A combination photo from files of Facebook Google and Twitter logos
Facebook, Google and Twitter logos are seen in this combination photo from Reuters files. Reuters

A U.S. appeals court on Friday upheld a Texas law that bars large social media companies from banning or censoring users based on "viewpoint," a setback for technology industry groups that have argued that the Republican-backed measure would turn platforms into bastions of dangerous content.

The 5th U.S. Circuit Court of Appeals ruling sets up the potential for the U.S. Supreme Court to rule on the law, which conservatives and right-wing commentators have said is necessary to combat "Big Tech" from suppressing their views.

The Texas law was passed by the state's Republican-led legislature and signed by its Republican governor.

The tech groups on the losing end of Friday's ruling include NetChoice and the Computer & Communications Industry Association, which count Meta Platform's Facebook, Twitter and Alphabet Inc's YouTube as members.

The social media companies have sought to preserve rights to regulate user content when they believe it may lead to violence. They have cited concerns that unregulated platforms will enable extremists such Nazi supporters, terrorists and hostile foreign governments.

Some conservatives labeled their practices abusive, pointing to Twitter's permanent suspension of Donald Trump from the platform shortly after the Jan. 6, 2021, attack on the U.S. Capitol by a mob of the former president's supporters. Twitter had cited "the risk of further incitement of violence" as a reason for the move.

The Texas law, known as HB20, forbids social media companies with at least 50 million monthly active users from acting to "censor" users based on "viewpoint," and allows either users or the Texas attorney general to sue to enforce it.

In signing the bill last year, Texas Governor Greg Abbott said, "There is a dangerous movement by some social media companies to silence conservative ideas and values. This is wrong and we will not allow it in Texas."

The industry groups sued to try to block the law, challenging it as a violation of the free speech rights of companies under the U.S. Constitution's First Amendment.

Because the 5th Circuit ruling conflicts with part of a ruling by the 11th Circuit, the aggrieved parties have a stronger case for petitioning the Supreme Court to hear the matter.

In May, the 11th Circuit found that most of a similar Florida law violates the companies' free speech rights and cannot be enforced.