Archives For section 230

How does antitrust measure nonprice effects like political bias?

Ben Sperry —  17 September 2020

In the latest congressional hearing, purportedly analyzing Google’s “stacking the deck” in the online advertising marketplace, much of the opening statement and questioning by Senator Mike Lee and later questioning by Senator Josh Hawley focused on an episode of alleged anti-conservative bias by Google in threatening to demonetize The Federalist, a conservative publisher, unless they exercised a greater degree of control over its comments section. The senators connected this to Google’s “dominance,” arguing that it is only because Google’s ad services are essential that Google can dictate terms to a conservative website. A similar impulse motivates Section 230 reform efforts as well: allegedly anti-conservative online platforms wield their dominance to censor conservative speech, either through deplatforming or demonetization.

Before even getting into the analysis of how to incorporate political bias into antitrust analysis, though, it should be noted that there likely is no viable antitrust remedy. Even aside from the Section 230 debate, online platforms like Google are First Amendment speakers who have editorial discretion over their sites and apps, much like newspapers. An antitrust remedy compelling these companies to carry speech they disagree with would almost certainly violate the First Amendment.

But even aside from the First Amendment aspect of this debate, there is no easy way to incorporate concerns about political bias into antitrust. Perhaps the best way to understand this argument in the antitrust sense is as a non-price effects analysis. 

Political bias could be seen by end consumers as an important aspect of product quality. Conservatives have made the case that not only Google, but also Facebook and Twitter, have discriminated against conservative voices. The argument would then follow that consumer welfare is harmed when these dominant platforms leverage their control of the social media marketplace into the marketplace of ideas by censoring voices with whom they disagree. 

While this has theoretical plausibility, there are real practical difficulties. As Geoffrey Manne and I have written previously, in the context of incorporating privacy into antitrust analysis:

The Horizontal Merger Guidelines have long recognized that anticompetitive effects may “be manifested in non-price terms and conditions that adversely affect customers.” But this notion, while largely unobjectionable in the abstract, still presents significant problems in actual application. 

First, product quality effects can be extremely difficult to distinguish from price effects. Quality-adjusted price is usually the touchstone by which antitrust regulators assess prices for competitive effects analysis. Disentangling (allegedly) anticompetitive quality effects from simultaneous (neutral or pro-competitive) price effects is an imprecise exercise, at best. For this reason, proving a product-quality case alone is very difficult and requires connecting the degradation of a particular element of product quality to a net gain in advantage for the monopolist. 

Second, invariably product quality can be measured on more than one dimension. For instance, product quality could include both function and aesthetics: A watch’s quality lies in both its ability to tell time as well as how nice it looks on your wrist. A non-price effects analysis involving product quality across multiple dimensions becomes exceedingly difficult if there is a tradeoff in consumer welfare between the dimensions. Thus, for example, a smaller watch battery may improve its aesthetics, but also reduce its reliability. Any such analysis would necessarily involve a complex and imprecise comparison of the relative magnitudes of harm/benefit to consumers who prefer one type of quality to another.

Just as with privacy and other product qualities, the analysis becomes increasingly complex first when tradeoffs between price and quality are introduced, and then even more so when tradeoffs between what different consumer groups perceive as quality is added. In fact, it is more complex than privacy. All but the most exhibitionistic would prefer more to less privacy, all other things being equal. But with political media consumption, most would prefer to have more of what they want to read available, even if it comes at the expense of what others may want. There is no easy way to understand what consumer welfare means in a situation where one group’s preferences need to come at the expense of another’s in moderation decisions.

Consider the case of The Federalist again. The allegation is that Google is imposing their anticonservative bias by “forcing” the website to clean up its comments section. The argument is that since The Federalist needs Google’s advertising money, it must play by Google’s rules. And since it did so, there is now one less avenue for conservative speech.

What this argument misses is the balance Google and other online services must strike as multi-sided platforms. The goal is to connect advertisers on one side of the platform, to the users on the other. If a site wants to take advantage of the ad network, it seems inevitable that intermediaries like Google will need to create rules about what can and can’t be shown or they run the risk of losing advertisers who don’t want to be associated with certain speech or conduct. For instance, most companies don’t want to be associated with racist commentary. Thus, they will take great pains to make sure they don’t sponsor or place ads in venues associated with racism. Online platforms connecting advertisers to potential consumers must take that into consideration.

Users, like those who frequent The Federalist, have unpriced access to content across those sites and apps which are part of ad networks like Google’s. Other models, like paid subscriptions (which The Federalist also has available), are also possible. But it isn’t clear that conservative voices or conservative consumers have been harmed overall by the option of unpriced access on one side of the platform, with advertisers paying on the other side. If anything, it seems the opposite is the case since conservatives long complained about legacy media having a bias and lauded the Internet as an opportunity to gain a foothold in the marketplace of ideas.

Online platforms like Google must balance the interests of users from across the political spectrum. If their moderation practices are too politically biased in one direction or another, users could switch to another online platform with one click or swipe. Assuming online platforms wish to maximize revenue, they will have a strong incentive to limit political bias from its moderation practices. The ease of switching to another platform which markets itself as more free speech-friendly, like Parler, shows entrepreneurs can take advantage of market opportunities if Google and other online platforms go too far with political bias. 

While one could perhaps argue that the major online platforms are colluding to keep out conservative voices, this is difficult to square with the different moderation practices each employs, as well as the data that suggests conservative voices are consistently among the most shared on Facebook. 

Antitrust is not a cure-all law. Conservatives who normally understand this need to reconsider whether antitrust is really well-suited for litigating concerns about anti-conservative bias online. 

In Antitrust & Competition, Constitutional Law, Facebook, First Amendment, Google, Merger Guidelines, Platforms, Truth on the Market, Twitter , , , , , , , , , , ,
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Senator Hawley’s Unconstitutional, Unconservative Attack on the Internet

Ben Sperry —  26 June 2020

Twitter’s decision to begin fact-checking the President’s tweets caused a long-simmering distrust between conservatives and online platforms to boil over late last month. This has led some conservatives to ask whether Section 230, the ‘safe harbour’ law that protects online platforms from certain liability stemming from content posted on their websites by users, is allowing online platforms to unfairly target conservative speech. 

In response to Twitter’s decision, along with an Executive Order released by the President that attacked Section 230, Senator Josh Hawley (R – MO) offered a new bill targeting online platforms, the “Limiting Section 230 Immunity to Good Samaritans Act”. This would require online platforms to engage in “good faith” moderation according to clearly stated terms of service – in effect, restricting Section 230’s protections to online platforms deemed to have done enough to moderate content ‘fairly’.  

