Elon Musk’s X Corp sued California on Friday (8 Sept) to reverse the state’s new transparency rules for social media companies which requires them to expose hate speech and disinformation by disclosing how they moderate content.

X, formerly Twitter, claims that the new law, Assembly Bill 587, infringes upon free speech under the Constitution. In a lawsuit filed in federal court in Sacramento, X said:

“[the new rules have] the purpose and intended chilling effect of pressuring social media companies into limiting or censoring constitutionally-protected content that the State finds objectionable”

AB 587 applies to social media companies earning over $100m in annual revenue. It requires these tech giants to conduct semiannual reports disclosing their moderation practices, report data on the number of infringing posts and state how they were addressed.

AB 587’s lead author, Assembly Member Jesse Gabriel said the law was “important first step in protecting our democracy from the dangerously divisive content that has become all too common on social media.”

Following his purchase of Twitter for $44bn last year, self-avowed free speech absolutist, Musk, fired the company’s team of content moderators and allowed previously banned users back to the platform.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

In December 2022, two months after Musk’s takeover, the Center for Countering Digital Hate recorded 3,876 daily tweets mentioning the racist n-word, up 202% on the average daily rate in 2022 before his takeover of 1,282.

In July 2023, Musk sued the nonprofit for making “baseless claims that appear calculated to harm Twitter generally, and its digital advertising business specifically.”

Earlier this month, Musk took aim at the Anti-Defamation League, accusing the organisation of leading a campaign to dampen its advertising revenue.

Data provided by research firm GlobalData shows that regulation concerns remain at the forefront of technology, media and telecom companies.

Big tech has been beset by a series of new global regulations demanding transparency over their content moderation processes. In August, the EU Commission introduced the Digital Services Act (DSA) aimed at curtailing common problems, such as disinformation and monopolistic policies, before they occur – rather than penalising infringements after the fact.

GlobalData analyst Laura Petrone said: “We believe that data privacy, antitrust, AI ethics, and online harm will be the main targets of regulators’ investigations in the near term as these are the most critical areas to ensure a safe and efficient digital economy.”

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.