Do Kids Have a Constitutional Right to be Addicted to Social Media?
Fractionally Legal: Jesse's Legal Newsletter v13 Looks at New York's SAFE for Kids Act and how Social Media Companies Collect the Rent.
Hi! Happy summer! In honor of the “official” change of seasons, I’m changing the format of my “Fractionally Legal” newsletter. Instead of two long-ish pieces, I’m writing a series of short thoughts about current issues in the law, politics, and technology (my passions) which are hopefully going to add up to a larger theme. Let's see how I do. If you like the new format, please tell me in the comments!
In this edition, we’re going to explore a topic very relevant to some of my clients and anyone with kids who are itching to use social media or who are already addicted to it: New York’s new law that restricts the use of “addictive” social media feeds for minors. Those “addictive feeds” are the result of algorithms that elevate some content over others based on what it perceives to be the user’s interest. It's one of quite a few laws like it being passed by states around the country due to our federal government’s seeming inability to regulate tech.
The two new laws are the SAFE for Kids Act and the New York Child Data Protection Act. Taken together, the laws require social media companies to get parental permission to use algorithms to curate the feed of anyone under 18. Social media companies also can’t send notifications between 12 a.m. and 6 a.m. unless parents give explicit consent (every adult I know has these things turned off because who needs to be awakened in the middle of the night by a ping from Instagram? But kids, not so much I guess). Without parents' permission, the social media feed is going to be chronological. While kids can follow and like whatever they want, nothing is algorithmically promoted. And presumably, if you’re under 18 and don’t follow the thing, then it won’t show up in their feed.
We’ve had algorithmic feeds for about 15 years and we’re all aware of how addictive social media can be, so the fact that this is among the first such regulations is pretty astounding. But that leads to the larger question of why social media and other “sharing” platforms like YouTube and TikTok are almost totally unregulated in the United States. It’s actually part of a long and not particularly proud legal tradition of using the Constitution to protect unearned profits (“rents”). Let's take a look.
Renting Your Attention, For Free
Economists do a lot of thinking about “rents.” In economic terms, a “rent” is something received due to some unearned benefit. Anyone who can figure out how to corner the market (monopolies) or price fix, and charge more for their product, or who forces up the cost of labor by requiring collective bargaining (unions), are earning a rent. Rents are also earned on anything that is regulated. When we issue permits and licenses that give the exclusive right to use a public good—like leases that allow for resource extraction on public lands or the use of radio waves and broadband—the government is allowing the holder of the lease or license to earn a rent. When we issue a patent to an inventor, we’re allowing the inventor to exclusively exploit a useful invention for a period of time so the holder of the patent can collect a rent. Rents are not all bad, especially when you get some.
But what about when those “rents” are collected on other people’s attention? That is what social media is doing. You may think you’re not paying for social media, but you are. The platforms are collecting rents from you in the form of all the data you’re providing about what you're interested in (superheroes, makeup, fireworks). Did they earn that data? Maybe initially because they built a cool product where you can share your vacation pictures and political opinions, and so could your friends. That was fun, remember? But then they introduced an “algorithm” that was designed to hold your attention and keep you posting and consuming and sending them data. And the rent just went up.
Today, the typical user spends 2.5 hours a day on social media. That's a lot of rent collected. And don’t forget that because they collected all that data, they have the exclusive right to it. If you’ve tried to sell a product or service via digital advertising, you know how valuable those rents are. But hey, there is only one place you can get such rich data. I did not invent this concept. Some smarter people wrote a cool article about how rents are collected on social media platforms.
It's worth understanding how rents work in the context of social media because no one is going to give up a rent without a fight. And the social media companies are teeing one up.
Adult Choices
Most of the time, we can see rents being collected. Sometimes, as with patents and licenses given by the government, it's just part of the system. Other times, we just sort of stew over it. Paid too much for a beer at the ball game? That is a rent. Gotten billed for a “test” from your doctor even though you never approved of the price or the lab? Another rent because of the way the lab cornered the market on that test and convinced the doctor to use it. But as adults, we make choices to have a second (or third) beer, and, in theory at least, we consented to get that medical test (price transparency is just designed to inform you of the rent before you pay it). I also consented to buy that concert ticket using the crappy Ticketmaster software and paying their exorbitant fees, a rent which may or may not be illegal.
