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Takeaways from the Supreme Court’s arguments on Texas and Florida’s social media laws and the First Amendment – CNN

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7 months ago

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CNN
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The Supreme Court expressed skepticism Monday about state laws in Texas and Florida designed to stop social media giants from throttling conservative views but also suggested that whatever decision emerges may not be the court’s final word on the significant First Amendment questions raised by the case.

During nearly four hours of oral arguments, the justices appeared divided along non-ideological lines as they wrestled with whether social media companies like Meta and X have have created a “public square” that sets them apart from other private entities.

The justices struggled with sweeping First Amendment questions about whether social media platforms should be treated like “common carriers,” such as telephone companies, that are required to transmit content across their networks regardless of viewpoint or whether they act more like newspaper publishers that can choose which articles to place on the front page.

Despite the high stakes involved and the potential to radically change how millions of Americans get their news and information on the popular sites, several of the justices appeared to be angling for a potential outcome that would keep the laws on hold temporarily and allow lower courts to further review the impact on a wide range of internet sites.

The Texas and Florida laws prohibit online platforms from removing or demoting user content that expresses certain viewpoints — legislation that came in response to accusations from former President Donald Trump and other conservatives that the platforms were hindering conservative perspectives.

Here are the key takeaways from the courtroom:

Online platforms engage in censorship when they silence certain users’ speech, the states argued to the court.

But multiple justices challenged that claim, pointing out that the First Amendment only prevents governments from restricting speech, not private businesses. In fact, the tech industry argued, government requirements that social media not moderate content would violate the platforms’ own First Amendment freedoms from government meddling.

Without the power to dump users or posts, the industry argued, social media sites might be forced to give greater airtime to misinformation and hate speech — and their own expressions against those ills would be silenced.

Those arguments appeared to divide at least some of the court’s conservatives. Justice Samuel Alito pressed the lawyer representing the Biden administration on why, when a social media company takes down a post, that shouldn’t be described as “censorship” rather than “content moderation.” Alito said he worried about “the Orwellian temptation to recategorize offensive conduct in seemingly bland terms.”

Justice Brett Kavanaugh, a fellow conservative whose questions seemed to indicate support for the tech companies, responded by noting that the First Amendment’s prohibition on barring speech only applies to government action.

“When I think of ‘Orwellian,’ I think of the state – not the private sector, not private individuals,” Kavanaugh said. “Maybe people have different conceptions of ‘Orwellian.’”

At one point, Justice Elena Kagan noted that the tone and range of content shifted on X after Elon Musk bought the company in October 2022.

“A lot of Twitter users thought that was great. And a lot of Twitter users thought that was horrible,” Kagan said.

Her point was that the change in tone was a reflection of a change in the company’s own speech, and that such speech is protected from government intrusion by the First Amendment.

Uber? Venmo? Which platforms are in play?

One of the central features of the arguments – particularly in the Florida case – was a debate over which internet sites are covered by the laws. Given the nature of the litigation and the speed with which it arrived at the Supreme Court – that’s not entirely clear.

The justices struggled with how the state laws might be applied to a long list of sites, including popular social media apps Facebook, Instagram, TikTok and YouTube, but also smaller ones like LinkedIn and even sites that are not considered social media, such as Etsy, Uber, Venmo and Google search and Amazon’s cloud computing business.

Even if a majority of the justices agree that social media companies are engaging in First Amendment protected activity when they remove certain users or take down posts, there were many questions about whether the law also applies to sites like Uber or Venmo that perform no similar moderation.

Kagan, a member of the court’s liberal wing, asked why a state couldn’t bar Uber from declining to pick up riders based on political views, for instance.

“When you’re running Venmo you’re not engaged in speech activities and so when a state says to you, “You know what, you have to serve everybody irrespective of whether you like their political opinions or not,’ then it seems you have a much less good argument,” Kagan told the attorney representing the tech industry. “This statute also says that, doesn’t it?”

That view, echoed by both conservative and liberal justices, suggested a reluctance to toss out the laws entirely. It also suggested that some are thinking about sending the litigation back down to lower courts for further review on those points. In that case, the court would likely keep the laws on hold temporarily.

Section 230 features prominently in arguments

One question kept coming up during the arguments, just as it has in lower courts: What these state laws could mean for Americans’ overall ability to sue social media companies over content moderation.

The state laws explicitly allow users to sue tech platforms for alleged censorship. But Section 230 of the Communications Decency Act, a 1996 federal law, shields tech platforms from exactly these types of lawsuits — raising questions about how the laws by Texas and Florida might interact with or be preempted by what has become a bipartisan punching bag.

Members of both political parties have railed on Section 230, but for different reasons. Conservatives argue the law lets platforms get away with censorship, while liberals say it gives social media companies a free pass to allow hate speech and other obscene content on their platforms.

