more viable competitor to facebook trump's ecstasy let them develop in a new direction and compete -- trump's fcc let them develop in a new direction and compete. folks who are upset about the social platforms are not willing to allow the competitive activities, and i think they are really going to solidify the monopolies that are currently in place. what i think the path is for
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states that are upset about this is to coordinate, using regulatory frameworks that have traditionally been allowed under preemption to coordinate what they are planning to do, which gives them joint market power and to jointly encourage innovation in all sorts of areas, in policy, and in a number of other areas so innovators are moving into these states and the states jointly have market power within the country that i think will probably trend toward a bifurcated market. those are my brief remarks, and i will turn it back to you, judge, and the over to continuing the conversation. judge: before we continue, let me reread this cle code for anyone interested.
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once again, it is fotp as a freedom of thought project, 579. all right. let me give each of our panelists may be about two minutes to respond to anything that they heard from their co-panelists. brendan? brendan: a lot of interesting discussion. i'm not sure if i have direct rebuttal, but one thing i will touch on is there have been a lot of interest recently, including out of thomas's recent statements that we should potentially classify big tech dividers either as common carriers or places of accommodation. my view, that is what we really need to do is look to apply
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antidiscrimination obligation on big tech. i would say that common carriage and the law are precedent in past examples where we have some form of antidiscrimination requirements on those entities, but that does not mean we necessarily declassified big tech as either common carriers or places of accommodation. rather, we take the core concepts of antidiscrimination apply there and bring the word into these websites. judge: daniel? daniel: thank you. i would just have a little to say by way of reaction, so to commissioner carr, i absolutely agree with what it means about
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common carriers. i think it has been traditionally understood and they are erratic different from those we associate with digital platforms, so i often hear this idea that facebook, google, or whatever else, it is exactly like networks, i think that is directly wrong. i think what makes the real work for example is the competition and choosing between monopoly, where you allow network competition where you can look at variable costs, and this was all happening in the 1880's, so i think the common frame obscures what it actually reveals given the economics of it and the platforms today, to clearly and product differentiation. i take the idea of bad faith to be central to your view of the right way forward, and i wonder if i could invite you to see a little more about what that means and how we could identify it so that the publisher or
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platform can see if they genuinely believe a certain kind of speech is harmful, seditious, or it is uncongenial for their mission, but would it be bad faith to moderate on that basis? mr. watkins, i strongly agree the focus is looking for ways to avoid a heavy-handed literary approach -- regulatory approach and create conditions for entry. i want to push back on any monopoly, but it is clear to me why allowing cryptocurrency or any antisocial media network to be more competitive in the provision of social media any more than allowing it or prohibiting it from any other products. it was not clear to me why we see that in antitrust apps.
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otherwise, this has been great, thank you. judge: paul? paul: let me respond to that, thank you for the question, professor. it comes down to a phenomenon we are seeing through the economy around credit finance, which is the benefit of being able to transact and engage in commercial activity through one single portal. you have seen social media push into this dramatically. facebook wanting to compete with amazon as a place to buy goods and services, and so forth. when you have your own currency tied to that, there are real deficiencies around taking that step into commerce and it also makes it very efficient for users to monetize cap content because they can potentially charge, they can sell -- there is something called a
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non-fundable token that can show ownership around a particular digital representation, help them transact and give way to particular poster artwork, so there is a lot of functionality there that would allow an insurgent to compete, and for them to come in, they would 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. it is a particular area of concern and there is a speech by one of the commissioners, and i'm getting into the weeds to answer your question, so i apologize for that, but about their our block chain based derivatives trades that are occurring outside of an exchange, and it is hard for the cftc to regulate that because they regulate exchanges and they
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expect the exchanges to regulate the activity that occurs. i think this is common for the structure. you can see it in money laundering and regulators impose all of those things but on financial institutions, and then on customers. if you do not move the institution anymore, and it is just customers interacting directly, that can cause them to be worried because a lot of them depend on the platform. my fear here is that folks come in and say we need this regulatory, comprehensive structure that facebook, twitter, so forth, are imposing the content and then the next generation could skip over the need for that platform and then be perceived as unlawful because regulators would feel like the content was not sufficiently regulated. that is the backdrop that i
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think could or should cause some -- should cause some caution. repressor, if could ask you a question, not necessary in the social media context but financial relation, some of the new york regulators say, hey, we want you to either reduce or stop lending to energy companies if you are a financial business doing is this in new york, and i believe we saw some related commentary by eugene on some recent lawsuits saying that they are real stretch, unless there were regulators directing companies to ban the president or say this is a good idea. i'm curious if you think there are certain facts that might be discovered involving regulatory pressuring platforms that would