While seemingly a sensible standard, if enacted, this approach would violate the First Amendment as an unconstitutional condition to a government benefit, thereby  undermining long-standing conservative principles and the ability of conservatives to be treated fairly online. 

There is established legal precedent that Congress may not grant benefits on conditions that violate Constitutionally-protected rights. In Rumsfeld v. FAIR, the Supreme Court stated that a law that withheld funds from universities that did not allow military recruiters on campus would be unconstitutional if it constrained those universities’ First Amendment rights to free speech. Since the First Amendment protects the right to editorial discretion, including the right of online platforms to make their own decisions on moderation, Congress may not condition Section 230 immunity on platforms taking a certain editorial stance it has dictated. 

Aware of this precedent, the bill attempts to circumvent the obstacle by taking away Section 230 immunity for issues unrelated to anti-conservative bias in moderation. Specifically, Senator Hawley’s bill attempts to condition immunity for platforms on having terms of service for content moderation, and making them subject to lawsuits if they do not act in “good faith” in policing them. 

It’s not even clear that the bill would do what Senator Hawley wants it to. The “good faith” standard only appears to apply to the enforcement of an online platform’s terms of service. It can’t, under the First Amendment, actually dictate what those terms of service say. So an online platform could, in theory, explicitly state in their terms of service that they believe some forms of conservative speech are “hate speech” they will not allow.

Mandating terms of service on content moderation is arguably akin to disclosures like labelling requirements, because it makes clear to platforms’ customers what they’re getting. There are, however, some limitations under the commercial speech doctrine as to what government can require. Under National Institute of Family & Life Advocates v. Becerra, a requirement for terms of service outlining content moderation policies would be upheld unless “unjustified or unduly burdensome.” A disclosure mandate alone would not be unconstitutional. 

But it is clear from the statutory definition of “good faith” that Senator Hawley is trying to overwhelm online platforms with lawsuits on the grounds that they have enforced these rules selectively and therefore not in “good faith”.

These “selective enforcement” lawsuits would make it practically impossible for platforms to moderate content at all, because they would open them up to being sued for any moderation, including moderation  completely unrelated to any purported anti-conservative bias. Any time a YouTuber was aggrieved about a video being pulled down as too sexually explicit, for example, they could file suit and demand that Youtube release information on whether all other similarly situated users were treated the same way. Any time a post was flagged on Facebook, for example for engaging in online bullying or for spreading false information, it could similarly lead to the same situation. 

This would end up requiring courts to act as the arbiter of decency and truth in order to even determine whether online platforms are “selectively enforcing” their terms of service.

Threatening liability for all third-party content is designed to force online platforms to give up moderating content on a perceived political basis. The result will be far less content moderation on a whole range of other areas. It is precisely this scenario that Section 230 was designed to prevent, in order to encourage platforms to moderate things like pornography that would otherwise proliferate on their sites, without exposing themselves to endless legal challenge.

It is likely that this would be unconstitutional as well. Forcing online platforms to choose between exercising their First Amendment rights to editorial discretion and retaining the benefits of Section 230 is exactly what the “unconstitutional conditions” jurisprudence is about. 

This is why conservatives have long argued the government has no business compelling speech. They opposed the “fairness doctrine” which required that radio stations provide a “balanced discussion”, and in practice allowed courts or federal agencies to determine content  until President Reagan overturned it. Later, President Bush appointee and then-FTC Chairman Tim Muris rejected a complaint against Fox News for its “Fair and Balanced” slogan, stating:

I am not aware of any instance in which the Federal Trade Commission has investigated the slogan of a news organization. There is no way to evaluate this petition without evaluating the content of the news at issue. That is a task the First Amendment leaves to the American people, not a government agency.

And recently conservatives were arguing businesses like Masterpiece Cakeshop should not be compelled to exercise their First Amendment rights against their will. All of these cases demonstrate once the state starts to try to stipulate what views can and cannot be broadcast by private organisations, conservatives will be the ones who suffer.

Senator Hawley’s bill fails to acknowledge this. Worse, it fails to live up to the Constitution, and would trample over the rights to freedom of speech that it gives. Conservatives should reject it.

In Constitutional Law, Facebook, Federal Trade Commission, First Amendment, Platforms, Truth on the Market, Twitter , , , , , , , , ,
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The Earn IT Act and the Institutional Limits of Congress

Kristian Stout —  14 May 2020

As the initial shock of the COVID quarantine wanes, the Techlash waxes again bringing with it a raft of renewed legislative proposals to take on Big Tech. Prominent among these is the EARN IT Act (the Act), a bipartisan proposal to create a new national commission responsible for proposing best practices designed to mitigate the proliferation of child sexual abuse material (CSAM) online. The Act’s proposal is seemingly simple, but its fallout would be anything but.

Section 230 of the Communications Decency Act currently provides online services like Facebook and Google with a robust protection from liability that could arise as a result of the behavior of their users. Under the Act, this liability immunity would be conditioned on compliance with “best practices” that are produced by the new commission and adopted by Congress.  

Supporters of the Act believe that the best practices are necessary in order to ensure that platform companies effectively police CSAM. While critics of the Act assert that it is merely a backdoor for law enforcement to achieve its long-sought goal of defeating strong encryption. 

The truth of EARN IT—and how best to police CSAM—is more complicated. Ultimately, Congress needs to be very careful not to exceed its institutional capabilities by allowing the new commission to venture into areas beyond its (and Congress’s) expertise.

More can be done about illegal conduct online

On its face, conditioning Section 230’s liability protections on certain platform conduct is not necessarily objectionable. There is undoubtedly some abuse of services online, and it is also entirely possible that the incentives for finding and policing CSAM are not perfectly aligned with other conflicting incentives private actors face. It is, of course, first the responsibility of the government to prevent crime, but it is also consistent with past practice to expect private actors to assist such policing when feasible. 

By the same token, an immunity shield is necessary in some form to facilitate user generated communications and content at scale. Certainly in 1996 (when Section 230 was enacted), firms facing conflicting liability standards required some degree of immunity in order to launch their services. Today, the control of runaway liability remains important as billions of user interactions take place on platforms daily. Related, the liability shield also operates as a way to promote good samaritan self-policing—a measure that surely helps avoid actual censorship by governments, as opposed to the spurious claims made by those like Senator Hawley.

In this context, the Act is ambiguous. It creates a commission composed of a fairly wide cross-section of interested parties—from law enforcement, to victims, to platforms, to legal and technical experts—to recommend best practices. That hardly seems a bad thing, as more minds considering how to design a uniform approach to controlling CSAM would be beneficial—at least theoretically.

