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Below: The FTC refocuses its Amazon probe, and critics say a new crypto coin highlights regulators' inability to act quickly. First up:
But with justices declining to weigh in on the merits of the case and the legal battle over it raging on in lower courts, experts say it’s becoming increasingly likely that a Texas-style social media law will be taken up by the Supreme Court down the line.
The court voted 5 to 4 to put a hold on the law, with Justices Samuel A. Alito Jr., Clarence Thomas and Neil M. Gorsuch writing in a dissenting opinion that they would have allowed the law to go into effect, and that Justice Elena Kagan would have left a lower court decision stand, as my colleagues Robert Barnes and Cat Zakrzewski reported.
The law, which seeks to prohibit social media companies from removing users’ posts based on their political viewpoints, had been allowed to go into effect after a divided panel of the U.S. Court of Appeals for the 5th Circuit lifted an earlier injunction blocking it. Two groups representing a coalition of tech companies last month filed an emergency petition calling for the Supreme Court to intervene, which a majority of the justices granted Tuesday.
The case is widely viewed as a major litmus test of how First Amendment protections extend in the Internet age to social media platforms like Facebook, YouTube and Twitter.
In his opinion, Alito appeared to acknowledge what court-watchers and tech legal experts have long said that those questions are now bound for a collision before the court.
“This application concerns issues of great importance that will plainly merit this Court’s review,” Alito wrote.
Samir Jain, director of policy for the nonprofit Center for Democracy and Technology, said Tuesday’s decision on the emergency petition makes that outcome more likely, though it’s unclear whether it will be the Texas law or a similar GOP-led social media law in Florida that will trigger a review.
“I do think it’s highly likely that this case and or the case challenging the Florida social media law are going to go to the court on the merits,” said Jain, whose group filed a brief against the Texas law and has funding money from tech companies including Facebook, Twitter and Google.
He added, “It seems quite likely at this point we’ll have a circuit split anyway between the 5th Circuit and the 11th Circuit, which is a usual indicator for the court taking the case.”
While the Supreme Court sided with the tech industry in blocking the law for now, legal experts said it’s unclear whether the decision can give companies much peace of mind, given that the majority didn’t spell out its reasoning.
“They could have done so for a number of reasons,” Jain said. “It could be because of their views on the merits. It could be because they thought it made sense to preserve the status quo until they can decide the case.”
Legal experts also said Alito’s opinion, while in the minority, offered hints that multiple justices may see Texas’s arguments for upholding the law favorably.
“I think the dissenting opinions suggest that those three justices may in the end vote to uphold the Texas law or a similar state law,” Scott Wilkens, senior staff attorney with the Knight First Amendment Institute at Columbia University, said of Alito, Thomas and Gorsuch.
Wilkens, whose group has challenged the Texas law as unconstitutional, called the fact that several justices would have allowed it to go into effect “very concerning.”
Alito also argued that “it is not at all obvious how our existing precedents, which predate the age of the Internet, should apply to large social media companies.” Jain, whose group has argued there’s precedent to suggest key aspects of the law are unconstitutional, said that the remarks “suggest at least some potential sympathy with Texas’s arguments here.”
Regardless of justices’ initial inclinations on the case, Wilkens said he thinks the court will agree with Alito that it’s an issue too big to pass up more broadly.
“I think the court will see it that way, given the role that social media platforms play in public discourse,” he said.
Our top tabs
The FTC revamps its Amazon antitrust investigation
The Federal Trade Commission has zeroed in on Amazon’s cloud-computing business and $8.45 billion acquisition of movie studio MGM, Bloomberg News’s Leah Nylen reports. FTC Deputy Director of Competition John Newman has also shaken up the team looking at Amazon since he joined the agency in December.
FTC Chair Lina Khan has notably “helped draft some lines of questioning for investigators,” Leah writes. Amazon has tried to bar Khan from overseeing antitrust matters involving the company, arguing that her past criticisms of the company prevent her from overseeing such matters with “an open mind.” In her confirmation hearing, Khan told Sen. Mike Lee (R-Utah) that she would approach issues “with an eye to the underlying facts and the empirics and really be following the evidence,” and would consult with agency ethics officials about requests for her recusal.
Amazon didn’t respond to Bloomberg News’s request for comment. The FTC declined to comment to the outlet.
(Amazon founder Jeff Bezos owns The Washington Post.)
The team behind two failed cryptocurrencies has a new coin, infuriating critics
Terraform Labs started trading Luna 2.0 on Saturday, Pranshu Verma reports. The start-up was behind TerraUSD and sister cryptocurrency Luna, which crashed three weeks ago and wiped out most of its investors. That episode refocused the attention of Washington lawmakers.
Some investors who lost money in Terraform Labs's previous coins will be able to get some tokens free. But Luna 2.0 has had a rocky beginning, plummeting nearly 75 percent before it subsequently regained some of its value. As of Tuesday evening, it was trading at roughly half its starting price.
The episode highlights the ineffectiveness of regulators, crypto critics say. “It’s the little guy who’s being sold false promises [and] who’s getting absolutely torn apart by this,” said Molly White, who runs the website Web3 Is Going Just Great. “It’s just an enormous failure on the part of regulators.” It’s not clear whether regulators will take broader action against Do Kwon, who founded Terraform Labs. The start-up didn’t respond to a request for comment.
Rant and rave
Some aspects of the Supreme Court's decision on the Texas social media law surprised tech experts and journalists. The Stanford Cyber Policy Center's Daphne Keller:
I probably don't really want to know.— Daphne Keller (@daphnehk) May 31, 2022
Appellate lawyer Raffi Melkonian:
Journalist Casey Newton and Google Cloud's Quentin Hardy:
It's as if the Founding Fathers never had a Tik Tok about assault rifles go viral.— Quentin Hardy (@qhardy) May 31, 2022
Inside the industry
- The R Street Institute hosts an event on the path forward for a federal privacy law Wednesday at noon.
- The Atlantic Council hosts an event on the upcoming election for secretary general of the International Telecommunications Union on Thursday at noon.
- The Atlantic Council’s Digital Forensic Research Lab hosts a two-day summit starting June 6.