(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)
The American Economic Liberties Project, a progressive anti-monopoly organization launched in 2020, released a brief on February 3 blaming social media for the January 6 attack on the U.S. Capitol and outlining three policy proposals for addressing political speech online. The proposals—banning targeted advertising, repealing Section 230 of the Communications Decency Act, and imposing common carriage rules on big tech firms—would do nothing to resolve the tensions over online political speech but would be disastrous for consumers and business of all sizes.
First, Economic Liberties argues that social media sites intentionally hook users on extremist content because it keeps them engaged on their sites. This content is not, Economic Liberties claims, an “unfortunate byproduct” of gathering millions or billions of users on the same platform and letting them all share their opinions; it is a deliberate move by these platforms to grab users’ attention so they stay on the platform longer and interact with more content, giving the platform more data on them that the platform can use to sell more targeted ads and make more money. Meanwhile, Economic Liberties portrays the individuals who attacked the Capitol as the victims—“addicted users” who broke into and defaced a government building because social media sites served them extremist content that led them to genuinely believe conspiracy theories about the 2020 election.
This interpretation of social media platforms as malicious agents of chaos, and their users as helpless victims, ignores the fact that the vast majority of users—both consumers and businesses—use these platforms for legitimate purposes, from connecting with friends, family, and colleagues to finding communities that share their niche hobbies and interests to becoming more politically informed and organizing peaceful protests and movements.
Banning targeted advertising would negatively impact consumers because targeted advertising—which normally does not involve sharing personal information with advertisers—increases ad revenue, which in turn allows tech companies to offer ever-improving services like search engines and media platforms, not to mention countless mobile apps and websites, to users for free. Targeted advertising is also a much more effective and affordable way for small businesses to market their products and services instead of paying more for a broader marketing campaign that would capture many people who would not be interested. And finally, targeted advertising means consumers get served advertisements that are more likely to be useful or relevant to them. Banning targeted advertising is part of a broader campaign for some on the left to move on to non-commercial, non-profit, or even government-run Internet applications which they wrongly believe would be better for the masses.
Second, Economic Liberties calls for repealing Section 230 either entirely or for any companies “which use algorithms to monetize data.” Section 230 of the Communications Decency Act of 1996 protects online services and users from liability for third-party content. Targeted Section 230 reforms could minimize harms without harming innovation, but an outright repeal of the law would open online services to endless nuisance lawsuits. This would disincentivize innovation in business models that rely on third-party content and disproportionately burden smaller companies with fewer legal and content moderation resources. Online services that continued to rely on third-party content would have to go in one of two directions, neither of which would be good for free speech: either removing all controversial content that could open them up to litigation or not removing any content at all, no matter how dangerous or illegal, so they could argue in court that they are not responsible for the content.
Economic Liberties proposes an alternative to repeal: removing Section 230 protections from companies that use algorithms to serve users relevant content. But users derive immense value from features that rely on algorithms, including news feeds that sort stories according to what is most likely to interest users, dating apps that match users according to their answers to certain prompts and questions, e-commerce sites that suggest relevant products based on what a user has searched for or previously purchased, and social media platforms that allow users to explore or discover new content that is similar to content they have liked or interacted with in the past. For example, on some sites NBA fans are more likely to see NBA content than golf content. Economic Liberties’ proposal would downgrade online services—forcing them to display content in chronological order and force users to scroll through content that does not interest them, or enter various and sundry search terms in hope of finding content of interest.
Finally, Economic Liberties calls for imposing common carrier rules on large tech companies, such as Apple, Google, and Amazon, that operate “critical private infrastructure,” calling the removal of Parler from Amazon Web Services (AWS) and the Apple and Google app stores an “attack on American democracy” and arguing that these companies should not have the power to deny their services to individuals or groups for political reasons, even while progressive groups like Economic Liberties at the same time call on these platforms to take down speech they do not like.
Currently, these companies have a First Amendment right to refuse to host speech they disagree with. Common carrier rules, which have historically applied to phone companies, utilities, and some transportation, would require them to provide services to anyone on the same terms.
The argument for designating companies like Apple and Google as common carriers is that if both Apple and Google ban an app from their app stores, the majority of mobile users would no longer be able to easily access that app. But even with such a ban, users would have options, as they could access the app through a third-party Android app stores or using their mobile browsers. The case for designating AWS as a common carrier is much less convincing; there are several competing cloud hosting services, and many more web hosting services. And as Economic Liberties points out in its brief, common carrier rules would require large tech companies to provide services to websites and apps that provide forums for harmful content, like extremist messaging boards.
Moderating political speech is a thorny issue for online services and policymakers alike. If policymakers are dissatisfied with how online services moderate political speech on their platforms, they need to identify the specific problems, outline what they want to accomplish, and propose specific targeted solutions that would not infringe on online services’ First Amendment rights or create a worse online environment for their users. Using political speech concerns as a pretext to go after large Internet companies—the principal mission of Economic Liberties—is bad economic and social policy, and will only make life worse for Americans.