Episode 246: Tech Check — AI Moratorium, Character AI Lawsuit, FTC, Digital Services Act, and FSC v. Paxton

So to Speak: The Free Speech Podcast
Host: Nico Perino
Guests: Ari Cohn (Lead Counsel for Tech Policy at FIRE), Corbin Barthold (Internet Policy Council at Tech Freedom)
Release Date: July 10, 2025

Introduction

In Episode 246 of So to Speak: The Free Speech Podcast, host Nico Perino, alongside guests Ari Cohn and Corbin Barthold, delves into the latest developments at the nexus of technology and free speech. The conversation navigates through significant legislative changes, high-profile lawsuits, regulatory actions, and international policies impacting the landscape of free expression in the digital age.

AI Moratorium and the One Big Beautiful Bill

The episode opens with a discussion on the recent legislative maneuvering surrounding the One Big Beautiful Bill. Originally, the House passed the bill with a narrow margin (215-214), embedding a provision to halt state and local AI enforcement for a decade. However, the Senate swiftly removed this moratorium with an overwhelming vote (99-1), leading to the bill's eventual signing into law on July 4th.

Corbin Barthold criticizes the 10-year moratorium, highlighting the rapid advancements in AI:
"10 years was kind of insane. Like in 10 years, I plan to have an AI girlfriend." (04:10)

He expresses concerns that without federal oversight, states may implement diverse and conflicting AI regulations, exacerbating the existing culture war over AI biases and moderation. Ari Cohn adds that such fragmentation could disproportionately hinder small AI startups due to the exorbitant costs of compliance, effectively favoring larger tech companies capable of navigating the labyrinthine regulatory environment.
"Compliance with all these different states... is going to leave the field basically at the mercy of the biggest players who can afford that kind of thing." (12:07)

Character AI Lawsuit and First Amendment Implications

A pivotal segment of the episode focuses on a landmark lawsuit filed in Florida. Megan Garcia has sued Character Technologies following the tragic suicide of her 14-year-old son, who had formed an emotional attachment to an AI chatbot portraying Daenerys Targaryen from Game of Thrones. Character Technologies attempted to dismiss the case, arguing that the chatbot's outputs are protected expressive content under the First Amendment. However, Judge Ann Conway denied this motion, suggesting that AI-generated outputs may not qualify as protected speech.

Corbin Barthold challenges this judicial stance, arguing that algorithms embody expressive choices:
"There is a strong First Amendment tradition of listeners having rights to receive information that this is flouting." (26:05)

He contends that if AI outputs are not protected, it opens the door for government overreach into controlling informational content. Ari Cohn echoes these concerns, emphasizing the potential dangers of allowing governmental bodies to dictate AI-generated speech:
"Imagine a situation where a kid in school is doing research on human rights atrocities during World War II... Can [AI] output not say one word about the internment of Japanese Americans during World War II?" (35:31)

This discussion underscores the fragile balance between regulating AI for safety and preserving fundamental free speech protections.

FTC Settlement with Omnicom Group and Inter Public Group (IPG)

The conversation transitions to the Federal Trade Commission's recent settlement with major advertising firms Omnicom Group and Inter Public Group (IPG). The FTC targeted these companies in an antitrust investigation, alleging a coordinated boycott that could violate competition laws. The proposed consent order restricts the companies from steering advertising dollars away based on publishers' political or ideological viewpoints.

Ari Cohn critiques the FTC's stance, arguing that it infringes upon free speech by limiting corporate discretion in associating with or boycotting based on ideological grounds:
"You can have the opinion. You just can't act on the opinion." (42:24)

Corbin Barthold further elaborates that such regulatory actions morph economic decisions into expressive ones, thereby undermining First Amendment rights:
"Free speech is normally a rough and tumble. That is what it is by its nature." (45:50)

The episode highlights the tension between antitrust regulations and free speech, questioning the legitimacy of government intervention in corporate advertising strategies.

