Constitutionality challenges ahead for Trump executive order: MIT author

President Trump signed an executive order that challenges social media platforms to oversee posts on their website. Sinan Aral, David Austin Professor of Management at MIT and Author of “The Hype Machine” joins Yahoo Finance’s On The Move panel to discuss.

Video Transcript

JULIE HYMAN: You're watching "On The Move" on Yahoo Finance. I'm Julie Hyman, alongside Adam Shapiro. Well, President Trump signed an executive order yesterday aimed at curbing some of the liability protection that social media companies have when it comes to their latitude to remove certain postings, or tweets in the case of Twitter, which is really at the center of this.

The president, of course, has continued to tweet. And Twitter has put up various messages about his tweets. For example, after there were protests overnight in Minneapolis, as well as looting in some cases, he tweeted, I can't stand back and watch this happen to a great American city, Minneapolis. A total lack of leadership.

He goes on-- I'm skipping ahead a bit-- to say any difficulty and we will assume control. But when the looting starts, the shooting starts. That tweet in particular was blocked. You then had to click on something to go ahead and view that tweet.

And that phrase, by the way, when the looting starts, the shooting starts, hearkening back to protests in the '60s in particular in Florida. And that was an infamous phrase associated with protests at that point. So obviously a lot to unpack here.

To help us do that is Sinan Aral, who is a frequent guest on the program. He is the David Austin Professor of Management and Marketing, IT and Data Science at MIT, and also author of "The Hype Machine," which is about some of these very issues. Sinan, rather than asking you a specific question, I would just say what's your reaction to all of this sort of exploding all at once over the past, say, 48 hours?

SINAN ARAL: Yeah, so the Trump administration telegraphed this executive order over the last year or so. A lot of people seem surprised by it. But I sort of saw it coming in the book I predicted, that he would actually propose this executive order. It's a draft currently.

But just to get everybody on the same page, this order essentially gives the FCC the power to decide whether companies should be afforded Section 230 protection based on audits of their policing strategy, their content policing strategies, content moderation strategies, or complaints that they get about those moderation strategies. And the real issue here is that this is a huge move to make the executive branch an arbiter of speech, essentially, a speech police.

The reason it does that-- the FCC does not report to the Executive Branch. It reports to Congress. But it is a politically-appointed commission. And so it can be stacked by the Executive Branch with people favorable to its views.

The problem for me here is that while I agree with the congressman in your last segment, Congressman Young, that we need to have hearings, and there are delicate issues here, and we need to have experts testify and so on. I agree with that. But an executive order appointing a five-person commission in charge of deciding whether 230 protection applies or not is not the right way to do it.

So there's a misconception about Section 230. Some people see it as a shield from liability for tech-- for social media platforms. But it actually applies to all internet companies. It applies to the commenting section of the "New York Times." It applies to Wikipedia.

And, in fact, most people agree that Section 230 makes all of these businesses possible. And the reason that's true is imagine a company is liable for any lawsuit brought by any of the 3 to 4 billion users of say social media alone against any other of the social media users. And they have to be liable for any and all of these.

ADAM SHAPIRO: Sinan?

SINAN ARAL: Yeah?

ADAM SHAPIRO: I'm glad you brought that up. We functioned-- I'm older than you are. We functioned very well before the internet without Section 230. And the "New York Times" was sued on occasion. But we had letters to the editor.

So I realize that Twitter and Facebook are the new marketplace of ideas. But at the end of the day, why not get rid of 230? And, by the way, the president might be the one who suffers, because then Twitter would say we've got to protect ourselves. You can't tweet here anymore.

Why not just get rid of it?

SINAN ARAL: No, Section 230 is absolutely essential to free speech on the internet. It's also essential to major, major lines of technology business that exists today. The reason it's different is because the "New York Times" produces and puts out its own content, which it is liable for and should be liable for. It writes the content. In fact-checks the content and so on.

The scale of the content of user-generated content, say on Facebook, is so much larger, so much more difficult to police, that it becomes impossible to have at all without civil-- protection from civil liability. And therefore, you need Section 230.

Now does that mean that anything goes? No. There is a balance between free speech and harmful speech. The question, and the way I describe this in my book, is not where is that line. The question is who should draw that line.

And in my opinion, a five-person politically appointed commission is not the right place. It's in the courts to decide where the First Amendment applies. And it's in the Legislature to carve out exceptions, like the Stop Sex Trafficking Act, which is an example of a legislature saying here is harm that we think should be carved out of these protections.

DAN HOWLEY: Hey Sinan, what does this mean then for companies, right? So you look at-- so look at Twitter, Facebook. Obviously they're reliant on user-generated content. But Google is as well. Amazon's entire review section-- virtually everything on the internet relies on user-generated content. It's a foundational portion of the internet.

So you look at companies that rely on this. Say this goes through and they lose this liability shield. What happens? What do these companies do?

Do they change their business models entirely? Do they go under?

SINAN ARAL: Basically I think anyone who advocates for essentially repealing Section 230 writ large of the Communications Decency Act does not understand the digital economy. If you were to repeal Section 230, you would have to-- the first thing that would happen is there would be a slew of lawsuits. And the companies would not be able to survive under that slew of lawsuits. They would shut down all of the user-generated content that applies.

And so there would have to be major changes to all of the companies that you mentioned. I mean, like you said, it is a major enabling piece of legislation for much of the internet.

RICK NEWMAN: Hey, Sinan. Rick Newman here. So a fundamental question-- is there a problem with Section 230? Does it need to be altered in some way? Or is this kind of messy situation as good as it's going to get?

SINAN ARAL: Well, I think that it is-- the best way to deal with it is to take a deliberative process approach. My opinion is that the Judicial Branch and the Legislative Branch, which move slowly and consider long histories of case law about what is the First Amendment and where it shouldn't apply or not, or a balancing of all the interests of people that are represented in Congress by congressmen and women is the right place to make those decisions.

And so what we should do is we should make carve outs where appropriate to balance speech and harm. And that should come through legislation that's deliberative. And then the courts should be assigned the ability to sort of rule on where the First Amendment applies and where it doesn't apply.

These are very deliberative, long-term processes. And I think that when you appoint a politically appointed five-person commission to be the arbiter of this, it becomes incredibly politicized incredibly quickly. And that's the real problem with this executive order.

I do believe that this will be challenged by the tech companies and others on constitutionality grounds. And I do believe that there is a very strong case that the executive order is unconstitutional, and that if it were to go to the Supreme Court, that even this conservative court would strike it down as unconstitutional.