In practice, however, there are real pitfalls to imbuing any group of such thinkers—especially ones selected by political actors—with an actual or de facto final say over such practices. Much of this domain will continue to be mercurial, the rules necessary for one type of platform may not translate well into general principles, and it is possible that a public board will make recommendations that quickly tax Congress’s institutional limits. To the extent possible, Congress should be looking at ways to encourage private firms to work together to develop best practices in light of their unique knowledge about their products and their businesses. 

In fact, Facebook has already begun experimenting with an analogous idea in its recently announced Oversight Board. There, Facebook is developing a governance structure by giving the Oversight Board the ability to review content moderation decisions on the Facebook platform. 

So far as the commission created by the Act works to create best practices that align the incentives of firms with the removal of CSAM, it has a lot to offer. Yet, a better solution than the Act would be for Congress to establish policy that works with the private processes already in development.

Short of a more ideal solution, it is critical, however, that the Act establish the boundaries of the commission’s remit very clearly and keep it from venturing into technical areas outside of its expertise. 

The complicated problem of encryption (and technology)

The Act has a major problem insofar as the commission has a fairly open ended remit to recommend best practices, and this liberality can ultimately result in dangerous unintended consequences.

The Act only calls for two out of nineteen members to have some form of computer science background. A panel of non-technical experts should not design any technology—encryption or otherwise. 

To be sure, there are some interesting proposals to facilitate access to encrypted materials (notably, multi-key escrow systems and self-escrow). But such recommendations are beyond the scope of what the commission can responsibly proffer.

If Congress proceeds with the Act, it should put an explicit prohibition in the law preventing the new commission from recommending rules that would interfere with the design of complex technology, such as by recommending that encryption be weakened to provide access to law enforcement, mandating particular network architectures, or modifying the technical details of data storage.

Congress is right to consider if there is better policy to be had for aligning the incentives of the platforms with the deterrence of CSAM—including possible conditional access to Section 230’s liability shield.But just because there is a policy balance to be struck between policing CSAM and platform liability protection doesn’t mean that the new commission is suited to vetting, adopting and updating technical standards – it clearly isn’t. Conversely, to the extent that encryption and similarly complex technologies could be subject to broad policy change it should be through an explicit and considered democratic process, and not as a by-product of the Act. 

In COVID-19, Facebook, Google, Platforms, Regulation, Truth on the Market, Twitter , , , , , ,
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FDA Denaturing Rules Are Toxic for Small Distillers

Jacob Grier —  1 April 2020

[TOTM: The following is part of a blog series by TOTM guests and authors on the law, economics, and policy of the ongoing COVID-19 pandemic. The entire series of posts is available here.

This post is authored by Jacob Grier, (Freelance writer and spirits consultant in Portland, Oregon, and the author of The Rediscovery of Tobacco: Smoking, Vaping, and the Creative Destruction of the Cigarette).]

The COVID-19 pandemic and the shutdown of many public-facing businesses has resulted in many sudden shifts in demand for common goods. The demand for hand sanitizer has drastically increased for hospitals, businesses, and individuals. At the same time, demand for distilled spirits has fallen substantially, as the closure of bars, restaurants, and tasting rooms has cut craft distillers off from their primary buyers. Since ethanol is a key ingredient in both spirits and sanitizer, this situation presents an obvious opportunity for distillers to shift their production from the former to the latter. Hundreds of distilleries have made this transition, but it has not without obstacles. Some of these reflect a real scarcity of needed supplies, but other constraints have been externally imposed by government regulations and the tax code.

Producing sanitizer

The World Health Organization provides guidelines and recipes for locally producing hand sanitizer. The relevant formulation for distilleries calls for only four ingredients: high-proof ethanol (96%), hydrogen peroxide (3%), glycerol (98%), and sterile distilled or boiled water. Distilleries are well-positioned to produce or obtain ethanol and water. Glycerol is used in only small amounts and does not currently appear to be a substantial constraint on production. Hydrogen peroxide is harder to come by, but distilleries are adapting and cooperating to ensure supply. Skip Tognetti, owner of Letterpress Distilling in Seattle, Washington, reports that one local distiller obtained a drum of 34% hydrogen peroxide, which stretches a long way when diluted to a concentration of 3%. Local distillers have been sharing this drum so that they can all produce sanitizer.

Another constraint is finding containers in which to the put the finished product. Not all containers are suitable for holding high-proof alcoholic solutions, and supplies of those that are recommended for sanitizer are scarce. The fact that many of these bottles are produced in China has reportedly also limited the supply. Distillers are therefore having to get creative; Tognetti reports looking into shampoo bottles, and in Chicago distillers have re-purposed glass beer growlers. For informal channels, some distillers have allowed consumers to bring their own containers to fill with sanitizer for personal use. Food and Drug Administration labeling requirements have also prevented the use of travel-size bottles, since the bottles are too small to display the necessary information.

The raw materials for producing ethanol are also coming from some unexpected sources. Breweries are typically unable to produce alcohol at high enough proof for sanitizer, but multiple breweries in Chicago are donating beer that distilleries can bring up to the required purity. Beer giant Anheuser-Busch is also producing sanitizer with the ethanol removed from its alcohol-free beers.

In many cases, the sanitizer is donated or sold at low-cost to hospitals and other essential services, or to local consumers. Online donations have helped to fund some of these efforts, and at least one food and beverage testing lab has stepped up to offer free testing to breweries and distilleries producing sanitizer to ensure compliance with WHO guidelines. Distillers report that the regulatory landscape has been somewhat confusing in recent weeks, and posts in a Facebook group have provided advice for how to get through the FDA’s registration process. In general, distillers going through the process report that agencies have been responsive. Tom Burkleaux of New Deal Distilling in Portland, Oregon says he “had to do some mighty paperwork,” but that the FDA and the Oregon Board of Pharmacy were both quick to process applications, with responses coming in just a few hours or less.

In general, the redirection of craft distilleries to producing hand sanitizer is an example of private businesses responding to market signals and the evident challenges of the health crisis to produce much-needed goods; in some cases, sanitizer represents one of their only sources of revenue during the shutdown, providing a lifeline for small businesses. The Distilled Spirits Council currently lists nearly 600 distilleries making sanitizer in the United States.

There is one significant obstacle that has hindered the production of sanitizer, however: an FDA requirement that distilleries obtain extra ingredients to denature their alcohol.

Denaturing sanitizer

According to the WHO, the four ingredients mentioned above are all that are needed to make sanitizer. In fact, WHO specifically notes that it in most circumstances it is inadvisable to add anything else: “it is not recommended to add any bittering agents to reduce the risk of ingestion of the handrubs” except in cases where there is a high probably of accidental ingestion. Further, “[…] there is no published information on the compatibility and deterrent potential of such chemicals when used in alcohol-based handrubs to discourage their abuse. It is important to note that such additives may make the products toxic and add to production costs.”

