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Answering my own question, it seems that "Sunset acts" are a common occurrence in legislation that end programs and activities that have more or less run their course or stopped being effective or meaningful.
The reason this Sunset Act is being mentioned is...
... so my understanding is that this Sunset will remove some outdated protections from social media platforms, effectively forcing them to adapt with better policies and practices or open themselves up to litigation.
The fuck you mean "outdated"? That prevision is not a "social media" thing, it's a "any platform that hosts user generated content" thing.
It's the only thing that even allows user generated content in the first place. It would effectively break any forum and even hosted chat applications because it would make the platform liable for anything their users do that breaks the law.
But it also adds a bit of protection from BS lawsuits. Considering the current administration has already sued platforms because of users exercising their first amendment this provision insures they don't actually have a case.
And that's related to all the platforms based in the US are currently getting strong armed to turn over personal information for any users that criticizes ICE.
That is why they want to get rid of that provision. They want to censor people. They want to isolate people. It's why they forced the sale of TikTok so they could crack down on political news they didn't like while promoting propaganda.
They want to get rid of these easy avenues of communication and information for the average person.
Don't get me wrong. Facebook, twitter, and the like need to be regulated and broken up under antitrust, but getting rid of this provision is not going to do any of that. It's just going to make them crack down on people's freedom of speech even more while still allowing hate speech.
"Outdated" is pretty debatable. The fear is that once platforms are legally liable for user posted content it will lead to an environment of censorship. Anything the federal government (or indeed private entities) don't want talked about, they can simply tell social media companies to take down. Chances are the companies will comply because they don't want to deal with the potential consequences of litigation.
It's the "Oops, Everything Is Facebook Now" Act. Squeezing out competition through threats of litigation.