• by Wendy Davis , Yesterday

An organization representing small businesses plans to ask a federal judge to uphold a new South Carolina law that restricts online companies' ability to display content and harness data.

The South Carolina Small Business Chamber of Commerce proposes to argue in a friend-of-the-court brief that "excessive" social media use by young employees harms small businesses, according to court papers filed Thursday with U.S. District Court Judge Sherri Lydon in Columbia.

The group says its brief "will address the negative impact of excessive social media use upon the quality of South Carolina’s young workers as employees, who make up a substantial and essential part of the workforce for South Carolina’s small businesses, and, in turn, the negative impact upon South Carolina’s small businesses themselves."

The 26-year-old state organization, which represents 5,000 small businesses, is not affiliated with the U.S. Chamber of Commerce.

The South Carolina Social Media Regulation Act (H. 3431), which took effect in February after securing unanimous passage in the statehouse, is similar in some respects to California's 2022 age-appropriate design code.

Among other provisions, the South Carolina law requires online services likely to be accessed by people under 18 to use "reasonable care" to prevent harms including "compulsive usage," anxiety, depression, "severe emotional distress," and discrimination.

The law also requires platforms to allow users of all ages to opt out of personalized recommendations, and to turn off personalized recommendations by default for minors. The statute prohibits online services from facilitating behaviorally targeted ads to minors, and restricts companies' ability to collect data from all users.

The tech group NetChoice, which sued in February to block enforcement, argues that the law is unconstitutional for several reasons.

"The Act violates the First Amendment many times over," the group write in its request for an injunction. "It limits websites’ ability to create, disseminate, and facilitate online speech unless they exercise 'reasonable care' to ensure the speech they publish does not offend, cause distress, or prove too engaging for even one South Carolina minor."

NetChoice, which counts large platforms including Google and Meta as members, adds that the law restricts websites' speech by regulating their design. The tech organization has also sued to strike down social media laws in California and other states.

South Carolina officials counter that the law merely "creates common-sense, straightforward rules for covered online services that will help parents protect their children."

The South Carolina Small Business Chamber of Commerce president and CEO Frank Knapp, Jr. tells MediaPost that small businesses in the state have a "general discontent with students who are getting into the work environment."

Knapp attributes some of that discontent to social media, based partly on reports in academic literature that social platforms can give users instant positive reinforcement.

For employees, "the reward is a paycheck in one or two weeks," he says. By contrast, he adds, "they can be on their phone and get that positive reinforcement every day."

The organization plans to file its friend-of-the-court brief by April 30.