Denaturing agents are used to render alcohol either too bitter or too toxic to consume, deterring abuse by adults or accidental ingestion by children. In ordinary circumstances, there are valid reasons to denature sanitizer. In the current pandemic, however, the denaturing requirement is a significant bottleneck in production.

The federal Tax and Trade Bureau is the primary agency regulating alcohol production in the United States. The TTB took action early to encourage distilleries to produce sanitizer, officially releasing guidance on March 18 instructing them that they are free to commence production without prior authorization or formula approval, so long as they are making sanitizer in accordance with WHO guidelines. On March 23, the FDA issued its own emergency authorization of hand sanitizer production; unlike the WHO, FDA guidance does require the use of denaturants. As a result, on March 26 the TTB issued new guidance to be consistent with the FDA.

Under current rules, only sanitizer made with denatured alcohol is exempt from the federal excise tax on beverage alcohol. Federal excise taxes begin at $2.70 per gallon for low-volume distilleries and reach up to $13.50 per gallon, significantly increasing the cost of producing hand sanitizer; state excise taxes can raise these costs even higher.

More importantly, denaturing agents are scarce. In a Twitter thread on March 25, Tognetti noted the difficulty of obtaining them:

To be clear, if I didn’t have to track down denaturing agents (there are several, but isopropyl alcohol is the most common), I could turn out 200 gallons of finished hand sanitizer TODAY.

(As an additional concern, the Distilled Spirits Council notes that the extremely bitter or toxic nature of denaturing agents may impose additional costs on distillers given the need to thoroughly cleanse them from their equipment.)

Congress attempted to address these concerns in the CARES Act, the coronavirus relief package. Section 2308 explicitly waives the federal excise tax on distilled spirits used for the production of sanitizer, however it leaves the formula specification in the hands of the FDA. Unless the agency revises its guidance, production in the US will be constrained by the requirement to add denaturing agents to the plentiful supply of ethanol, or distilleries will risk being targeted with enforcement actions if they produce perfectly usable sanitizer without denaturing their alcohol.

Local distilleries provide agile production capacity

In recent days, larger spirits producers including Pernod-Ricard, Diageo, and Bacardi have announced plans to produce sanitizer. Given their resources and economies of scale, they may end up taking over a significant part of the market. Yet small, local distilleries have displayed the agility necessary to rapidly shift production. It’s worth noting that many of these distilleries did not exist until fairly recently. According to the American Craft Spirits Association, there were fewer than 100 craft distilleries operating in the United States in 2005. By 2018, there were more than 1,800. This growth is the result of changing consumer interests, but also the liberalization of state and local laws to permit distilleries and tasting rooms. That many of these distilleries have the capacity to produce sanitizer in a time of emergency is a welcome, if unintended, consequence of this liberalization.

In Amazon, China, COVID-19, Facebook, International, Platforms, Symposia, Taxes, The Law, Economics, and Policy of the COVID-19 Pandemic, Truth on the Market, Twitter , , , , , , ,
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The Third Circuit’s Oberdorf v. Amazon opinion offers a good approach to reining in the worst abuses of Section 230

Gus Hurwitz —  15 July 2019

[Note: A group of 50 academics and 27 organizations, including both myself and ICLE, recently released a statement of principles for lawmakers to consider in discussions of Section 230.]

In a remarkable ruling issued earlier this month, the Third Circuit Court of Appeals held in Oberdorf v. Amazon that, under Pennsylvania products liability law, Amazon could be found liable for a third party vendor’s sale of a defective product via Amazon Marketplace. This ruling comes in the context of Section 230 of the Communications Decency Act, which is broadly understood as immunizing platforms against liability for harmful conduct posted to their platforms by third parties (Section 230 purists may object to myu use of “platform” as approximation for the statute’s term of “interactive computer services”; I address this concern by acknowledging it with this parenthetical). This immunity has long been a bedrock principle of Internet law; it has also long been controversial; and those controversies are very much at the fore of discussion today. 

The response to the opinion has been mixed, to say the least. Eric Goldman, for instance, has asked “are we at the end of online marketplaces?,” suggesting that they “might in the future look like a quaint artifact of the early 21st century.” Kate Klonick, on the other hand, calls the opinion “a brilliant way of both holding tech responsible for harms they perpetuate & making sure we preserve free speech online.”

My own inclination is that both Eric and Kate overstate their respective positions – though neither without reason. The facts of Oberdorf cabin the effects of the holding both to Pennsylvania law and to situations where the platform cannot identify the seller. This suggests that the effects will be relatively limited. 

But, and what I explore in this post, the opinion does elucidate a particular and problematic feature of section 230: that it can be used as a liability shield for harmful conduct. The judges in Oberdorf seem ill-inclined to extend Section 230’s protections to a platform that can easily be used by bad actors as a liability shield. Riffing on this concern, I argue below that Section 230 immunity be proportional to platforms’ ability to reasonably identify speakers using their platforms to engage in harmful speech or conduct.

This idea is developed in more detail in the last section of this post – including responding to the obvious (and overwrought) objections to it. But first it offers some background on Section 230, the Oberdorf and related cases, the Third Circuit’s analysis in Oberdorf, and the recent debates about Section 230. 

Section 230

“Section 230” refers to a portion of the Communications Decency Act that was added to the Communications Act by the 1996 Telecommunications Act, codified at 47 U.S.C. 230. (NB: that’s a sentence that only a communications lawyer could love!) It is widely recognized as – and discussed even by those who disagree with this view as – having been critical to the growth of the modern Internet. As Jeff Kosseff labels it in his recent book, the key provision of section 230 comprises the “26 words that created the Internet.” That section, 230(c)(1), states that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (For those not familiar with it, Kosseff’s book is worth a read – or for the Cliff’s Notes version see here, here, here, here, here, or here.)

Section 230 was enacted to do two things. First, section (c)(1) makes clear that platforms are not liable for user-generated content. In other words, if a user of Facebook, Amazon, the comments section of a Washington Post article, a restaurant review site, a blog that focuses on the knitting of cat-themed sweaters, or any other “interactive computer service,” posts something for which that user may face legal liability, the platform hosting that user’s speech does not face liability for that speech. 

And second, section (c)(2) makes clear that platforms are free to moderate content uploaded by their users, and that they face no liability for doing so. This section was added precisely to repudiate a case that had held that once a platform (in that case, Prodigy) decided to moderate user-generated content, it undertook an obligation to do so. That case meant that platforms faced a Hobson’s choice: either don’t moderate content and don’t risk liability, or moderate all content and face liability for failure to do so well. There was no middle ground: a platform couldn’t say, for instance, “this one post is particularly problematic, so we are going to take it down – but this doesn’t mean that we are going to pervasively moderate content.”

