You’ll be back

The Texas law that would hobble social media content moderation is off again after the Supreme Court reinstated a pause on the measure, but a clash over the First Amendment online could still go badly for the likes of Meta and Twitter — and soon.

To understand why, it helps to explain why every tech lawyer had their jaw locked for almost three weeks until yesterday:

• Back in May, NetChoice, a tech trade group, asked the high court to block the law, which would force social media platforms to carry all viewpoints or else face lawsuits.
• That move came right after a panel of federal appeals court judges with an apparently poor grasp of tech let the statute go into effect.
• The appeals court ruling had reversed a pause on the provision that a federal trial court imposed late last year over concerns that the state is unconstitutionally punishing private companies for their views.

The lag at the Supreme Court caused tech types to worry the justices were readying a U-turn on the Court’s long-held views of free speech and the internet — especially since the industry’s request came on the emergency docket that’s supposed to move fast enough to handle death-penalty appeals.

• “The delay isn't a good sign for the tech cos,” Jameel Jaffer, executive director of the Knight First Amendment Institute, which has previously opposed the must-carry provisions, tweeted last week.

Instead, the majority of the court, without explaining its reasoning, did reinstate an injunction on the law, pending a full appeal. But in the process, three conservatives — Justices Samuel Alito, Clarence Thomas and Neil Gorsuch — railed against the legal foundation for social media.

• Alito argued on behalf of the trio that social media is too new to know what to do about, vented about platforms’ benefitting from both Section 230 and the First Amendment, and flirted again with telecom-style must-carry rules that previously only Thomas had said he liked.
• Justice Elena Kagan, part of the Court’s liberal wing, also apparently would have let the law, which is aimed at punishing social media for alleged anti-conservative bias, proceed.
• Kagan dissenting confused pretty much everyone who was watching. Annoyingly, she neither joined her conservative colleagues’ reasoning nor issued any of her own, though her objection may have been due to the emergency “shadow docket” process itself.

But that delay may have been a bad sign for tech, as it signals a growing — or, at least, larger-than-we-knew — bloc of justices who don’t like the legal status quo for the internet.

• And those views aren’t merely academic: Court watchers basically assume the circuit court judges, despite getting overruled by SCOTUS on the issue of the stay, will find a way to approve Texas’ law in the full appeal of the district court’s injunction.
• If that happens, their decision will be in tension with a separate appeals court, which maintained a pause on most provisions of a similar Florida law.

When circuit courts split like that, the Supreme Court is much more likely to take up the issue to resolve it, meaning that the state laws themselves — and not just the back-and-forth over stays and injunctions — could be before the court in its next term.

• Alito himself hinted at this, writing that tech’s request “concerns issues of great importance that will plainly merit this Court’s review.”
• He also strongly suggested that the thinking he laid out on the First Amendment and other issues would ultimately mean he’d want to uphold the law when he and his colleagues next see it.

And Tuesday’s action doesn’t necessarily mean there will ultimately be five votes to strike down the laws as unconstitutional either.

• It’s possible at least some of the justices in this week’s majority — perhaps conservatives such as Amy Coney Barrett and Brett Kavanaugh — are actually sympathetic to Texas’ vision, but just thought now isn’t the right procedural moment to let the state’s law go forward.
• Plus, there are issues at play not just about the common carrier provisions under the First Amendment, but also around forced disclosures, Section 230 and who knows what else.
• “There will continue to be anxiety until we get a decision on the merits,” said Samir Jain, director of Policy for the Center for Democracy & Technology, a think tank that has opposed the law.

Jain said the controversy has the potential to serve as a “seminal moment” in tech policy. Even as they celebrate, companies might be wise to plan for an extended stay near the Supreme Court.

In Washington

A leaked draft of a bipartisan bill would give the crypto industry critical victories, including assigning the CFTC as the industry’s lead regulator and removing tax reporting requirements for node operators that are contained in the infrastructure bill. In a tweet, however, Sen. Cynthia Lummis, who is helping to write the measure, said the leaked text is “an incredibly outdated version” of the bill and the final would come out June 7.