No one seems to notice the rents collected by social media companies because although your time and attention are limited and have value, spending your time and attention scrolling endlessly through social media feeds is your right as an adult. It is not the best use of your time but, hey, everyone needs a mental break and adults know (or should know) how addictive this stuff is. And that rent that is taken in the form of your data is not typically valued by the user, so it feels like social media is free. It's not. In fact, it is the greatest rent-collecting machine ever invented.
Taking Data From a Baby
But this calculus does not hold true for children. In the same way that most adults don’t value their data, children don’t tend to value their time or attention. But their attention is actually quite valuable since the things they see and read today are going to have an outsized influence on them. Also, kids, even teenagers, don’t have a lifetime of context to understand, say, how and why people have different body types, or that guns really kill people. And they don’t understand that social media is designed to addict them. So they scroll endlessly, providing that data, and the algorithm keeps them hooked, providing more data—the rent. The social media companies don’t care whether the rents come from kids or adults. Why would they? The price that advertisers pay to reach kids is the same, if not greater, than the price advertisers pay to reach adults. That data has real value once harvested.
People who profit from taking rent (candy?) from children are not going to change their ways without a fight, and that is exactly what New York State is in for when it starts enforcing its new laws. Essentially, New York is saying: Give that candy back to the baby... no rents for the social media companies!
Freedom to Consume
There is a broad consensus, at least publicly, that it's a good idea to limit the ability of social media companies to collect rents from kids. But that won’t stop the legal challenges arising from, of all places, the freedom of speech absolutists. They argue that attempts to limit the reach of algorithms are free speech violations, banned by the First Amendment to the US Constitution.
They may have a point. Based on some legal precedent that is too complicated to go into, restrictions on social media are considered to be “content-based” speech restrictions, meaning the government is allowing some speech, but not others. Once you understand that these restrictions are “content-based,” the First Amendment arguments are pretty simple: the SAFE Act is a “content-based restriction[] on private individuals’ First Amendment right to receive information anonymously and without government-imposed controls, as well as social media companies’ right to provide that information in the manner they choose.”
The ACLU argues that content-based restrictions are subject to “strict scrutiny” by the Court. Essentially, that means that for the law to be constitutional, the government better have a pretty darn good reason to limit the speech, and the law limiting the speech needs to be “narrowly tailored” to accomplish that goal. It's a tough standard to meet. If you’re interested in the constitutional and First Amendment law on the issue, which is fascinating, read the ACLU’s memo.
I think that courts are very likely to apply strict scrutiny to the SAFE Act and other attempts to regulate social media algorithms. But even under that standard, it would seem to me as if the regulations should survive. That is because the government has a compelling interest in addressing social media addiction – in other words, the way that social media is designed to keep kids hooked and provide them more and more data and more rents from users.
Notably, the ACLU wants to focus on the depression, anxiety, etc., that social media causes. That's because it's much easier to argue that banning algorithms is not narrowly tailored to the government interest because it's blocking all content, not just the (subjectively) depressing, anxiety-producing, or violent, etc., content. Again, I don’t know how it's going to turn out, but addiction pays the rent, so I’d focus on that before talking about the effects of that addiction (depression, etc.). I think that is the winning argument. Happy to pitch in and defend the law, although I bet the money is better on the other side.
IMHO, what's really happening is another example of smart lawyers using constitutional law to protect their clients’ rents, a practice which is pretty well established and has been used to fight generations of government regulation. 120 years ago, New York’s laws prohibiting bakers from working more than 60 hours a week (!) were successfully challenged because someone claimed a baker has a constitutionally protected freedom to bake as many hours as they want. Changes in the law, and a basic understanding that unfettered capitalism is exploitative, changed that. But lawyers still commandeer the Constitution to protect their clients’ rents. Should the government try to hold down the cost of prescription drugs? Well, that is unconstitutional. Should companies need to disclose their climate impacts? Well, that’s unconstitutional too. And those are just the issues of the day. I could go on and on.
Where you sit on the left or the right often dictates where you stand on these issues. For example, I would guess that a lot of people who love using the Constitution to protect the right of privacy don’t love using the Constitution to protect the right to contract, and vice versa. But protecting kids from pernicious algorithms is something we all should be able to agree on. Let's hope New York’s new laws survive constitutional challenges, even if it means that some social media companies need to part with their rents.
Keep thinking, keep building,
Jesse
Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their US legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at www.yourfractionalgc.com and book a complimentary 30-minute consultation at Contact Your Fractional GC.