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then be a dormant common clause violation going the other way, where red states say, state regulators, you are now trying to extend your policies entire state. you are doing it informally and indirect, but we are upset about it and we are going to sue. i don't know if they exist or not. judge: daniel, why don't you take that one, and then we will get back to the question for brendan. daniel: i do not know the details of that, i would love to hear more about it, but what the thought would be looking for, new york would be an protection some weight favoring in-state activities and it is not obvious to me. it is a touchtone for regulatory and it is not whether all state
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regulation does that. it's whether you are making market access conditional on something that happens wholly out-of-state. like i am requiring it 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. judge: brandon, 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 -- contributors who share that view. editors of the new republic, same thing on the left. editors ,
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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 you are very clear, i have a political angle that i want to take and i want to moderate consistent with that, i think
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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 are very -- continue to do that. only apply this to general-purpose. it's not quite the same thing i
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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 neutrality and the history that's in the supreme court and in our court.
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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 you have the discretion to treat broadband providers as
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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? there are certainly arguments you can make that there are big versions -- that there are
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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? >> yes. section 230 in the munication's
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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 can be defined as bad faith.
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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 of some of the proposals to reclassify big tech or other platforms.
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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 contexts.
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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 facebook is? and is that even a meaningful
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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 briefed. there's no way this is a miserable exercise for everybody involved.
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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 california or washington state or new york state about how that is treated, that activity falls
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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 without having an office and premises built there. this goes beyond that.
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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. i would say number one, as guidance to a state, think very hard about your jurisdictional
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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 business so that consumers in kentucky see that kentucky
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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 clause. -- under the dormant commerce clause.
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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. there are lots of providers that operate more in some jurisdictions than in
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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 arguments for preemption. i don't know if it would completely eliminate the need for the ability for states to
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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 power. i think it was that blind spot that resulted in this massive concentration of power in
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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. it strikes me as if to states are forming an agreement to jointly regulate, that might be
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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 admission. if you are licensed in this
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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. we are running over. i'm told that is ok. which is, california regulates
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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 working the way it is supposed to. the dynamic you described is known in federal literature as
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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. the state might say all right, that's how i'm going to do
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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 computer screens in texas? and that seems for millie and
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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. conflicts. i am skeptical sometimes --
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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 to you and the fellow panelists.
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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? if you look at california's data protection law, if you look at different disclosures required
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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. we invite you to july 22 for the
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final gripping discussion in the series. as always, keep an eye on our website and email about announcements about upcoming virtual events. >> former president trump aide's remarks at the political action conference in dallas on sunday. watch live at 4:44 eastern or listen on the free c-span radio app. >> today, on "the communicators," -- >> republicans and democrats have been attacking from all sorts of angles and antitrust is one of them, but they have coalesced on we need antitrust laws, we need to use more antitrust enforcement to go after tech companies, but they both have different reasons for doing so, even though they coalesce on the same solution. free democrats to be rooted in a sort of typical for democrats
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and just toward big businesses in general and they need to strengthen the size, and for republicans, it is tied to a culture war with technology companies in general, where they can see them as being biased to conservatives, either in the way they moderate content or their culture. so big tech is really tied to the general feeling that tech companies are out to get them. >> watch "the communicators," with elizabeth nolan brown on her recent article on big tech, today at 6:30 p.m. eastern on c-span. >> now, a conversation with minnesota attorney general keith ellison about the trial of former minnesota police officer derek vi

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