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California is leading the way in monitoring and potentially regulating the spread of misinformation and disinformation via social media. In September, Gov. Gavin Newsom signed the Social Media Accountability and Transparency Act into law to bring transparency and accountability to the nation’s largest social media platforms, which are used by tens of millions of Americans.
The legislation is designed to improve the state’s understanding of social media content moderation, such as hate speech, misinformation and outside political interference. As a result, technology firms face new reporting requirements, increased costs and the risk of breaches. Here’s what they should keep in mind, especially if other states pass similar legislation.
Requirements for the Act
The law targets the largest social media sites — those that generate more than $100 million in gross annual revenue — including the most popular and visited platforms. It requires companies to publish terms of service containing a specific set of information for each platform they own or operate, and to submit a terms of service report to the California attorney general twice a year.
Terms of service. A social media company’s terms of service must now clearly disclose the type and nature of behavior permitted on the platform and describe how users can flag infringing activities. The terms of service should also explain what potential actions the platform may take against users or content.
Although terms of service have become standard practice, no state or federal law has yet required them. Contrary to the historic purpose of such terms — to preserve a company’s rights and remedies — the law requires social media companies to publicly state whether and how they will take responsibility for content on their platforms.
Reporting requirements. Starting January 1, 2024, social media companies must submit reports to the California attorney general twice a year that include the company’s terms of service, how the company defines hate speech, extremism, harassment, misinformation and outside political interference, and how the company responds to violations of the terms. provision of services, how automated moderation systems are used to ensure compliance with the terms of service, and when staff review is involved in enforcement.
Social media companies must also provide statistics, including the total number of flagged posts, how many users viewed the flagged posts before they took action, and the number of appeals and reversals. Finally, companies should break down statistics by category, including content types, media type, how the content was flagged, and how the content was acted upon.
The law does not explain how the attorney general will use the reports or what social media companies must do with the information. Rather, California’s initial goal is to collect data and educate, but we can expect the data to be used to further regulate how social media companies manage information in the future.
Impact on companies
The law will increase the cost of doing business for social media companies, which will need to implement data collection and reporting processes. Companies must also establish “response and resolution time commitments” and then meet them quickly enough to minimize the potential spread and impact of flagged content, and develop automated processes to quarantine flagged content until a human or individual automated process will be able to view the content. .
Any changes in processes must be accurately reflected in the terms of service, which will lead to the allocation of resources to ensure compliance of internal policies with legal requirements and commitments made in the terms of service.
Far-reaching influence
The law currently targets the largest and most influential social media companies, but we can expect the scope to expand over time. For example, the California Internet Privacy Act of 2003, the first law in the US to require websites to publish a privacy policy, quickly changed with the passage of the LIGHT Act the following year. Shine the Light gives Californians the right to know the type of personal information companies have collected and with whom they share that information.
Both laws paved the way for the California Consumer Privacy Act, which expanded the privacy rights of California consumers. Then, within months of the CCPA’s effective date, Californians voted to amend the CCPA, resulting in the California Privacy Bill of Rights Act of 2020, which takes effect on January 1, 2023. This new law will likely be expanded over time to limit misinformation and increase transparency for social media companies.
Enforcement
Historically, social media companies have been left to their own devices to deal with harmful content. But now California’s attorney general and city attorneys (for cities over 750,000 people) can force companies to at least disclose how they plan to manage content moderation. Violations can result in fines of up to $15,000 per day for failure to comply with the terms of service, timely filing of a report with the California Attorney General, and for materially misrepresenting (or omitting) information required in a report.
No one can predict the consequences of this act for the spread of misinformation, the spread of hate speech and the rise of online harassment. But social media companies still have to prepare for its January 2024 effective date. With so few targets, California’s attorney general is surely keeping an eye on it and is ready to act, threatening non-compliant social media companies with tens of thousands of dollars a day in fines.
This article does not necessarily reflect the views of Bloomberg Industry Group, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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Information about the author
Jake Bernstein is a partner at K&L Gates and a member of the Technology Transactions and Sourcing and Data Protection, Privacy and Security practice groups. He is a Certified Information Systems Security Professional, licensed (ISC)2.
Andrea Bland is an advisor to K&L Gates and a member of the Technology Transactions and Sourcing practice group.
Whitney McCollum is a partner at K&L Gates and a member of the Technology Transactions and Sourcing practice group. It draws on its global proprietary experience to provide companies with the most up-to-date data and advice on technology risk management.
associated Eric Vicente Flores contributed to this article.
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