Together, these two provisions stand generally for the proposition that online platforms are not liable for content created by their users, but they are free to moderate that content without facing liability for doing so. It recognized, on the one hand, that it was impractical (i.e., the Internet economy could not function) to require that platforms moderate all user-generated content, so section (c)(1) says that they don’t need to; but, on the other hand, it recognizes that it is desirable for platforms to moderate problematic content to the best of their ability, so section (c)(2) says that they won’t be punished (i.e., lose the immunity granted by section (c)(1) if they voluntarily elect to moderate content). 

Section 230 is written in broad – and has been interpreted by the courts in even broader – terms. Section (c)(1) says that platforms cannot be held liable for the content generated by their users, full stop. The only exceptions are for copyrighted content and content that violates federal criminal law. There is no “unless it is really bad” exception, or a “the platform may be liable if the user-generated content causes significant tangible harm” exception, or an “unless the platform knows about it” exception, or even an “unless the platform makes money off of and actively facilitates harmful content” exception. So long as the content is generated by the user (not by the platform itself), Section 230 shields the platform from liability. 

Oberdorf v. Amazon

This background leads us to the Third Circuit’s opinion in Oberdorf v. Amazon. The opinion is remarkable because it is one of only a few cases in which a court has, despite Section 230, found a platform liable for the conduct of a third party facilitated through the use of that platform. 

Prior to the Third Circuit’s recent opinion, the best known previous case is the 9th Circuit’s Model Mayhem opinion. In that case, the court found that Model Mayhem, a website that helps match models with modeling jobs, had a duty to warn models about individuals who were known to be using the website to find women to sexually assault. 

It is worth spending another moment on the Model Mayhem opinion before returning to the Third Circuit’s Oberdorf opinion. The crux of the 9th Circuit’s opinion in the Model Mayhem case was that the state of Florida (where the assaults occurred) has a duty-to-warn law, which creates a duty between the platform and the user. This duty to warn was triggered by the case-specific fact that the platform had actual knowledge that two of its users were predatorily using the site to find women to assault. Once triggered, this duty to warn exists between the platform and the user. Because the platform faces liability directly for its failure to warn, it is not shielded by section 230 (which only shields the platform from liability for the conduct of the third parties using the platform to engage in harmful conduct). 

In its opinion, the Third Circuit offered a similar analysis – but in a much broader context. 

The Oberdorf case involves a defective dog leash sold to Ms. Oberdorf by a seller doing business as The Furry Gang on Amazon Marketplace. The leash malfunctioned, hitting Ms. Oberdorf in the face and causing permanent blindness in one eye. When she attempted to sue The Furry Gang, she discovered that they were no longer doing business on Amazon Marketplace – and that Amazon did not have sufficient information about their identity for Ms. Oberdorf to bring suit against them.

Undeterred, Ms. Oberdorf sued Amazon under Pennsylvania product liability law, arguing that Amazon was the seller of the defective leash, so was liable for her injuries. Part of Amazon’s defense was that the actual seller, The Furry Gang, was a user of their Marketplace platform – the sale resulted from the storefront generated by The Furry Gang and merely hosted by Amazon Marketplace. Under this theory, Section 230 would bar Amazon from liability for the sale that resulted from the seller’s user-generated storefront. 

The Third Circuit judges had none of that argument. All three judges agreed that under Pennsylvania law, the products liability relationship existed between Ms. Oberdorf and Amazon, so Section 230 did not apply. The two-judge majority found Amazon liable to Ms. Oberford under this law – the dissenting judge would have found Amazon’s conduct insufficient as a basis for liability.

This opinion, in other words, follows in the footsteps of the Ninth Circuit’s Model Mayhem opinion in holding that state law creates a duty directly between the harmed user and the platform, and that that duty isn’t affected by Section 230. But Oberdorf is potentially much broader in impact than Model Mayhem. States are more likely to have broader product liability laws than duty to warn laws. Even more impactful, product liability laws are generally strict liability laws, whereas duty to warn laws are generally triggered by an actual knowledge requirement.

The Third Circuit’s Focus on Agency and Liability Shields

The understanding of Oberdorf described above is that it is the latest in a developing line of cases holding that claims based on state law duties that require platforms to protect users from third party harms can survive Section 230 defenses. 

But there is another, critical, issue in the background of the case that appears to have affected the court’s thinking – and that, I argue, should be a path forward for Section 230. The judges writing for the Third Circuit majority draw attention to

the extensive record evidence that Amazon fails to vet third-party vendors for amenability to legal process. The first factor [of analysis for application of the state’s products liability law] weighs in favor of strict liability not because The Furry Gang cannot be located and/or may be insolvent, but rather because Amazon enables third-party vendors such as The Furry Gang to structure and/or conceal themselves from liability altogether.

This is important for analysis under the Pennsylvania product liability law, which has a marketing chain provision that allows injured consumers to seek redress up the marketing chain if the direct seller of a defective product is insolvent or otherwise unavailable for suit. But the court’s language focuses on Amazon’s design of Marketplace and the ease with which Marketplace can be used by merchants as a liability shield. 

This focus is unsurprising: the law generally does not allow one party to shield another from liability without assuming liability for the shielded party’s conduct. Indeed, this is pretty basic vicarious liability, agency, first-year law school kind of stuff. It is unsurprising that judges would balk at an argument that Amazon could design its platform in a way that makes it impossible for harmed parties to sue a tortfeasor without Amazon in turn assuming liability for any potentially tortious conduct. 

Section 230 is having a bad day

As most who have read this far are almost certainly aware, Section 230 is a big, controversial, political mess right now. Politicians from Josh Hawley to Nancy Pelosi have suggested curtailing Section 230. President Trump just held his “Social Media Summit.” And countries around the world are imposing near-impossible obligations on platforms to remove or otherwise moderate potentially problematic content – obligations that are anathema to Section 230 as they increasingly reflect and influence discussions in the United States. 

To be clear, almost all of the ideas floating around about how to change Section 230 are bad. That is an understatement: they are potentially devastating to the Internet – both to the economic ecosystem and the social ecosystem that have developed and thrived largely because of Section 230.

To be clear, there is also a lot of really, disgustingly, problematic content online – and social media platforms, in particular, have facilitated a great deal of legitimately problematic conduct. But deputizing them to police that conduct and to make real-time decisions about speech that is impossible to evaluate in real time is not a solution to these problems. And to the extent that some platforms may be able to do these things, the novel capabilities of a few platforms to obligations for all would only serve to create entry barriers for smaller platforms and to stifle innovation. 

