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Content moderation under Musk won't trigger legal reform

While Musk is facing legal and business challenges since taking over Twitter, it's not likely that his content moderation policies will trigger any changes to federal laws.

Elon Musk is shaking up operations at social media giant Twitter. While he could face some legal and business challenges, it's unlikely that he will face backlash in Congress through regulatory reform that could open Twitter and other social media platforms to lawsuits over postings by their users.

On Friday, Twitter closed its offices as employee layoffs began, according to reporting by Reuters. The action followed Musk's firing of Twitter's CEO Parag Agrawal along with other top executives last week after the $44 billion deal closed. Musk's actions have created turmoil at the company as employees took to Twitter regarding recent layoffs.

"Looks like I'm unemployed y'all," wrote Simon Balmain, who had served as senior community manager at Twitter since November 2021, according to his LinkedIn profile. "Just got remotely logged out of my work laptop and removed from Slack. ... So sad it had to end this way."

A handful of employees sued Musk Thursday in San Francisco federal court, alleging they weren't provided enough notice before losing their jobs.

It's not the only legal or business problem facing Musk, but experts don't think those challenges will be enough to change laws governing social media platforms.

Content moderation

With Musk's takeover, Twitter's future content moderation polices are some of the most significant concerns for users and advertisers.

Musk tweeted on Oct. 28 that the company will be forming a content moderation council with "widely diverse viewpoints" and won't change Twitter's policies before the panel convenes. He also assured advertisers of his plans to build a respected advertising platform.

Yet that hasn't served to satisfy some advertisers, as companies like General Mills, Audi, Pfizer and Volkswagen this week paused advertising on the platform, according to reports.

Since the 2016 U.S. election and proliferation of misinformation on social media platforms, followed by the COVID-19 pandemic and continued spread of medical misinformation, policymakers have debated reforming Section 230 of the Communications Decency Act, which protects companies from liability for content posted on their platforms.

However, Musk's takeover of Twitter likely won't serve as the catalyst for actual Section 230 reform, said Kristian Stout, director of innovation policy at the International Center for Law and Economics.

It's really difficult to come up with an alternative to Section 230 that wouldn't create huge problems for the platforms.
Gautam HansAssociate clinical professor of law, Cornell Law School

Section 230 "has on the whole provided the legal framework that is necessary for user-generated content to exist," Stout said.

Content moderation is a challenging task from a technical perspective. Algorithms can identify words or phrases that violate guidelines, but often not the context around the word or phrase. These content moderation challenges are part of the reason Section 230 broadly gives immunity to platforms, said Gautam Hans, associate clinical professor of law at Cornell Law School.

"It's really difficult to come up with an alternative to Section 230 that wouldn't create huge problems for the platforms," Hans said.

Though there is debate around Section 230 reform, Harold Furchtgott-Roth, senior fellow at the Hudson Institute, a conservative think tank, doesn't expect policymakers to agree on Section 230 reform anytime soon. The "federal government is pretty divided on how they want Section 230 to be interpreted," he said.

Instead, he noted that the most immediate effect on content moderation polices could come from states, particularly the new state law in Texas upheld by the U.S. Court of Appeals for the Fifth Circuit. The law bans social media platforms from removing content based on users' political beliefs and will likely end up in the Supreme Court.

"That's a serious legal challenge all the social media platforms could face," Furchtgott-Roth said.

Twitter acquisition could fall under SEC scrutiny

The process by which Musk acquired Twitter could trigger an investigation by the U.S. Securities and Exchange Commission (SEC), Furchtgott-Roth said.

Furchtgott-Roth said there were some issues about disclosure when Musk acquired the threshold 10% to purchase the company. Musk ended up selling shares of his company Tesla as part of his efforts to acquire Twitter.

The SEC was already paying attention to the deal, particularly after Musk threatened to pull out over spam accounts earlier this year.

"There may be some securities law issues that Twitter faces," Furchtgott-Roth said.

Charging users

Musk has also announced plans to charge Twitter users $8 per month to become verified users and receive the blue check on their accounts.

Platforms interested in better content moderation need to figure out ways to discourage spam accounts and user accounts that remain anonymous to the platform operators, which Stout argues would make those users accountable for the content they share on the platform.

"Paying a little bit, even $1, to get on these platforms I believe will have an interesting and positive effect for the ecosystem of discussion on its own," Stout said.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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