Moody v. NetChoice Settles Little on Platform Transparency

By: CDT's Becca Branum

Transparency is a cornerstone of many technology policy discussions, and understandably so. People rely on social media and similar platforms for nearly every aspect of modern life — to receive and share information relating to needed medical care, organize social movements, petition the government, make a living, and more. In doing so, however, users are subject to policy choices made by platforms regarding what information to host and prioritize, making transparency into these policies and their implementation paramount for engendering trust and fostering accountability when platforms deviate from their stated intentions or fail to meet their human rights obligations .?

Transparency mandates can take many forms, including transparency reporting, content moderation notification and appeal procedures, and mechanisms to ensure researcher access to data. The specifics of each kind of transparency differ, but all serve the goal of increasing trust and accountability in online spaces. At the same time, some forms of transparency may have significant First Amendment implications when imposed by a federal or state government.

In its last term, the Supreme Court had occasion to consider the constitutionality of platform transparency mandates in Moody v. NetChoice . The transparency provisions of the Texas and Florida laws at issue received less attention than their content moderation provisions, but the laws’ transparency mandates are important nonetheless, and may become more important as policymakers search for constitutionally justifiable ways to create accountability for online platforms. While the Court only granted review to consider a certain subset of the laws’ transparency mandates, and its decision failed to fully address the implications of even that subset, the ruling nevertheless provides important fodder for understanding how governments may, and may not, appropriately impose transparency requirements.

In Moody, the Court was unanimous in its judgment that the cases be remanded for further consideration, and a majority of justices stated clearly that the First Amendment protects the curation and compilation of speech, whether online or off. This result, consistent with arguments from CDT and others, constitutes a victory for free expression and users who rely on platforms to moderate content to make online spaces safer and more useful. Beyond that, however, the Court communicated only through nonbinding dicta about the transparency requirements at issue in the case. While “[d]ictum settles nothing ,” it can nevertheless provide insight about the Court’s developing views of the First Amendment limitations on transparency mandates. These insights can help assess the viability of policy proposals intended to make the places where people share and receive critical information more transparent, accountable, and responsive to users and democratic values.

Commercial Speech and and Transparency Mandates

In Moody, the Court granted certiorari to consider requirements of Texas and Florida laws that compelled speech by platforms — namely, that they provide individualized content moderation explanations to users. Texas’ law, H.B.20 , requires platforms to notify users when, and why, their content is removed, and provide an opportunity to appeal the removal decision. Florida’s S.B.7072 includes a similar provision, prohibiting censoring, deplatforming, or shadowbanning users without providing a notification and explanation to the user who posted or attempted to post a given piece of content. While the Supreme Court did not grant review of their constitutionality, both laws also require broader, platform-wide transparency reporting regarding platforms’ content moderation decisions and policies.

Compelled speech that requires a person or entity to “speak a particular message,” like the transparency provisions in the Texas and Florida laws, is generally understood to be a content-based regulation of speech that triggers strict scrutiny review, requiring that such laws be narrowly tailored and the least restrictive means to achieve a compelling government interest. The Court, however, has usually applied the less burdensome standard of intermediate scrutiny to compelled commercial speech — specifically where the speech merely proposes a commercial transaction or relates solely to the speaker’s or consumer’s commercial interests.?

The standard test for commercial speech restrictions and compulsions is housed in the Court’s 1980 ruling in Central Hudson Gas & Electric Corporation v. Public Service Commission of New York . Regulations evaluated under this standard may only survive if the government’s interest is “substantial,” the regulation directly advances that substantial interest, and the restriction or compulsion is no more extensive than necessary to advance that interest. The Court has applied an even less rigorous standard to certain commercial disclosure mandates. In Zauderer v. Office of Disciplinary Counsel , the Court held in a case considering attorney advertising that the government may compel “factual and uncontroversial information about the terms under which . . . services will be available” in a manner that is not unduly burdensome. Although conceived and traditionally applied in the context of advertising, Zauderer’s test has broadened over time in some circuits to cases considering factual health, safety, and other consumer disclosures, causing the exact contours of the ruling’s reach to become elusive .

