Tech Companies Aren't 'State Actors,' Judge Dismisses Conservative Bias Lawsuit Against Facebook, Twitter, Google, Apple

The United States appeals court in Washington, D.C. has dismissed a 2018 lawsuit that accused top tech and social media companies of undermining users' First Amendment rights, TechCrunch reported Wednesday.

What Happened

The lawsuit had alleged that the companies, including Apple Inc. AAPL, Facebook Inc. FB, Twitter Inc. TWTR, and Alphabet Inc. GOOGL GOOG have a bias against conservative political views on their platforms.

Far-right political activist Laura Loomer, who was banned by Twitter, Facebook, Instagram, and several other companies, is one of the plaintiffs in the case.

Dismissing the case, District Judge Trevor McFadden, repeated the same legal stance that has been common in such cases.

McFadden said the plaintiffs failed to prove that the technology companies are "state actors."

"The Plaintiffs have failed to allege state action. They suggest that the Platforms are ‘quasi-state actors because they regulate their public platforms, thereby regulating free speech within their public forums," the judge noted.

"But an entity can only be a ‘state actor' if ‘there is a sufficiently close nexus between the State and the challenged action of the regulated entity so that the action of the latter may fairly be treated as that of the State itself.'"

Why It Matters

The dismissal of the lawsuit comes at a time when President Donald Trump has threatened new regulations on social media companies, following his spat with Twitter over labeling one of his tweets as misinformation.

The president is said to be signing an executive order on Thursday that could end the immunity of digital giants from lawsuits arising out of third-party content posted on their platforms under Section 230 of the Communications Decency Act.

Price Action

Twitter shares closed 2.8% lower at $33.07 on Wednesday. Apple closed 0.4% higher at $318.11, while Facebook closed 1.3% lower at $229.14.

Alphabet Class A shares closed slightly lower at $1,420.28, and Class C shares inched higher at $1,417.84.