Social Media Platforms as Common Carriers

I have not had as much time as I would like recently to pursue my research interests in the regulation of social media platforms. Before the pandemic, I wrote favourably of the Broadcasting and Telecommunications Legislative Review Panel:

What are the social media behemoths — Facebook, Google, Netflix, Twitter, Youtube, etc — that have come to dominate much of the contemporary public sphere? Answering this question is crucial to determining what role courts, economic regulators and legislatures should play in respect of the behemoths’ activities. Are they utilities, traditionally subject to regulation, in earlier times by the courts and in modern times by legislation and independent regulatory bodies? Or are they enterprises engaged in the communication of ideas and knowledge, traditionally regulated only where their activities ran into the general law of the land? I suggest that although the behemoths do not fit neatly into either of these categories, they are closer to the utility category.

There is, of course, ongoing debate about the appropriateness of regulating these and other entities. In that regard, I found the analysis of common carriage in the recent decision of the U.S. Court of Appeals for the Fifth Circuit in Netchoice v Plaxton to be most enlightening.

At issue was a law passed by Texas limiting the capacity of social media platforms to engage in censorship. Much of the case was about the First Amendment rights of the platforms, and there is parallel litigation about a Florida law, so the issue is likely to go to the Supreme Court of the United States before too long. But Judge Oldham’s opinion contains a discussion of common carrier regulation which is as relevant outside the United States as it is within. I am going to reproduce it at length:

The doctrine’s roots lie in the notion that persons engaged in
“common callings” have a “duty to serve.” This principle has been part of
Anglo-American law for more than half a millennium. For early English
courts, this principle meant that private enterprises providing essential
public services must serve the public, do so without discrimination, and
charge a reasonable rate. The first “carriers” to which this principle was applied were ferries. As Justice Newton of the Court of Common Pleas
recounted, a ferry operator is “required to maintain the ferry and to operate it and repair it for the convenience of the common people.” Trespass on the Case in Regard to Certain Mills, YB 22 Hen. VI, fol. 14 (C.P. 1444).

By the time of the American Founding, the duty to serve had
crystallized into a key tenet of the common law. English courts applied this
principle to numerous “common callings,” like stagecoaches, barges,
gristmills, and innkeepers. See 3 Blackstone, supra, at *164 (discussing
the duties of innkeepers, bargemasters, and farriers). For example,
Blackstone explained that a public innkeeper offers “an implied engagement to entertain all persons who travel that way; and upon this universal assumpsit an action on the case will lie against him for damages, if he without good reason refuses to admit a traveler.” Ibid. Or as Sir Matthew Hale explained regarding wharves, when a private person builds the only wharf in a port, “the wharf and crane and other conveniences are affected with a public interest, and they cease to be juris privati only.” Matthew Hale, De Portibus Maris, in A Collection of Tracts Relative to the Law of England 77–78 (Francis Hargrave ed., 1787). The common law thus required the wharf owner to serve the public and not to impose discriminatory or unreasonable rates. See id. at 77 (wharf owner may not take “arbitrary and excessive duties for cranage”).

The common carrier’s duty to serve without discrimination was
transplanted to America along with the rest of the common law…It got its first real test with the rise of railroad empires in the second half of
the nineteenth century. Rail companies became notorious for using rate differentials and exclusive contracts to control industries dependent on
cross-country shipping, often structuring contracts to give allies (like the
Standard Oil Company) impenetrable monopolies. See id. at 112–15, 129.
American courts, however, often found that these discriminatory practices violated the railroads’ common carrier obligations. See, e.g., Messenger v. Pa. R.R. Co., 37 N.J.L. 531, 534 (1874) (refusing to enforce rate differentials because “the carrier cannot discriminate between individuals for whom he will render the service”); New England Express Co. v. Me. Cent. R.R. Co., 57 Me. 188, 196 (1869) (rejecting exclusive contract because “[t]he very
definition of a common carrier excludes the idea of the right to grant
monopolies or to give special and unequal preferences”).

And even when courts did not impose common carrier duties, they reaffirmed that state legislatures were vested with the power to do so by statute, as England did with the Railway and Canal Act of 1854. See Haar & Fessler, supra, at 115–23; see also, e.g., Fitchburg R.R. Co. v. Gage, 78 Mass. (12 Gray) 393, 398 (1859) (because railroads are common carriers, unequal rates are “very fully, and reasonably, subjected to legislative supervision and control”).

The telegraph was the first communications industry subjected to
common carrier laws in the United States. See Genevieve Lakier, The Non-First Amendment Law of Freedom of Speech, 134 Harv. L. Rev. 2299, 2320–24 (2021). Invented in 1838, the telegraph revolutionized how people engaged with the media and communicated with each other over the next halfcentury. But by the end of the nineteenth century, legislators grew “concern[ed] about the possibility that the private entities that controlled this amazing new technology would use that power to manipulate the flow of information to the public when doing so served their economic or political self-interest.” Id. at 2321. These fears proved well-founded. For example, Western Union, the largest telegraph company, sometimes refused to carry messages from journalists that competed with its ally, the Associated Press— or charged them exorbitant rates. See id. at 2321–22. And the Associated Press in turn denied its valuable news digests to newspapers that criticized Western Union. See ibid. Western Union also discriminated against certain political speech, like strike-related telegraphs. See id. at 2322. And it was widely believed that Western Union and the Associated Press “influenc[ed] the reporting of political elections in an effort to promote the election of candidates their directors favored.” Ibid.; see, e.g., The Blaine Men Bluffing, N.Y. Times, Nov. 6, 1884, at 5 (accusing them of trying to influence the close presidential election of 1884 by misreporting and delaying the transmission of election returns).