Despite the ambiguity regarding Zauderer’s scope, both the Fifth and Eleventh Circuits used the Zauderer standard to analyze Texas’ and Florida’s respective disclosure requirements. In doing so, the Eleventh Circuit acknowledged it was stretching Zauderer’s applicability, noting that “[a]lthough this standard is typically applied in the context of advertising and to the government’s interest in preventing consumer deception, we think it is broad enough to cover S.B.7072’s disclosure requirements—which, as the State contends, provide users with helpful information that prevents them from being misled about platforms’ policies.” Applying that standard, the Eleventh Circuit held that the Florida law’s general transparency requirements were likely constitutional because they related to the state’s likely legitimate interest in informing users about the terms of a commercial transaction, and that requiring platforms to do so was not unduly burdensome or likely to chill platforms’ speech. The court concluded that the law’s individualized notice requirements could not survive the Zauderer standard in service of that interest, however, due to the enormity of the obligation and its burden on platforms’ editorial rights. To require platforms to provide individualized notices for millions or billions of content moderation decisions would be a significant burden, and that burden — and its accompanying liability — would chill platforms’ First Amendment-protected editorial rights, in the Eleventh Circuit’s view.?

Applying Zauderer, the Fifth Circuit reached the same conclusion with regard to Texas’ general transparency reporting requirements, but the opposite conclusion with regard to its individualized explanation mandate. The court held that both sets of requirements related to “purely factual and uncontroversial information” about platforms’ services in service of the state’s interest in “enab[ling] users to make an informed choice” about the use of a given platform. Having found those prongs of Zauderer to have been satisfied, the court dedicated the bulk of its analysis to the burden of the mandated disclosures. The court rejected NetChoice’s assertions that the general transparency mandates would be unduly burdensome, and declined to prevent enforcement of the individualized notice provisions. In declining to do so, the court contended that platforms “already largely comply” with the law’s mandate and rejected the claim that platforms engage in editorial decision-making in a way that would entitle them to heightened First Amendment protections.

Zauderer, Moody, and Transparency

Having agreed to consider Texas and Florida’s individualized explanation mandates, the Supreme Court had an opportunity to clarify the scope of Zauderer and weigh the First Amendment’s demands against consumers’ need for information. Ultimately, it demurred and asked the Fifth and Eleventh Circuits to further consider the individualized explanation requirements. It did so, however, with ambiguous reference to whether and how the law’s individualized explanation requirements should be considered under Zauderer. Far from affirmatively stating that Zauderer is the most appropriate test to apply to the disclosure mandates, the majority instead cited that precedent indirectly and affirmed that any compelled disclosure must not unduly burden speech — a requirement of all First Amendment tests. Indeed, Justices Thomas, Gorsuch, and Alito’s concurrences made clear that, insofar as they were concerned, the remand to reconsider the transparency mandates under Zauderer was due to forfeiture of the issue and the case’s procedural posture, not necessarily that Zauderer’s application to such disclosures is settled law.

The ruling, therefore, leaves for another day a full examination of whether and how Zauderer appropriately applies to transparency requirements. Nevertheless, the majority opinion did include revealing statements regarding transparency in its Moody ruling, albeit confined to a single footnote providing context to the Court’s decision to emphasize the laws’ content moderation provisions:

“Although the discussion below focuses on Texas’s content-moderation provisions, it also bears on how the lower courts should address the individualized-explanation provisions in the upcoming facial inquiry. As noted, requirements of that kind violate the First Amendment if they unduly burden expressive activity. See Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U. S. 626, 651 (1985); supra, at 11. So our explanation of why Facebook and YouTube are engaged in expression when they make content-moderation choices in their main feeds should inform the courts’ further consideration of that issue.”?

It’s dangerous to put too much stock in a single footnote, but is nevertheless intriguing that the Court directed the circuits to analyze the individualized explanation requirements in light of the expression inherent to the act of moderating content.?

One question is whether the Court’s citation to Zauderer is meant to endorse that case as providing the most appropriate standard for evaluating certain transparency mandates, or simply as an example of evaluating burden on expressive activity, whatever the underlying test. The applicability of the Zauderer standard to the Florida and Texas transparency requirements is not entirely clear for two reasons.?