If the court sides with the states in these cases, it could indirectly have broad and potentially unforeseen consequences for the scope of Section 230, said Justice Amy Coney Barrett.

“If what we say about this is that this is speech that’s entitled to First Amendment protection, I do think then that has Section 230 implications for another case,” she said. “And so it’s always tricky to write an opinion when you know there might be landmines that would affect things later.”

Effectively changing the breadth of Section 230 may, in other words, reshape the circumstances under which social media platforms could be sued more broadly.

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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3 weeks ago

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August 23, 2024

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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3 weeks ago

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August 23, 2024

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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Trump Media & Technology Group Faces Declining Stock Amid Financial Struggles and Increased Competition

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3 weeks ago

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August 20, 2024

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Tech News in Canada

Trump Media & Technology Group’s stock has taken a significant hit, dropping more than 11% this week following a disappointing earnings report and the return of former U.S. President Donald Trump to the rival social media platform X, formerly known as Twitter. This decline is part of a broader downward trend for the parent company of Truth Social, with the stock plummeting nearly 43% since mid-July. Despite the sharp decline, some investors remain unfazed, expressing continued optimism for the company’s financial future or standing by their investment as a show of political support for Trump.

One such investor, Todd Schlanger, an interior designer from West Palm Beach, explained his commitment to the stock, stating, “I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech.” Schlanger, who owns around 1,000 shares, is a regular user of Truth Social and is excited about the company’s future, particularly its plans to expand its streaming services. He believes Truth Social has the potential to be as strong as Facebook or X, despite the stock’s recent struggles.

However, Truth Social’s stock performance is deeply tied to Trump’s political influence and the company’s ability to generate sustainable revenue, which has proven challenging. An earnings report released last Friday showed the company lost over $16 million in the three-month period ending in June. Revenue dropped by 30%, down to approximately $836,000 compared to $1.2 million during the same period last year.

In response to the earnings report, Truth Social CEO Devin Nunes emphasized the company’s strong cash position, highlighting $344 million in cash reserves and no debt. He also reiterated the company’s commitment to free speech, stating, “From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing.”

Despite these assurances, investors reacted negatively to the quarterly report, leading to a steep drop in stock price. The situation was further complicated by Trump’s return to X, where he posted for the first time in a year. Trump’s exclusivity agreement with Trump Media & Technology Group mandates that he posts personal content first on Truth Social. However, he is allowed to make politically related posts on other social media platforms, which he did earlier this week, potentially drawing users away from Truth Social.

For investors like Teri Lynn Roberson, who purchased shares near the company’s peak after it went public in March, the decline in stock value has been disheartening. However, Roberson remains unbothered by the poor performance, saying her investment was more about supporting Trump than making money. “I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said, adding that she sees Trump’s return to X as a positive move that could expand his reach beyond Truth Social’s “echo chamber.”

The stock’s performance holds significant financial implications for Trump himself, as he owns a 65% stake in Trump Media & Technology Group. According to Fortune, this stake represents a substantial portion of his net worth, which could be vulnerable if the company continues to struggle financially.

Analysts have described Truth Social as a “meme stock,” similar to companies like GameStop and AMC that saw their stock prices driven by ideological investments rather than business fundamentals. Tyler Richey, an analyst at Sevens Report Research, noted that the stock has ebbed and flowed based on sentiment toward Trump. He pointed out that the recent decline coincided with the rise of U.S. Vice President Kamala Harris as the Democratic presidential nominee, which may have dampened perceptions of Trump’s 2024 election prospects.

Jay Ritter, a finance professor at the University of Florida, offered a grim long-term outlook for Truth Social, suggesting that the stock would likely remain volatile, but with an overall downward trend. “What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter said, highlighting the company’s struggle to produce a sustainable business model.

Still, for some investors, like Michael Rogers, a masonry company owner in North Carolina, their support for Trump Media & Technology Group is unwavering. Rogers, who owns over 10,000 shares, said he invested in the company both as a show of support for Trump and because of his belief in the company’s financial future. Despite concerns about the company’s revenue challenges, Rogers expressed confidence in the business, stating, “I’m in it for the long haul.”

Not all investors are as confident. Mitchell Standley, who made a significant return on his investment earlier this year by capitalizing on the hype surrounding Trump Media’s planned merger with Digital World Acquisition Corporation, has since moved on. “It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.” Now, Standley is staying away from the company, citing the lack of business fundamentals as the reason for his exit.

Truth Social’s future remains uncertain as it continues to struggle with financial losses and faces stiff competition from established social media platforms. While its user base and investor sentiment are bolstered by Trump’s political following, the company’s long-term viability will depend on its ability to create a sustainable revenue stream and maintain relevance in a crowded digital landscape.

As the company seeks to stabilize, the question remains whether its appeal to Trump’s supporters can translate into financial success or whether it will remain a volatile stock driven more by ideology than business fundamentals.

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