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Dangerous Corporate First Amendment Overreach: Three Information Trends and a Data Application

May 25, 2016 , , , ,

Over the last decade, information technology and telecommunications companies have been part of a rising tide of corporate claims to free speech, invoking the First Amendment for everything from broadband service to search engine results to software code. But do some of these theories go too far? It would be a calamity if commercial speech protections evolve into a broad bulwark against legitimate regulations, especially where corporate power threatens online expression and the free flow of information. 

Public Knowledge believes that this topic deserves greater caution and scrutiny, especially within the digital rights community. To that end, we share the following guest blog post by Professor Ellen P. Goodman of Rutgers Law School. You can follow Professor Goodman on Twitter at @ellgood.


An appeal playing out in the 9th Circuit Court of Appeals over mobile phone labeling exposes a phenomenon of great import to the future of technology: corporate use of the First Amendment to ax regulation. The stakes are seemingly rather small in the case of CTIA v. City of Berkeley. It involves a humble municipal ordinance requiring cell phone retailers to disclose the same information about permissible levels of radiofrequency (RF) radiation that the Federal Communications Commission already requires mobile phone manufacturers to reveal in their manuals.

Yet small stakes cases are rarely litigated with such massive firepower. Representing CTIA is Ted Olson, President George W. Bush’s solicitor general. On Berkeley’s side is Harvard law professor Larry Lessig. What’s really at issue here is the scope of corporate free speech rights, especially in connection with commercial disclosures. CTIA claims that the ordinance violates the retailers’ rights by compelling speech.

The kind of “right to know” information requirement that Berkeley has enacted is a flashpoint for movement conservatives seeking to use the First Amendment to advance economic interests. With varying degrees of success, groups like the Washington Legal Foundation and Cato Institute have challenged country-of-origin labels, mercury disposal labels, graphic tobacco warnings, calorie disclosures, airline tax disclosures, obesity warnings for sugary sodas, and product sourcing disclosures. They argue that these government-mandated disclosure regimes mask ideological agendas, and that the information that must be disclosed is either not purely factual or tendentious, or both.

What the Supreme Court has said about compelled disclosure in the context of commercial speech, in its 1985 case Zauderer v. Office of Disc. Counsel, is that the liberty interest in not providing information is relatively small. Zauderer itself concerned a disclosure of “purely factual and uncontroversial” information. There has been disagreement in the lower courts as to what those adjectives — factual and uncontroversial — mean. In addition, some courts think it’s important for disclosures to have an anti-deception rationale, as they did in Zauderer. Others have concluded that it makes no difference whether the disclosure mandate aims to dispel deception or to correct information asymmetries or otherwise supply consumers with relevant information.

Scholars are taking up these questions with growing frequency. Fred Schauer criticizes what he sees as “First Amendment opportunism,” whereby business entities for whom expression is only incidental (unlike the press) seek to constitutionalize ordinary economic regulation. John Coates has documented this trend with an empirical study tracing the rise of these kinds of First Amendment claims since the 1980s. Amanda Shanor and Robert Post have described this trend as “First Amendment Lochnerism” and Leslie Kendrick has called it “First Amendment expansionism.” I’ve argued that, in the context of mandatory product warnings, courts have exaggerated corporate liberty at the expense of consumer informational interests. On the other hand, Jonathan Adler welcomes more rigorous review of compelled corporate disclosures, as do Jane Bambauer and Derek Bambauer, who argue for an “information libertarianism.”


There are three intersecting forces to watch and one particularly important implication for the future of information flows. The trends are:

1. The growth of regulation by disclosure.

In their critical assessment of mandated disclosures, Omri Ben-Shahar and Ben Schneider document the increase in disclosure requirements. To some extent, governments use disclosure when they lack authority or political will to regulate harms. As in the CTIA case, state and local governments warn against harms that federal preemption prevents them from regulating directly. Or, as in another California case on the labeling of sugary sodas, disclosure is an alternative to a soda tax or direct regulatory action that might be less popular (or less able to survive a lobbying assault).

