X Corp, Owned by Elon Musk, Files Lawsuit Against California to Challenge Content Moderation Legislation

(Reuters) – Elon Musk’s X Corp sued California on Friday over a state law that imposes new transparency rules on social media companies and requires them to publish their policies to combat disinformation, harassment, hate speech and extremism.

X, the social media platform once known as Twitter, said Assembly Bill 587 violates its free speech rights under the First Amendment to the U.S. Constitution and the California state constitution.

In the complaint, filed in federal court in Sacramento, California, X said the law’s “real purpose” was to pressure social media companies to remove content the state deemed inappropriate.

After buying Twitter for $44 billion last October, Musk, a self-described free-speech absolutist, fired many employees responsible for policing and regulating content and reinstated some accounts that had been banned by previous management.

The Anti-Defamation League and the Center for Countering Digital Hate have documented an increase in anti-Jewish, black, gay, and trans hate speech at X since Musk took over.

Musk, the world’s richest person, also runs electric car company Tesla and space exploration company SpaceX.

California Attorney General Rob Bonta’s office, which oversees state laws, said it would respond to the complaint in court.

AB 587 requires social media companies with gross revenues of $100 million or more annually to prepare semi-annual reports describing their content moderation practices and providing information on the number of negative posts and how they were handled.

The law also requires companies to provide copies of their terms of service. Failure to comply is subject to civil penalties of up to $15,000 per violation per day.

California’s Democratic governor, Gavin Newsom, signed the law last September, saying the state will not “weaponize” social media to spread hate and disinformation.

Musk laid off thousands of workers after buying Twitter, and on Monday blamed critics, including the ADL, for a 60 percent drop in U.S. ad revenue.

In a recent interview, A.J. Brown, who resigned as X’s director of brand safety and ad quality in June, said policy changes approved by Musk that limited the visibility of objectionable messages on X, rather than removing them, made it difficult to reassure advertisers that the platform was safe.