First, it is not obvious that all the user notification mandates at issue in either the Texas or Florida laws are, in fact, commercial speech — i.e., speech proposing a commercial transaction or relating to the speaker’s or consumer’s commercial interests. Users may not have a commercial interest in any given post to social media, such that an individualized notification requirement could be appropriately understood as relating to a commercial transaction or interest. Although some platforms may permit users to pay to promote certain content, that transaction would not necessarily render mandated transparency regarding that post “commercial speech.”? Other transparency mandates — such as requiring the posting of a platform’s terms of service so that consumers can make informed decisions regarding participation in a given platform — may be more similar to “commercial speech” as the Court has previously defined it, making the Zauderer or Central Hudson standard a more natural fit.?

Second, even if the individualized explanation requirements at issue are best understood as commercial speech, it is not clear that they would require the disclosure of factual and uncontroversial information and thereby fit Zauderer’s bill. The substance of content moderation policies, let alone their application, often is controversial and represents nuanced editorial decision-making by platforms — the exact kind of editorial discretion that the Court said in its Moody decision is afforded robust First Amendment protection. The Court’s remand to the Fifth and Eleventh Circuits, with its carefully ambiguous reference to Zauderer, likely does not settle whether the mandates are in fact appropriately analyzed under that standard, in light of the precedent’s ambiguous boundaries.?

A further question is how to analyze the burden that transparency mandates may place on expressive activity, which, as the Court’s decision makes clear, includes the exercise of editorial discretion in the creation and application of content moderation standards. Depending on the construction of a transparency mandate, requirements can burden certain kinds of speech or incentivize user gamification of content moderation standards. Moreover, courts will need to consider what Daphne Keller has termed “speech about speech” — or, compelled speech about underlying expressive activity. Where a typical product disclosure (e.g., about tobacco products or caloric content) relates to an item or transaction, disclosures about content moderation itself implicate and may burden the underlying expressive activity of curating and compiling speech.?

Although such burdens to speech could certainly be evaluated under Zauderer’s “undue burden” prong, it is not clear, from the Court’s own precedent or as a normative matter, that Zauderer is the most appropriate rubric by which to evaluate compelled speech that may burden speech itself. Where the Supreme Court has considered “speech about speech” previously, in the context of compelled discovery about a newspaper’s editorial process, the Court signaled that laws that subject the editorial process to public or private scrutiny “merely to satisfy curiosity ” could not meet the requirements of the First Amendment. Moreover, the Court has previously suggested that, even where expression may be appropriately understood as commercial speech entitled to a lower level of First Amendment protection, commercial speech “does not retain its commercial character when it is inextricably intertwined with the otherwise fully protected speech.” Certain transparency mandates may be appropriately understood as applying to commercial speech, but to the extent that they are “inextricably intertwined” with other speech rights — such as the editorial rights that apply to content moderation activities — a higher level of First Amendment scrutiny may be more appropriate. Because the Court directed the Fifth and Eleventh Circuits in Moody to consider those expressive rights as they evaluate the laws’ explanation mandates, lower courts may have to contend with First Amendment precedent outside the lineage of cases on commercial speech.

All told, the Court’s ruling makes clear that there is much work to do to understand the intricacies of how the First Amendment protects social media platforms and their users, though the Court did not leave policymakers and lower courts adrift. Moody v. NetChoice settles that content moderation should be understood as an expressive editorial activity afforded stringent First Amendment protection. It follows, then, that transparency mandates directed at — and potentially burdening — that expressive activity should be evaluated with effects on that underlying expression in mind. That certain types of transparency may have unintended consequences, or inappropriately burden speech, does not mean that transparency mandates are necessarily unconstitutional. Rather, policymakers would be well-advised to carefully write transparency legislation to avoid unintended consequences and inappropriate burdens on free expression. By sending the NetChoice cases back to the Fifth and Eleventh Circuits, additional litigation may bring forth more detail and analysis regarding the First Amendment limitations of transparency mandates.

Platform transparency can empower users and help hold companies accountable , and CDT has long argued that it is desirable as a best practice. Even so, transparency mandates in the United States must comply with the Constitution — for good reason. Unduly burdening the editorial process through certain forms of transparency requirements can carry similar risks of censorship and suppression as direct speech prohibitions, with the difference being one of degree, and lawmakers should take care to minimize this concern. Moody v. NetChoice does not settle how courts should examine transparency obligations for content moderation by platforms, but may provide clues for what lies ahead and how policy can both advance users’ interests and meet the obligations of the First Amendment.