In 2023, California enacted a social media content moderation law commonly known as AB 587. The law has been codified at Cal. Bus. & Prof. Code § 22675 et seq. and has no specific statutory name. We will refer to the law as “AB 587” herein.

Shortly after enactment, the company formerly known as Twitter — now X Corp. — filed a lawsuit in California federal asking that AB 587 be held unconstitutional on First Amendment free speech grounds. X Corp v Bonta (U.S. District E.D. Cal. Dec. 28, 2023). X Corp. lost in the lower courts. See the news report here.

The first question addressed by the federal court was how to characterize the requirements of AB 587. AB 587 has two basic elements:

• Disclosure and posting to the California Attorney General’s Office a company’s current Terms of Services annually, along with posting the same twice a year and
• Mandated annual terms of service moderation reports

The federal court summarized what the annual terms of service moderation reports require as follows:

“The law also requires that such companies submit twice yearly “terms of service reports” to the Attorney General containing, inter alia, the current version of the terms of service for their platform, as well as a description of content moderation practices used by the social media company for that platform, including, but not limited to, how the company addresses (A) hate speech or racism; (B) extremism or radicalization; (C) disinformation or misinformation; (D) harassment; and (E) foreign political interference.”

With respect to these two categories, the court stated that its first task was to decide what type of speech is being impacted. Generally, free speech principles prohibit governments from interfering with the ability to speak but also prohibit forcing persons to speak. X Corp essentially argued that it was being forced to speak in violation of the First Amendment. Note further that free speech doctrines also distinguish commercial speech and what we might call “regular speech.” Commercial speech is generally entitled to less protection.

In resolving the question of X Corp being “forced” to speak, the court concluded that the speech in question was commercial in nature. From there, the court applied the more lenient court and legal precedents and held that the posting of terms of service requirement and the requirement of providing the terms of service moderation reports were constitutionally permissible under the First Amendment. X Corp is now appealing to the 9th Circuit Court of Appeals. At least according to one news report, the three-judge panel was more supportive of the arguments being made by X Corp.

In the meantime, the Supreme Court of the United States (“SCOTUS”) issued a decision related to similar statutes enacted in Florida and Texas. See NetChoice, LLC v. Moody. The Florida and Texas laws are different from California’s AB 587 in that those statutes sought to directly limit social media companies from censoring or using social media moderation based on the content of the social media posts. California’s AB 587 is more of a notice law. That is, AB 587 says, “show us your Terms of Service and tell us what you’ve done.” Thus, NetChoice may not have a direct bearing on the constitutionality of AB 587.

That being said, while SCOTUS did not rule on the validity of the Florida and Texas statutes, SCOTUS did express some views that may impact the case by X Corp. Among other things, SCOTUS noted that, when engaging in content moderation, social media platforms are, in fact, engaging in their own “expressive conduct” entitled to protection under free speech constitutional principles. The impact NetChoice will have on X Corp v Bonta has yet to be determined.

The First Amendment Framework for Compelled Speech

The constitutional tension at the heart of AB 587 and similar social media transparency laws is the government’s power to compel speech versus the First Amendment’s protection against compelled speech. The doctrine originates in Wooley v. Maynard, 430 U.S. 705 (1977), where the Supreme Court held that the government cannot compel an individual to display a message he finds objectionable on his license plate. Subsequent cases extended this principle to entities, including corporations.

The key question in evaluating compelled speech challenges to disclosure laws is whether the compelled disclosure relates to commercial activity, in which case it receives lesser constitutional scrutiny under the framework established in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985). Zauderer held that purely factual and uncontroversial disclosures in commercial advertising are permissible if they are reasonably related to the government’s interest in preventing consumer deception. AB 587’s requirement that platforms disclose their content moderation policies to the California AG is arguably a form of factual commercial disclosure, which is why the California district court upheld it as commercial speech subject to the less demanding Zauderer standard.

The NetChoice Decision and Its Implications for Platform Regulation

In NetChoice, LLC v. Paxton, 603 U.S. ___ (2024), the Supreme Court vacated the lower court judgments reviewing the Texas and Florida social media content moderation laws and remanded for further analysis. While SCOTUS did not strike down or uphold the laws, the majority opinion provided important guidance on how courts should evaluate platform content moderation under the First Amendment.

The Court held that editorial choices by social media platforms — including decisions about what content to display, amplify, or remove — are protected expressive activity under the First Amendment. A law that prohibits a platform from making certain editorial choices is a direct restriction on speech and must satisfy at least intermediate scrutiny. This reasoning directly challenges the Texas and Florida laws, which sought to prohibit platforms from removing certain categories of content or censoring particular viewpoints.

However, the Court was careful to note that not all platform activities are expressive. Purely mechanical hosting functions — like transmitting data between users without any curation or algorithmic processing — may not carry the same First Amendment protection as curated content feeds. This suggests a potential path for content-neutral regulation of platform infrastructure, even if regulation of content curation faces high constitutional hurdles.

State and Federal Social Media Legislation: The Broader Landscape

AB 587 is one of several state laws attempting to regulate social media content moderation through transparency and reporting requirements rather than direct content mandates. Similar laws have been enacted or are under consideration in several other states. At the federal level, proposed legislation like the Platform Accountability and Consumer Transparency Act (PACT Act) and the Social Media NUDGE Act would impose transparency requirements on large platforms at the national level.

For platforms subject to multiple state transparency requirements, compliance will require careful attention to the specific reporting obligations in each jurisdiction, the timing of disclosures, and the enforcement mechanisms available to regulators. Platforms that choose to publish uniform terms of service and content moderation reports nationwide — rather than tailoring disclosures to each state — may find that the California report serves as a template, given California’s size and the California AG’s active enforcement posture.

For businesses that advertise on social media platforms and whose ad content may be subject to content moderation, the transparency reporting requirements create an opportunity to understand how platforms enforce their policies. Advertisers whose content has been removed should be aware that the platform’s disclosed content moderation policies and annual reports may provide useful information for appeals.

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