The social media entity formerly recognized as Twitter, now rebranded as ‘X’ under Elon Musk’s stewardship, encountered a setback in its efforts to challenge a new Californian law. This regulation mandates that large social media firms transparently report their content moderation policies and activities.
Despite ‘X’s’ legal argument that the law encroaches on free speech rights, U.S. District Judge William Shubb upheld the statute. His ruling emphasized that while the law imposes significant reporting duties on companies, it remains within the permissible bounds of the First Amendment.
The law targets platforms with considerable revenue, requiring biannual disclosures detailing their handling of problematic content. Judge Shubb’s eight-page decision highlighted the necessity of such transparency for consumer choice, referring to the “terms of service” as a pivotal factor for users when selecting a platform.
The ruling comes amid broader challenges for ‘X’, which has seen a significant drop in U.S. advertising revenue since Musk’s takeover. Advertisers have expressed concerns over the platform’s content moderation, resulting in a 55% year-over-year decrease in monthly ad revenue.
Moreover, ‘X’ is navigating regulatory scrutiny in the European Union, following an investigation launched in response to the handling of content related to recent conflicts in the Middle East.