This is why a group of 50 academics and 27 organizations released a statement of principles last week to inform lawmakers about key considerations to take into account when discussing how Section 230 may be changed. The purpose of these principles is to acknowledge that some change to Section 230 may be appropriate – may even be needed at this juncture – but that such changes should be careful and modest, carefully considered so as to not disrupt the vast benefits for society that Section 230 has made possible and is needed to keep vital.

The Third Circuit offers a Third Way on 230 

The Third Circuit’s opinion offers a modest way that Section 230 could be changed – and, I would say, improved – to address some of the real harms that it enables without undermining the important purposes that it serves. To wit, Section 230’s immunity could be attenuated by an obligation to facilitate the identification of users on that platform, subject to legal process, in proportion to the size and resources available to the platform, the technological feasibility of such identification, the foreseeability of the platform being used to facilitate harmful speech or conduct, and the expected importance (as defined from a First Amendment perspective) of speech on that platform.

In other words, if there are readily available ways to establish some form of identify for users – for instance, by email addresses on widely-used platforms, social media accounts, logs of IP addresses – and there is reason to expect that users of the platform could be subject to suit – for instance, because they’re engaged in commercial activities or the purpose of the platform is to provide a forum for speech that is likely to legally actionable – then the platform needs to be reasonably able to provide reasonable information about speakers subject to legal action in order to avail itself of any Section 230 defense. Stated otherwise, platforms need to be able to reasonably comply with so-called unmasking subpoenas issued in the civil context to the extent such compliance is feasible for the platform’s size, sophistication, resources, &c.

An obligation such as this would have been at best meaningless and at worst devastating at the time Section 230 was adopted. But 25 years later, the Internet is a very different place. Most users have online accounts – email addresses, social media profiles, &c – that can serve as some form of online identification.

More important, we now have evidence of a growing range of harmful conduct and speech that can occur online, and of platforms that use Section 230 as a shield to protect those engaging in such speech or conduct from litigation. Such speakers are clear bad actors who are clearly abusing Section 230 facilitate bad conduct. They should not be able to do so.

Many of the traditional proponents of Section 230 will argue that this idea is a non-starter. Two of the obvious objections are that it would place a disastrous burden on platforms especially start-ups and smaller platforms, and that it would stifle socially valuable anonymous speech. Both are valid concerns, but also accommodated by this proposal.

The concern that modest user-identification requirements would be disastrous to platforms made a great deal of sense in the early years of the Internet, both the law and technology around user identification were less developed. Today, there is a wide-range of low-cost, off-the-shelf, techniques to establish a user’s identity to some level of precision – from logging of IP addresses, to requiring a valid email address to an established provider, registration with an established social media identity, or even SMS-authentication. None of these is perfect; they present a range of cost and sophistication to implement and a range of offer a range of ease of identification.

The proposal offered here is not that platforms be able to identify their speaker – it’s better described as that they not deliberately act as a liability shield. It’s requirement is that platforms implement reasonable identity technology in proportion to their size, sophistication, and the likelihood of harmful speech on their platforms. A small platform for exchanging bread recipes would be fine to maintain a log of usernames and IP addresses. A large, well-resourced, platform hosting commercial activity (such as Amazon Marketplace) may be expected to establish a verified identity for the merchants it hosts. A forum known for hosting hate speech would be expected to have better identification records – it is entirely foreseeable that its users would be subject to legal action. A forum of support groups for marginalized and disadvantaged communities would face a lower obligation than a forum of similar size and sophistication known for hosting legally-actionable speech.

This proportionality approach also addresses the anonymous speech concern. Anonymous speech is often of great social and political value. But anonymity can also be used for, and as made amply clear in contemporary online discussion can bring out the worst of, speech that is socially and politically destructive. Tying Section 230’s immunity to the nature of speech on a platform gives platforms an incentive to moderate speech – to make sure that anonymous speech is used for its good purposes while working to prevent its use for its lesser purposes. This is in line with one of the defining goals of Section 230. 

The challenge, of course, has been how to do this without exposing platforms to potentially crippling liability if they fail to effectively moderate speech. This is why Section 230 took the approach that it did, allowing but not requiring moderation. This proposal’s user-identification requirement shifts that balance from “allowing but not requiring” to “encouraging but not requiring.” Platforms are under no legal obligation to moderate speech, but if they elect not to, they need to make reasonable efforts to ensure that their users engaging in problematic speech can be identified by parties harmed by their speech or conduct. In an era in which sites like 8chan expressly don’t maintain user logs in order to shield themselves from known harmful speech, and Amazon Marketplace allows sellers into the market who cannot be sued by injured consumers, this is a common-sense change to the law.

It would also likely have substantially the same effect as other proposals for Section 230 reform, but without the significant challenges those suggestions face. For instance, Danielle Citron & Ben Wittes have proposed that courts should give substantive meaning to Section 230’s “Good Samaritan” language in section (c)(2)’s subheading, or, in the alternative, that section (c)(1)’s immunity require that platforms “take[] reasonable steps to prevent unlawful uses of its services.” This approach is problematic on both First Amendment and process grounds, because it requires courts to evaluate the substantive content and speech decisions that platforms engage in. It effectively tasks platforms with undertaking the task of the courts in developing a (potentially platform-specific) law of content moderations – and threatens them with a loss of Section 230 immunity is they fail effectively to do so.

By contrast, this proposal would allow, and even encourage, platforms to engage in such moderation, but offers them a gentler, more binary, and procedurally-focused safety valve to maintain their Section 230 immunity. If a user engages in harmful speech or conduct and the platform can assist plaintiffs and courts in bringing legal action against the user in the courts, then the “moderation” process occurs in the courts through ordinary civil litigation. 

To be sure, there are still some uncomfortable and difficult substantive questions – has a platform implemented reasonable identification technologies, is the speech on the platform of the sort that would be viewed as requiring (or otherwise justifying protection of the speaker’s) anonymity, and the like. But these are questions of a type that courts are accustomed to, if somewhat uncomfortable with, addressing. They are, for instance, the sort of issues that courts address in the context of civil unmasking subpoenas.

This distinction is demonstrated in the comparison between Sections 230 and 512. Section 512 is an exception to 230 for copyrighted materials that was put into place by the 1998 Digital Millennium Copyright Act. It takes copyrighted materials outside of the scope of Section 230 and requires platforms to put in place a “notice and takedown” regime in order to be immunized for hosting copyrighted content uploaded by users. This regime has proved controversial, among other reasons, because it effectively requires platforms to act as courts in deciding whether a given piece of content is subject to a valid copyright claim. The Citron/Wittes proposal effectively subjects platforms to a similar requirement in order to maintain Section 230 immunity; the identity-technology proposal, on the other hand, offers an intermediate requirement.