In other cases, governments use disclosures to influence markets in a pro-social direction. This is what happened with the SEC mandate that public companies disclose whether their products contain conflict minerals, which was struck down by the D.C. Circuit. Disclosures like nutritional labels and the FCC’s new broadband performance label have two related objectives: inform consumers about what they’re buying and move suppliers to improve their products. Naturally, as disclosure requirements proliferate, the interest of regulated entities in getting rid of them intensifies.

2. The development of corporations are people.

Most recently, in the 2014 Hobby Lobby case, the Supreme Court doubled down on the notion that corporations have individual rights. There, it held that closely held corporations had religious liberty interests in not providing contraception as part of an employee health plan. The 2010 Citizens United case took the same approach to the First Amendment, refusing to distinguish between the campaign speech of individuals and that of non-press corporations in the context of campaign finance laws. If corporations have the same civil liberties as individuals, it is natural to begin to think of them as having consciences that can be offended by compelled disclosure.

When it comes to commercial speech, the First Amendment interest has always been in the utility of the speech to consumers rather than in the liberty interest of the speaker. This is changing with the elevation of the corporation to person. As a result, corporations are pushing on an open door in arguing that mandatory disclosure is akin to a forced loyalty pledge.

3. The development of data = protected speech.”

At the same time that corporations are getting more robust First Amendment protection, the class of information that is covered as protected speech is growing. In 2014, Sorrell v. IMS Health held that physicians’ drug-prescribing data was protected by the First Amendment and could not be regulated for the sake of patient privacy. Some scholars understand this case to stand for the proposition that data is speech. If so, regulation of data practices or mandated data production will be difficult to sustain over constitutional objection. The world increasingly runs on algorithmic processes and data analysis — prices, credit scores, employment prospects, information access. Requirements that companies disclose data inputs or analytic functions may all be subject to First Amendment review, making the black box of big data processing all the more impenetrable.

The convergence of these three trends in compelled disclosure cases has implications far beyond product labeling. We got a glimpse of where we’re headed in Apple’s fight with the FBI on unlocking the San Bernardino shooter’s iPhone. Apple argued, in addition to its other objections, that it has a First Amendment right to refuse to produce code that would unlock the phone. Writing and executing this code would “amount[] to compelled speech and viewpoint discrimination in violation of the First Amendment,” in part because Apple would have to “sign” the code in order to defeat the phone’s encryption.

To call an authentication function a signature has obvious rhetorical force, as if the signing implicates individual conscience as when a real person must sign a confession or loyalty oath. As Neil Richards has written, the question is not whether code or data is speech. The question is whether it deserves First Amendment protection. Much of the time, the code is performing a utilitarian and not an expressive function. Equating code with protected speech, while at the same time elevating corporate speech rights, has the potential to constitutionalize any regulation of any information industry participant.


First Amendment expansionism poses risks to both individual speech rights and technological innovation. The same arguments that have prevailed over commercial disclosure mandates could be used to assail huge swaths of ordinary regulation: securities disclosure, advertising regulation, food labeling, and the rest. If all these regulations are subject to heightened scrutiny, it is likely that heightened scrutiny will be watered down. If diluted in order to save commercial regulation, First Amendment review could also be diluted when applied to individual rights cases.

If the mandatory production or disclosure of code is compelled speech, warranting heightened constitutional review, consider the implications for consumer protection as new code-driven applications emerge. What might appear to be performance requirements would be transformed into speech regulations. Security and privacy loom especially large for the emerging Internet of Things. Would a mandate to encode security protocols for networked devices be deemed compelled speech?

As these IoT applications develop, there is a significant risk that consumers and cities and other entities will be locked in to the vendors that first create the sensor networks (e.g., environmental sensors, health monitors, traffic sensors). Interoperability will require the production and exchange of data. Unless we’re prepared to constitutionalize this entire field — subjecting all regulation to the most searching constitutional review — we need commonsense distinctions. We need to distinguish corporate (non press) from individual speech, functional data from protected speech.

 

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