California’s Content Moderation Law Remains Unaffected by Elon Musk’s X

(Reuters) – Elon Musk’s X on Thursday failed to block a California state law requiring social media companies to publicly disclose how they monitor certain content on their platforms.

X, formerly known as Twitter, sued California in September to strike down the content moderation law, saying the law violated its free speech rights under the First Amendment of the US Constitution and the California state constitution.

The law requires social media companies with significant gross annual revenues to prepare semi-annual reports describing their content moderation practices and providing information on the number of negative posts and how they were handled.

U.S. District Judge William Shubb rejected the social media request in an eight-page ruling.

“While the reporting requirement appears to impose a substantial compliance burden on social media companies, it does not appear that the requirement is unreasonable or unduly burdensome under First Amendment law,” Shubb wrote.

X did not immediately respond to a request for comment.

Shubb will meet with lawyers in the case on February 26 for a scheduling conference.

Shubb considered the law’s “terms of service” essential and said their presence could be an important deciding factor for users.

X has come under fire for its content moderation rules, and many companies have suspended advertising on the platform. Since Musk took over X in October 2022, its monthly ad revenue in the U.S. fell at least 55 percent year-over-year, according to third-party data provided to Reuters in October.

Social media is also under scrutiny in Europe. The European Union announced earlier this month that it was investigating X for suspected breaches of obligations in part following Hamas attacks on Israel, its first investigation under the Digital Services Act (DSA).

After the October 7 attack by Hamas on Israel, X and other social media companies were flooded with fake images and misleading information.

X said it remains committed to complying with the DSA and is cooperating with the regulatory process.

The case is X Corp v Bonta, U.S. District Court, Eastern District of California, No. 2:23-cv-01939.