Indeed, the principal effect of this intermediate requirement is to maintain the pre-platform status quo. IRL, if one person says or does something harmful to another person, their recourse is in court. This is true in public and in private; it’s true if the harmful speech occurs on the street, in a store, in a public building, or a private home. If Donny defames Peggy in Hank’s house, Peggy sues Donny in court; she doesn’t sue Hank, and she doesn’t sue Donny in the court of Hank. To the extent that we think of platforms as the fora where people interact online – as the “place” of the Internet – this proposal is intended to ensure that those engaging in harmful speech or conduct online can be hauled into court by the aggrieved parties, and to facilitate the continued development of platforms without disrupting the functioning of this system of adjudication.

Conclusion

Section 230 is, and has long been, the most important and one of the most controversial laws of the Internet. It is increasingly under attack today from a disparate range of voices across the political and geographic spectrum — voices that would overwhelming reject Section 230’s pro-innovation treatment of platforms and in its place attempt to co-opt those platforms as government-compelled (and, therefore, controlled) content moderators. 

In light of these demands, academics and organizations that understand the importance of Section 230, but also recognize the increasing pressures to amend it, have recently released a statement of principles for legislators to consider as they think about changes to Section 230.

Into this fray, the Third Circuit’s opinion in Oberdorf offers a potential change: making Section 230’s immunity for platforms proportional to their ability to reasonably identify speakers that use the platform to engage in harmful speech or conduct. This would restore the status quo ante, under which intermediaries and agents cannot be used as litigation shields without themselves assuming responsibility for any harmful conduct. This shielding effect was not an intended goal of Section 230, and it has been the cause of Section 230’s worst abuses. It was allowed at the time Section 230 was adopted because the used-identity requirements such as proposed here would not have been technologically reasonable at the time Section 230 was adopted. But technology has changed and, today, these requirements would impose only a moderate  burden on platforms today

In Amazon, Antitrust & Competition, Constitutional Law, Copyright, Facebook, Federal Trade Commission, First Amendment, Google, Intellectual Property, Platforms, Regulation, Section 5, Telecommunications, Truth on the Market, Twitter, Tying , , , , , , , ,
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There’s nothing “conservative” about Trump’s views on free speech and the regulation of social media

Ben Sperry —  12 July 2019

Yesterday was President Trump’s big “Social Media Summit” where he got together with a number of right-wing firebrands to decry the power of Big Tech to censor conservatives online. According to the Wall Street Journal: 

Mr. Trump attacked social-media companies he says are trying to silence individuals and groups with right-leaning views, without presenting specific evidence. He said he was directing his administration to “explore all legislative and regulatory solutions to protect free speech and the free speech of all Americans.”

“Big Tech must not censor the voices of the American people,” Mr. Trump told a crowd of more than 100 allies who cheered him on. “This new technology is so important and it has to be used fairly.”

Despite the simplistic narrative tying President Trump’s vision of the world to conservatism, there is nothing conservative about his views on the First Amendment and how it applies to social media companies.

I have noted in several places before that there is a conflict of visions when it comes to whether the First Amendment protects a negative or positive conception of free speech. For those unfamiliar with the distinction: it comes from philosopher Isaiah Berlin, who identified negative liberty as freedom from external interference, and positive liberty as freedom to do something, including having the power and resources necessary to do that thing. Discussions of the First Amendment’s protection of free speech often elide over this distinction.

With respect to speech, the negative conception of liberty recognizes that individual property owners can control what is said on their property, for example. To force property owners to allow speakers/speech on their property that they don’t desire would actually be a violation of their liberty — what the Supreme Court calls “compelled speech.” The First Amendment, consistent with this view, generally protects speech from government interference (with very few, narrow exceptions), while allowing private regulation of speech (again, with very few, narrow exceptions).

Contrary to the original meaning of the First Amendment and the weight of Supreme Court precedent, President Trump’s view of the First Amendment is that it protects a positive conception of liberty — one under which the government, in order to facilitate its conception of “free speech,” has the right and even the duty to impose restrictions on how private actors regulate speech on their property (in this case, social media companies). 

But if Trump’s view were adopted, discretion as to what is necessary to facilitate free speech would be left to future presidents and congresses, undermining the bedrock conservative principle of the Constitution as a shield against government regulation, all falsely in the name of protecting speech. This is counter to the general approach of modern conservatism (but not, of course, necessarily Republicanism) in the United States, including that of many of President Trump’s own judicial and agency appointees. Indeed, it is actually more consistent with the views of modern progressives — especially within the FCC.

For instance, the current conservative bloc on the Supreme Court (over the dissent of the four liberal Justices) recently reaffirmed the view that the First Amendment applies only to state action in Manhattan Community Access Corp. v. Halleck. The opinion, written by Trump-appointee, Justice Brett Kavanaugh, states plainly that:

Ratified in 1791, the First Amendment provides in relevant part that “Congress shall make no law . . . abridging the freedom of speech.” Ratified in 1868, the Fourteenth Amendment makes the First Amendment’s Free Speech Clause applicable against the States: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law . . . .” §1. The text and original meaning of those Amendments, as well as this Court’s longstanding precedents, establish that the Free Speech Clause prohibits only governmental abridgment of speech. The Free Speech Clause does not prohibit private abridgment of speech… In accord with the text and structure of the Constitution, this Court’s state-action doctrine distinguishes the government from individuals and private entities. By enforcing that constitutional boundary between the governmental and the private, the state-action doctrine protects a robust sphere of individual liberty. (Emphasis added).

Former Stanford Law dean and First Amendment scholar, Kathleen Sullivan, has summed up the very different approaches to free speech pursued by conservatives and progressives (insofar as they are represented by the “conservative” and “liberal” blocs on the Supreme Court): 

In the first vision…, free speech rights serve an overarching interest in political equality. Free speech as equality embraces first an antidiscrimination principle: in upholding the speech rights of anarchists, syndicalists, communists, civil rights marchers, Maoist flag burners, and other marginal, dissident, or unorthodox speakers, the Court protects members of ideological minorities who are likely to be the target of the majority’s animus or selective indifference…. By invalidating conditions on speakers’ use of public land, facilities, and funds, a long line of speech cases in the free-speech-as-equality tradition ensures public subvention of speech expressing “the poorly financed causes of little people.” On the equality-based view of free speech, it follows that the well-financed causes of big people (or big corporations) do not merit special judicial protection from political regulation. And because, in this view, the value of equality is prior to the value of speech, politically disadvantaged speech prevails over regulation but regulation promoting political equality prevails over speech.

