I want to pick up a point first flagged yesterday by Eugene Volokh from yesterday’s decision in Moody v. NetChoice that could have relevance to new legislation, currently being challenged in court, that could ban Tik-Tok as being foreign owned. Some lines in Justice Barrett’s concurrence makes it more likely the Court would uphold a Tik-Tok ban, if the issue makes it to the Supreme Court.

I need to give a bit of wonky background to set the stage (and I’m writing about this more extensively in a larger piece that will post in a few weeks).

The Supreme Court has long rejected the idea in the campaign finance context that one could limit the speech of some to enhance the relative voice of others. The Court made such a statement first in the 1976 case, Buckley v. Valeo, and it played a major role in the Supreme Court’s 2010 Citizens United case. The idea of equalizing campaign spending to prevent distortion of the political marketplace became known as the “antidistortion” rationale, and it figured heavily in the 1990 Austin v. Michigan Chamber of Commerce case upholding a requirement that corporations use PACs for their political spending and not their general treasury funds. Citizens United emphatically rejected this antidistortion rationale, overturning Austin. It held corporations have a First Amendment right to spend unlimited sums independently to support or oppose candidates for office.

In part of his dissent in Citizens United, Justice Stevens raised the issue of spending by foreign individuals, governments, and entities. Federal law bars such spending, but Stevens suggested Citizens United raised the question whether such a ban by foreign corporations violated the First Amendment too. Justice Kennedy’s majority opinion in Citizens United explicitly said it was not reaching the issue.

Just a year later, a three judge court, in an opinion in Bluman v. FEC by then-judge Brett Kavanaugh upheld the foreign spending ban, saying it was justified by the government’s compelling interest in “democratic self-government.” The Supreme Court summarily affirmed, without any opinion and with no dissents. I’ve long criticized the Supreme Court for not explaining how the corporate ban could be forbidden but the foreign spending ban is just fine.

Fast forward to yesterday’s Moody decision. There was this particularly notable line from Justice Kagan’s majority opinion (who as solicitor general argued Citizens United on behalf of the government, but did not endorse the antidistortion rationale), citing Buckley, affirming the rejection of the antidistortion rationale:

But a State may not interfere with private actors’ speech to advance its own vision of ideological balance. States (and their citizens) are of course right to want an expressive realm in which the public has access to a wide range of views. That is, indeed, a fundamental aim of the First Amendment. But the way the First Amendment achieves that goal is by preventing the government from “tilt[ing] public debate in a preferred direction.” Sorrell v. IMS Health Inc., 564 U.S. 552, 578–579, 131 S.Ct. 2653, 180 L.Ed.2d 544 (2011). It is not by licensing the government to stop private actors from speaking as they wish and preferring some views over others. And that is so even when those actors possess “enviable vehicle[s]” for expression. Hurley, 515 U.S. at 577, 115 S.Ct. 2338. In a better world, there would be fewer inequities in speech opportunities; and the government can take many steps to bring that world closer. But it cannot prohibit speech to improve or better balance the speech market. On the spectrum of dangers to free expression, there are few greater than allowing the government to change the speech of private actors in order to achieve its own conception of speech nirvana. That is why we have said in so many contexts that the government may not “restrict the speech of some elements of our society in order to enhance the relative voice of others.” Buckley v. Valeo, 424 U.S. 1, 48–49, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam). That unadorned interest is not “unrelated to the suppression of free expression,” and the government may not pursue it consistent with the First Amendment.

Justice Amy Coney Barrett joined the majority opinion that opined on how a state ban on content moderation applied to social media platforms likely violated the First Amendment. But she added some caveats and issues for future cases, including this observation, citing Citizens United:

There can be other complexities too. For example, the corporate structure and ownership of some platforms may be relevant to the constitutional analysis. A speaker’s right to “decide ‘what not to say’ ” is “enjoyed by business corporations generally.” Hurley, 515 U.S. at 573–574, 115 S.Ct. 2338 (quoting Pacific Gas & Elec. Co. v. Public Util. Comm’n of Cal., 475 U.S. 1, 16, 106 S.Ct. 903, 89 L.Ed.2d 1 (1986)). Corporations, which are composed of human beings with First Amendment rights, possess First Amendment rights themselves. See Citizens United v. Federal Election Comm’n, 558 U.S. 310, 365, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010); cf. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 706–707, 134 S.Ct. 2751, 189 L.Ed.2d 675 (2014). But foreign persons and corporations located abroad do not. Agency for Int’l Development v. Alliance for Open Society Int’l, Inc., 591 U.S. 430, 433–436, 140 S.Ct. 2082, 207 L.Ed.2d 654 (2020). So a social-media platform’s foreign ownership and control over its content-moderation decisions might affect whether laws overriding those decisions trigger First Amendment scrutiny. What if the platform’s corporate leadership abroad makes the policy decisions about the viewpoints and content the platform will disseminate? Would it matter that the corporation employs Americans to develop and implement content-moderation algorithms if they do so at the direction of foreign executives? Courts may need to confront such questions when applying the First Amendment to certain platforms.

So we see here the same parallel move as in Citizens United. Reject the antidistortion rationale applied to corporations, but note that the rules might be different for foreign corporations, and limits on certain foreign corporations may not violate the First Amendment as they would for domestic corporations.

Surely this will play a role in the Tik-Tok litigation.