Last week I participated in a Practicing Law Institute program on “legal and regulatory responses to technology.” I’ve adapted my brief opening remarks for one of the two panels I was on—on “market power and content regulation”—into this post. If you’re a lawyer in need of CLE credit, I recommend the online version of the full program, which features top-notch experts such as Anupam Chander, Daphne Keller, and Mike Masnick.
The fracturing of media is by now a widely noticed, if still little understood, phenomenon. You can say this for the Trump campaign: they understood what’s happening well enough to capitalize on it. Theo Von telling Donald Trump about how cocaine will make you into your own streetlamp is, perhaps, the timeline we deserve. Given its relative media savvy, there is a certain irony to how blind—perhaps willfully blind—the incoming administration is to the changing media reality. We are entering a new world, yet some of Trump’s key appointees are keen to reignite old media battles.
Incoming FCC chairman Brendan Carr has said that he wants to take a “fresh look” at whether broadcast stations are operating in the “public interest,” as required by federal law. The idea here is that, if NBC and CBS take too liberal a bent in their programming, the FCC will seek to strip those networks’ local affiliates of their broadcast licenses.
There are many problems here, but, in keeping with the theme of our panel, let’s focus on this plan’s defiance of market realities. The “public interest” requirement stands on the notion that broadcast stations are using scarce public airwaves. Those airwaves were probably never quite as scant as advertised. But you can at least see the logic in having the government push for fair and balanced coverage in a media ecosystem dominated by a handful of television networks and radio stations.
That world, however, has vanished. The information ecosystem is not concentrated, with all of us watching Walter Cronkite tell us that “that’s the way it is.” For what it’s worth, I can hardly imagine anything weirder than watching the nightly news in 2024. The media is fragmented. The kids are getting their news from TikTok, at least for the next few weeks, and I don’t even have an account. I get a lot of my news from Mike Masnick, and most people have no idea who he is. For good reason, the Supreme Court made clear, back in Reno v. ACLU (1997), that the internet, with its virtually unlimited supply, shall not be subject to any “public interest” mandates.
For Carr to latch onto the special broadcasting rules, as though they were still relevant, is, as a matter of market dynamics, completely bizarre. The man is living in the past.
Over at the FTC, incoming chairman Andrew Ferguson recently announced that he wants to use antitrust law to promote free speech on social media. Here again, I am going to pass over a lot of problems. Let’s instead home in on the fact that, like Carr, Ferguson is, at best, talking about a market that is long gone.
Ferguson worries that social media platforms might “unlawfully limit[] Americans’ ability to exchange ideas freely and openly.” Put to one side that this concern doesn’t hang together as a matter of law, since even a monopolist has a First Amendment right to decide what speech it will and will not allow. This we know from Miami Herald v. Tornillo (1974). The bigger problem, for present purposes, is that his concern doesn’t hang together as a matter of fact. Ferguson waves the Hunter Biden laptop affair around as the bloody shirt. But if the laptop story had been suppressed by the platforms to the degree Ferguson claims, and if the platforms operated in a market as important and as concentrated as he supposes, how was it possible for the story to spread so far and wide? It would seem that the major platforms do not, in fact, possess a chokehold over the flow of information in our society.
And then, of course, there is X. Ferguson says there must be “suitable free-speech-respecting substitutes for the censorious”—he means “censorial”—social media platforms. He fears that we might lack or lose such substitutes if the major platforms “collude[] amongst each other to set shared censorship policies.” Such “an agreement,” he believes, would “be tantamount to an agreement not to compete on contract terms or product quality.”
Notice how Ferguson contends that product quality goes up as content moderation goes down. This means that, if X is indeed a “free-speech-respecting substitute” for the platforms Ferguson doesn’t like, X is providing a better product than its competitors are. We should therefore expect to see users flocking to X, while upstarts such as Bluesky whither on the vine. Instead, the headlines I run into these days say things like, “X sees largest user exodus since Elon Musk takeover.”
How are the platforms supposedly colluding? One thing Ferguson worries about is that they, or their advertisers, will use NewsGuard, a service that rates the trustworthiness of news outlets. In its way, NewsGuard is a content moderation tool, in that it labels content based on purported metrics of the reliability of the content’s source. Remember that in Ferguson’s view, content moderation diminishes product quality. His fear, then, is that a supplier might provide inputs that make its customers’ products worse.
On the platform side, we’d expect this to benefit competitors, such as X, that steer clear of the supplier and its product. On the advertiser side, we’d expect to see brands itching to get their copy onto the platforms that attract the most users through their superior practice of not moderating content, including by ignoring NewsGuard. Anticompetitive collusion in this context would be exceedingly difficult. An advertising cartel organized around boycotting NewsGuard-less platforms (or platforms that NewsGuard decides to rate poorly) would have to encompass much of the universe of potential advertisers. The larger the cartel, the higher the incentive to defect.
But again, regardless of where NewsGuard is being used or whom NewsGuard is rating, what’s going on at the less-moderated platform? Is X growing as people decide that they need to escape environments where useful information is being throttled? On the contrary, X appears to have lost, in the last two years, something like a hundred-million daily active users.
At any rate, Commissioner Ferguson is railing against a social-media market that might never have existed, but that certainly does not exist anymore.
The world has changed, as our sources of information continue to proliferate, yet people are stuck on stale issues. This is not necessarily just a Trumpist thing. The FTC’s antitrust lawsuit against Facebook springs to mind. (If you like that lawsuit, consider that a loss for Facebook might be a big help to Commissioner Ferguson, as it would support his claim of concentration in the social media market.) It is also worth mentioning the Google search case, which might look a little silly in a few years, if more and more people come to seek the information they need from AI. But I simply lob those out as candidates for further discussion, since it is time I ceded the floor.