Competition Corner: The FTC: Free Speech Champion?
Issue #40
G’day,
The FTC’s public inquiry on how tech platforms degrade or deny users access to services based on their affiliations or speech wraps up this Wednesday.
The FTC notes that “[t]ech firms can employ confusing or unpredictable internal procedures that cut users off, sometimes with no ability appeal the decision. Such actions taken by tech platforms may harm consumers, affect competition, may have resulted from a lack of competition, or may have been the product of anti-competitive conduct.”
But just how much can the FTC do to police platform decisions to moderate user speech? The short answer is not a lot.
The Supreme Court is clear that the first amendment allows social media platforms to unilaterally moderate what speech they carry on their platforms. The platforms may certainly argue that moderating speech is essential to preserve certain levels of decorum, a certain Overtown window, user experience, or to appeal to a segment of their user base. These may be procompetitive justifications for speech moderation. But they wouldn’t even need to do that. U.S. antitrust law permits a firm with market power to unilaterally raise price, restrict output or even degrade quality. Digital platforms are not “common carriers” subject to the same regulation as telephone services or Internet Service Providers (ISPs).
Plaintiff enforcement agencies could try to block a merger in a social media market by arguing that the combined platform or platforms would likely harm consumers and competition by using its market power to degrade the user experience. The ability to speak and express oneself fairly is a qualitative metric. If they could convince a court to accept a gerrymandered market definition that limits the market to a very specific segment of social media, then they may have greater chance of success here. But there is nothing they can do about a single social media platform that decides to strongly regulate the speech that it hosts.
Content moderation that rises to the level of editorialization comparable to a magazine or newspaper may deprive the platform of its liability shield for the potentially defamatory or otherwise sanctionable speech of its users under Section 230 of the Communications Decency Act. But this too isn’t a matter for the FTC or antitrust laws.
With that being said, the agencies may have an antitrust case if they can show that a tech platform colluded with others to restrict speech, such as through an agreement between two or more platforms to police or remove certain speech or opinions, or to otherwise regulate the nature of content. These may constitute agreements to unreasonably restrain trade under Sherman Act Section 1, or may be an unfair method of competition under the FTC Act Section 5 as they violate the spirit and policy of the Sherman Act, or would eventually lead to a Sherman Act violation if they were allowed. For instance, the FTC has successfully obtained consent orders from firms that stop them from sending invitations to collude under Section 5.
A platform colluding with or acting under pressure from government agents to censor or suppress user speech may also amount to a first amendment violation since they’d be acting as an agent of the government, and the first amendment strongly limits the government’s power to censor. But as the recent case of Murthy v. Missouri (2024) makes clear, such cases are likely to face uphill hurdles around standing of the plaintiffs and establishing a sufficiently strong link between government pressure and the platform’s decision about its content moderation policy even under the conservative SCOTUS majority.
One last option would be for the FTC to go after platforms for advertising standards of openness around speech and expression and failing to uphold these commitments to users. The first amendment doesn’t preclude government agencies from policing commercial speech that unfairly misleads or deceives consumers. This wouldn’t be an easy case to make since the agency would need to show that the platform’s commitment to a certain speech standard that it didn’t uphold is what prevented them from going to another platform.
Alternatively, the FTC could use its consumer protection rulemaking authority to bar platforms from making false representations to users about the standard of speech and viewpoint non-discrimination that they intend to uphold. This does not amount to much in terms of compelling platforms to host any other kind of opinion. But it’s something.
Regardless of the law’s limits, it’s likely that we’ll still see an extensive FTC investigation and report documenting instances of aggrieved digital platform users who felt unable to have their say or express themselves, and this will likely draw substantial public interest for some time to come. But what do you think? As always, send us your thoughts.
Also, check out Alden Abbott’s recent appearance on a panel hosted by Tech Freedom and the Competitive Enterprise Institute to discuss the FTC and free speech.
Who is to blame for high drug prices?
Even as they struggle with the Trump administration’s recent executive order that attempts to pressure them into lowering drug prices using lawsuits, investigations, export restrictions and other threats, big pharma continues to lobby for coercive, anticompetitive laws against PBMs or Pharmaceutical Benefit Managers. As I explain in a recent op-ed for Counterpunch, the proposed DRUG Act is the latest of these. By delinking PBM compensation from the size of the rebates they negotiate for health insurance plans, it’s likely to lead to less competition and even costlier drugs. I also appeared on KAFF radio’s The Jeff Kennedy show in Flagstaff, Arizona, to discuss the piece.
The Case for Algorithmic Pricing: Consumer Welfare, Market Efficiency, and Policy Missteps
Antitrust enforcers worldwide are debating how to police firms that use pricing algorithms as a means to collude and facilitate anticompetitive behavior. But the reality is that the algorithms themselves are neutral tools that greatly benefit consumers and businesses. Check out this policy brief from Mercatus MA fellow Cody Taylor.
After much uncertainty about tariffs, the administration is finally coming out with international deals that sound promising for competition and free trade. If the recently announced UK-US free trade agreement is a sign of things to come, then we could see not just tariffs, but a whole range of anticompetitive regulatory barriers come down for the benefit of competition and US businesses. Check out Alden’s latest column in Forbes.
See you in June!
Satya Marar
Visiting postgraduate fellow
Mercatus Center at George Mason University
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