X and the Covenant of Good Faith and Fair Market: Fraud in the Inception

When a contract party pays for a service under the presumption of equal access, yet is never informed that a throttling mechanism will be used to meter or diminish that service at the direction of a third, non-governmental entity, the contract is compromised at the outset. This hidden mechanism becomes even more problematic when the third party makes throttling decisions based on a social-conformance profile it has assigned to the buyer.

Under such conditions, users are charged as if they are receiving full, equal participation in a public commodity, while in fact experiencing discriminatory contract fulfillment and selective product impairment triggered by their identity, viewpoints, or classification — criteria determined not by the platform’s stated terms of service, but by an unaccountable external actor.

If the provider degrades or withholds the paid-for service — visibility, advertising utility, algorithmic distribution, or fair access to market by other paying parties who have an interest in the contracted party — not for violations of the terms of service, but because of external preferences, then the behavior becomes analytically indistinguishable from:

 – throttling one customer at the behest of another,

 – selling an inferior product at a full-price rate, and

 – administering a concealed, criteria-dependent class system within the market itself.

The ethically salient question is not whether a platform moderates — as moderation is an operational requirement. The issue is whether the platform:

 – covertly delegates moderation power to outside parties,

 – without disclosure,

 – and without transparent, appealable standards.

This is where the covenant of good faith and fair dealing is breached, and where the transaction shifts from a simple service agreement into a form of inception-level fraud.

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Great point, this is the kind of legal reasoning that may eventually protect free speech.

Social media companies may be able to dodge this legal problem by reducing user fees if users are throttled; and/or refunding user payments, with fines added, after the fact if the company is caught.

If that were included in terms of service, not throttling or being milder about throttling would be a big selling point.

X is already working that angle.

It’s bad that advertisers can influence public discourse as much as they do, especially as advertising itself is often a bribe or payoff for doctored information.

This is all fixable if handled well. Legal skills backed by open source AI monitoring. ABN