X Corp. lost a legal battle with California’s attorney general over state requirements to moderate social media content.

X was seeking to avoid compliance with a new state law taking effect January 1 that requires social media companies to disclose their moderation policies and submit semiannual reports.

What You Need To Know

  • A U.S. District Court judge in California has ruled against X in a lawsuit the social media company filed against the state's Attorney General

  • X was seeking to avoid compliance with a new state law taking effect January 1 that requires social media companies to disclose their content moderation policies and submit semiannual reports

  • AB 587 requires social media companies to dislcose how they define and moderate hate speech, racism, extremism, harassment and foreign political interference

  • X had argued the law was a violation of the First Amendment

On Thursday, the U.S. District Court judge in the case denied X, saying the new law’s requirements were not “unjustified or unduly burdensome.”

X Corp. sued California Attorney General Rob Bonta in September following Gov. Gavin Newsom’s signing of AB 587, which requires social media companies to publish how they moderate content on their platforms and to submit semiannual reports to the state about how their policies define and moderate hate speech, racism, extremism, radicalization, disinformation, misinformation, harassment and foreign political interference.

In its complaint, X contended the law “is to pressure social media companies to eliminate certain constitutionally protected content viewed by the state as problematic.”

It also alleged the law violated the First Amendment right to free speech, which, X said, prohibited interference with a publisher’s editorial judgment.

U.S. District Court Judge William Shubb rejected both arguments, saying “the compelled disclosures are reasonably related to a substantial government interest in requiring social media companies to be transparent … so that consumers can make informed decisions about where the consume and disseminate news and information.”

The ruling marks another setback for X as it works to regain users and advertisers, many of whom have fled the platform since Elon Musk bought it last year. X has lost about 13% of its users since October 22, according to the mobile research firm, Apptopia. In November, dozens of A-list advertisers, including Apple and Disney, following Musk's endorsement of an antisemitic conspiracy theory.

On its website, X states its "purpose is to serve the public conversation. Violence, harassment and other similar types of behavior discourage people from expressing themselves, and ultimately diminish the value of global public conversation. Our rules are to ensure all people can participate in the public conversation freely and safely."

Shubb said California's new social media disclosure requirements were not “unduly burdensome” because they only require X to identify its existing policies about content moderation.

“The required disclosures are also uncontroversial,” Shubb wrote in his ruling. “The mere fact that the report may be tied in some way to a controversial issue does not make the reports themselves controversial.”