European Digital Services Act and Its Impact

Shifting focus internationally, the podcast examines the European Union's Digital Services Act (DSA), which imposes stringent obligations on digital platforms to combat illegal content and ensure transparency. These requirements include annual transparency reports and detailed disclosures on recommender systems.

Corbin Barthold criticizes the DSA for imposing onerous compliance measures on American tech giants, arguing that it transforms social media platforms into highly regulated entities akin to banks with fiduciary duties:
"They are trying to turn social Media platforms into corporations that operate more like banks with auditing and acting like they have fiduciary duties..." (59:21)

Ari Cohn warns about the DSA's extraterritorial reach, which could extend European speech regulations to American platforms, potentially clashing with the U.S. First Amendment:
"We're seeing literal attempts by Europe to impose speech regulations on Americans." (60:21)

The discourse emphasizes the challenges American companies face in adhering to EU regulations while maintaining free speech standards inherent to U.S. law.

Supreme Court's Decision in Free Speech Coalition v. Paxton

Concluding the episode, Nico Perino brings attention to the Supreme Court's decision in Free Speech Coalition v. Paxton. The case upheld a Texas law mandating age verification for accessing adult content websites, which passed intermediate scrutiny under constitutional standards.

Corbin Barthold voices concerns about the ruling's broader implications for social media, cautioning that it could pave the way for similar regulations targeting various forms of online speech:
"If you read the decision that way, then oh yes, it is absolutely going to go toward social media. We will be fighting that fight." (64:08)

Ari Cohn discusses potential downstream effects, suggesting that future state laws could target different categories of speech deemed harmful to minors, complicating the regulatory landscape:
"There is room for monkey business." (67:39)

The episode highlights the Supreme Court's role in shaping the boundaries of free speech in the digital era, particularly concerning protections for minors and the potential ripple effects on broader online expression.

Key Takeaways

• Regulatory Fragmentation: The removal of the AI moratorium provision in the One Big Beautiful Bill could lead to a patchwork of state-level AI regulations, posing significant challenges for smaller tech companies.

• First Amendment Protections for AI: The Character AI lawsuit raises critical questions about whether AI-generated content qualifies as protected speech, with potential ramifications for governmental control over AI outputs.

• Antitrust vs. Free Speech: The FTC's settlement with major advertising firms underscores the conflict between antitrust regulations and the protection of free speech in corporate advertising decisions.

• International Implications: The EU's Digital Services Act presents compliance challenges for American tech companies, potentially imposing European speech standards on U.S.-based platforms.

• Supreme Court's Influence: The Free Speech Coalition v. Paxton decision sets a precedent that could influence future regulations affecting various forms of online speech, especially those targeting minors.

Notable Quotes

• Corbin Barthold:
  "10 years was kind of insane. Like in 10 years, I plan to have an AI girlfriend." (04:10)

• Corbin Barthold:
  "There is a strong First Amendment tradition of listeners having rights to receive information that this is flouting." (26:05)

• Ari Cohn:
  "Imagine a situation where a kid in school is doing research on human rights atrocities during World War II... Can [AI] output not say one word about the internment of Japanese Americans during World War II?" (35:31)

• Corbin Barthold:
  "Free speech is normally a rough and tumble. That is what it is by its nature." (45:50)

• Corbin Barthold:
  "They are trying to turn social Media platforms into corporations that operate more like banks with auditing and acting like they have fiduciary duties..." (59:21)

• Corbin Barthold:
  "If you read the decision that way, then oh yes, it is absolutely going to go toward social media. We will be fighting that fight." (64:08)

Conclusion

Episode 246 of So to Speak navigates the intricate and often contentious intersections of technology, regulation, and free speech. As AI continues to evolve and integrate into daily life, the hosts underscore the urgency of safeguarding First Amendment protections against an increasingly complex regulatory landscape. The discussions highlight the need for cohesive federal policies that balance innovation with ethical considerations, ensuring that the foundational rights of free expression remain intact in the digital age.

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This summary is intended to provide a comprehensive overview of Episode 246 for those who have not listened. For a deeper dive into the discussions and nuances, tuning into the full podcast episode is highly recommended.