The FTC has reconfigured the team working on its Amazon probe, leading to more efficient operations, Bloomberg reports. The agency reportedly shifted around its investigative team, re-interviewed key potential witnesses and dug into the MGM acquisition. Meanwhile, Amazon is upping its rhetoric against the antitrust measure that is making its way through the Senate.

A group of 26 high-profile technologists sent a letter to Congress urging lawmakers to ignore what they said was the false promise of blockchain. The group, which includes Harvard lecturer Bruce Schneier and Google cloud principal engineer Kelsey Hightower, urged Congress to “resist pressure from digital asset industry financiers, lobbyists and boosters to create a regulatory safe haven for these risky, flawed and unproven digital financial instruments.”

A MESSAGE FROM TRUSTED FUTURE

At the same time that the pandemic demonstrated all that is possible in an interconnected world, we saw in new and increasingly stark ways how certain communities continue to be marginalized and harmed by a persistent digital divide and how effectively that divide exacerbates our society’s other inequities.

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In the courts

A U.S. district judge ordered IBM to pay $1.6 billion in damages after the company swapped its in-house software for that of BMC Software while servicing AT&T, a mutual client. The two companies had an agreement that said IBM wouldn’t poach mutual clients. The judge said IBM had operated under the assumption that it could settle any disputes for “pennies on the dollar.”

The federal judiciary is ready to back free searches of court dockets for non-commercial uses, according to Reuters. Users would likely still pay to download documents. The fees are lucrative for the court system, but just trying to find a list of cases can be costly for journalists and students, getting in the way of transparency.

On Protocol

Google foots the bill to bring progressives of color together to discuss tech policy and hear from the company on its views. The program shows how eagerly Google cultivates friends and keeps its critics close, but that doesn’t mean it listens much to either.

Large institutions are providing collateralized loans for NFTs, raising concerns of broader financial market risk should the aggregate value of NFTs swiftly drop. Already some of the most prominent NFT projects have seen their prices fall by 50% in the past month.

Around the world

LGBTQ+ advocates in Ghana are calling on Google and Twitter to oppose a bill that would make it illegal to identify as such, or positively discuss their identities. The companies have established a crucial presence in Accra.

In Peru, Netflix has been testing out additional fees for password sharing. The company could look to export the practice around the world, but regulators are already taking notice. Peru’s consumer protections agency voiced their concerns with Netflix executives, and the agency later said the varying fee structure could be considered arbitrary price discrimination, per Rest of World.

In the media, culture, and metaverse

Marc Benioff received a letter from Salesforce staff asking that the company cut ties with the NRA in light of the Uvalde mass shooting. The letter said, “It is likely the NRA is already upping, or preparing to up, their Marketing Cloud usage in response to this tragedy.”

The founder of the failed luna alt-stablecoin launched a new version of luna, which already lost over half its value. The spectacular collapse of the original luna (now dubbed luna classic) kicked off calls for a crypto regulatory overhaul for the sake of protecting consumers.

In data

5.9%: That’s the magnitude of salary differential between senior software engineers in Tier 1 markets (New York and San Francisco) and other U.S. metros as of Q3 2021, according to data from compensation data provider Pave. The distributed work era seems to be narrowing that gap, which was 18.1% at the end of 2019.

A MESSAGE FROM TRUSTED FUTURE

There is so much more we need to do to make sure our future is more equitable and inclusive and maximizes America’s potential. It is not enough just to ensure everyone is connected. We also need to extend the full scope of digital opportunity to the people, the communities, and the institutions.

Learn more

Land, ho!(?)

Foxconn chairman Liu Young-Way told shareholders earlier this week, “We are quite confident in the stability of our supply chain for the second half of this year.” That comes as the government in Shanghai plans to let low-risk workers return to work after a brutal lockdown that spanned two months. Supply chains are a complete mess, but the reanimation in Shanghai and vote of confidence from Young-Way suggest it might be time to be cautiously optimistic.