Elon Musk's social media platform, formerly known as Twitter and now referred to as 'X,' has failed to block a California state law requiring social media companies to disclose their content moderation practices publicly.

The law mandates that social media companies publicly share their policies on hate speech, disinformation, harassment, and extremism, along with reporting data on their enforcement of these rules. US District Judge William Shubb dismissed X's argument, stating that the reporting requirement, while burdensome, is justified within the context of the First Amendment. The case will proceed to a scheduling conference on February 26.

X, facing declining ad revenue since Musk took over, is also investigated by the European Union for suspected breaches under the Digital Services Act related to posts following Hamas' attacks on Israel.

Why does it matter?

After Musk's takeover of Twitter in 2022, promises to advertisers fell short as X, the platform's new identity, faced a surge in hate speech, per The New York Times. A Media Matters report in November revealed major brands' ads alongside white nationalist hashtags, leading Disney, Apple, Lionsgate, Comcast/NBCUniversal, and IBM to sever ties with X.