In response, States enacted common carrier laws to limit
discrimination in the transmission of telegraph messages. The first such law, passed by New York, required telegraph companies to “receive d[i]spatches from and for . . . any individual, and on payment of their usual charges . . . to transmit the same with impartiality and good faith.” Act of April 12, 1848, ch. 265, § 11, 1848 N.Y. Laws 392, 395. New York further required such companies to “transmit all d[i]spatches in the order in which they [we]re received.” Id. § 12. Many States eventually passed similar laws, see Lakier, supra, at 2320, 2322, and Congress ultimately mandated that telegraph companies “operate their respective telegraph lines as to afford equal facilities to all, without discrimination in favor of or against any person, company, or corporation whatever.” Telegraph Lines Act, ch. 772, § 2, 25 Stat. 382, 383 (1888).

Courts considering challenges to these laws—or requests to impose
common carrier duties even in their absence—had to grapple with deciding whether and to what extent the common carrier doctrine applied to new innovations and technologies. For transportation and communications firms, courts focused on two things. First, did the carrier hold itself out to serve any member of the public without individualized bargaining? As Justice Story had explained in the transportation context, “[t]o bring a person within the description of a common carrier, he must exercise it as a public employment; he must undertake to carry goods for persons generally; and he must hold himself out as ready to engage in the transportation of goods for hire as a business, not as a casual occupation.” Joseph Story, Commentaries on the Law of Bailments § 495 (9th ed. 1878).

Courts applied this same holding-out test to novel communications
enterprises. For example, in State ex rel. Webster v. Nebraska Telephone Co., 22 N.W. 237 (Neb. 1885), a Nebraska lawyer sought a writ of mandamus to compel a telephone company to put a telephone in his office. The Supreme Court of Nebraska granted the writ, explaining that the company “ha[d] undertaken with the public to send messages from its instruments, one of which it propose[d] to supply to each person or interest requiring it.” Id. at 239. Because the company had “so assumed and undertaken to the public,” it could not arbitrarily deny the lawyer a telephone. Ibid. Other courts agreed and clarified that telephone companies owed this common carrier obligation even though they also imposed “reasonable rules and regulations” upon their customers. Chesapeake & Potomac Tel. Co. v. Balt. & Ohio Tel. Co., 7 A. 809, 811 (Md. 1887); see also, e.g., Walls v. Strickland, 93 S.E. 857, 858 (N.C. 1917) (describing this rule as “well settled” by “numerous cases”).

Second, drawing on Hale’s influential seventeenth-century formulation, courts considered whether the transportation or communications firm was “affected with a public interest.” This test might appear unhelpful, but it was “quickened into life by interpretation” over centuries of common law decisions. See Walton H. Hamilton, Affectation with Public Interest, 39 Yale L.J. 1089, 1090 (1930). Courts applying this test looked to whether a firm’s service played a central economic and social role in society. This discussion by the Supreme Court of Indiana is an instructive

The telephone is one of the remarkable productions of the
present century, and, although its discovery is of recent date, it
has been in use long enough to have attained well-defined
relations to the general public. It has become as much a matter
of public convenience and of public necessity as were the
stage-coach and sailing vessel a hundred years ago, or as the
steam-boat, the railroad, and the telegraph have become in later
years. It has already become an important instrument of
commerce. No other known device can supply the
extraordinary facilities which it affords. It may therefore be
regarded, when relatively considered, as an indispensable
instrument of commerce. The relations which it has assumed
towards the public make it a common carrier of news—a
common carrier in the sense in which the telegraph is a
common carrier—and impose upon it certain well-defined
obligations of a public character. Hockett v. Indiana, 5 N.E. 178, 182 (Ind. 1886); see also, e.g., Webster, 22 239 (“That the telephone, by the necessities of commerce and public use, has become a public servant, a factor in the commerce of the nation, and of a great portion of the civilized world, cannot be questioned.”).

In determining whether a communications firm was “affected with a
public interest,” courts also considered the firm’s market share and the
relevant market dynamics. In Hale’s original formulation, if a wharf owner operated the “only [wharf ] licensed by the queen” or if “there [wa]s no other wharf in that port,” then the wharf was “affected with a public interest,” and the owner acquired a duty to serve without discrimination. Hale, supra, at 77–78. Similarly, a railroad, telegraph, or telephone company’s status as the only provider in a region heavily suggested it was affected with the public interest. See, e.g., Webster, 22 N.W. at 238 (“While there is no law giving [the phone company] a monopoly[,] . . . the mere fact of this territory being covered by the ‘plant’ of [the company], from the very nature and character of its business, gives it a monopoly of the business which it transacts.”).

Judge Oldham goes on to explain why the social media platforms can be treated as common carriers. The following passage is illustrative:

In addition to their social importance, the Platforms play a central role in American economic life. For those who traffic in information—journalists, academics, pundits, and the like—access to the Platforms can be indispensable to vocational success. That’s because in the modern economy, the Platforms provide the most effective way to disseminate news, commentary, and other information. The same is true for all sorts of cultural figures, entertainers, and educators, a growing number of whom rely for much or all of their income on monetizing expression posted to the Platforms. Finally, even people and companies who traffic in physical goods often lean heavily on the Platforms to build their brand and market their products to consumers. That’s why the Platforms, which earn almost all their revenue through advertising, are among the world’s most valuable corporations. Thus, just like the telephone a century ago, the Platforms have become a key “factor in the commerce of the nation, and of a great portion of the civilized world.” Webster, 22 N.W. at 239. Or at the very least, one cannot say the Texas legislature’s judgment to that effect was unreasonable

The whole opinion is worth reading, as are Justice Thomas’s observations about common carriage.

This content has been updated on October 14, 2022 at 17:36.