The second vision of free speech, by contrast, sees free speech as serving the interest of political liberty. On this view…, the First Amendment is a negative check on government tyranny, and treats with skepticism all government efforts at speech suppression that might skew the private ordering of ideas. And on this view, members of the public are trusted to make their own individual evaluations of speech, and government is forbidden to intervene for paternalistic or redistributive reasons. Government intervention might be warranted to correct certain allocative inefficiencies in the way that speech transactions take place, but otherwise, ideas are best left to a freely competitive ideological market.

The outcome of Citizens United is best explained as representing a triumph of the libertarian over the egalitarian vision of free speech. Justice Kennedy’s opinion for the Court, joined by Chief Justice Roberts and Justices Scalia, Thomas, and Alito, articulates a robust vision of free speech as serving political liberty; the dissenting opinion by Justice Stevens, joined by Justices Ginsburg, Breyer, and Sotomayor, sets forth in depth the countervailing egalitarian view. (Emphasis added).

President Trump’s views on the regulation of private speech are alarmingly consistent with those embraced by the Court’s progressives to “protect[] members of ideological minorities who are likely to be the target of the majority’s animus or selective indifference” — exactly the sort of conservative “victimhood” that Trump and his online supporters have somehow concocted to describe themselves. 

Trump’s views are also consistent with those of progressives who, since the Reagan FCC abolished it in 1987, have consistently angled for a resurrection of some form of fairness doctrine, as well as other policies inconsistent with the “free-speech-as-liberty” view. Thus Democratic commissioner Jessica Rosenworcel takes a far more interventionist approach to private speech:

The First Amendment does more than protect the interests of corporations. As courts have long recognized, it is a force to support individual interest in self-expression and the right of the public to receive information and ideas. As Justice Black so eloquently put it, “the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.” Our leased access rules provide opportunity for civic participation. They enhance the marketplace of ideas by increasing the number of speakers and the variety of viewpoints. They help preserve the possibility of a diverse, pluralistic medium—just as Congress called for the Cable Communications Policy Act… The proper inquiry then, is not simply whether corporations providing channel capacity have First Amendment rights, but whether this law abridges expression that the First Amendment was meant to protect. Here, our leased access rules are not content-based and their purpose and effect is to promote free speech. Moreover, they accomplish this in a narrowly-tailored way that does not substantially burden more speech than is necessary to further important interests. In other words, they are not at odds with the First Amendment, but instead help effectuate its purpose for all of us. (Emphasis added).

Consistent with the progressive approach, this leaves discretion in the hands of “experts” (like Rosenworcel) to determine what needs to be done in order to protect the underlying value of free speech in the First Amendment through government regulation, even if it means compelling speech upon private actors. 

Trump’s view of what the First Amendment’s free speech protections entail when it comes to social media companies is inconsistent with the conception of the Constitution-as-guarantor-of-negative-liberty that conservatives have long embraced. 

Of course, this is not merely a “conservative” position; it is fundamental to the longstanding bipartisan approach to free speech generally and to the regulation of online platforms specifically. As a diverse group of 75 scholars and civil society groups (including ICLE) wrote yesterday in their “Principles for Lawmakers on Liability for User-Generated Content Online”:

Principle #2: Any new intermediary liability law must not target constitutionally protected speech.

The government shouldn’t require—or coerce—intermediaries to remove constitutionally protected speech that the government cannot prohibit directly. Such demands violate the First Amendment. Also, imposing broad liability for user speech incentivizes services to err on the side of taking down speech, resulting in overbroad censorship—or even avoid offering speech forums altogether.

As those principles suggest, the sort of platform regulation that Trump, et al. advocate — essentially a “fairness doctrine” for the Internet — is the opposite of free speech:

Principle #4: Section 230 does not, and should not, require “neutrality.”

Publishing third-party content online never can be “neutral.” Indeed, every publication decision will necessarily prioritize some content at the expense of other content. Even an “objective” approach, such as presenting content in reverse chronological order, isn’t neutral because it prioritizes recency over other values. By protecting the prioritization, de-prioritization, and removal of content, Section 230 provides Internet services with the legal certainty they need to do the socially beneficial work of minimizing harmful content.

The idea that social media should be subject to a nondiscrimination requirement — for which President Trump and others like Senator Josh Hawley have been arguing lately — is flatly contrary to Section 230 — as well as to the First Amendment.

Conservatives upset about “social media discrimination” need to think hard about whether they really want to adopt this sort of position out of convenience, when the tradition with which they align rejects it — rightly — in nearly all other venues. Even if you believe that Facebook, Google, and Twitter are trying to make it harder for conservative voices to be heard (despite all evidence to the contrary), it is imprudent to reject constitutional first principles for a temporary policy victory. In fact, there’s nothing at all “conservative” about an abdication of the traditional principle linking freedom to property for the sake of political expediency.

In Amazon, Antitrust & Competition, Constitutional Law, Facebook, First Amendment, Google, Platforms, Regulation, Truth on the Market, Twitter, Tying , , , , , , , , , , , , , ,
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Section 230 principles for lawmakers and a note of caution as Trump convenes his “social media summit”

Geoffrey Manne —  11 July 2019

Neither side in the debate over Section 230 is blameless for the current state of affairs. Reform/repeal proponents have tended to offer ill-considered, irrelevant, or often simply incorrect justifications for amending or tossing Section 230. Meanwhile, many supporters of the law in its current form are reflexively resistant to any change and too quick to dismiss the more reasonable concerns that have been voiced.

Most of all, the urge to politicize this issue — on all sides — stands squarely in the way of any sensible discussion and thus of any sensible reform.

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In Constitutional Law, Facebook, First Amendment, Intellectual Property, Platforms, Regulation, Twitter , , , , , , , , , , ,
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Trade Agreements and Restatements as End Runs Around the Rule of Law

Kristian Stout —  15 February 2018

The Internet is a modern miracle: from providing all varieties of entertainment, to facilitating life-saving technologies, to keeping us connected with distant loved ones, the scope of the Internet’s contribution to our daily lives is hard to overstate. Moving forward there is undoubtedly much more that we can and will do with the Internet, and part of that innovation will, naturally, require a reconsideration of existing laws and how new Internet-enabled modalities fit into them.

But when undertaking such a reconsideration, the goal should not be simply to promote Internet-enabled goods above all else; rather, it should be to examine the law’s effect on the promotion of new technology within the context of other, competing social goods. In short, there are always trade-offs entailed in changing the legal order. As such, efforts to reform, clarify, or otherwise change the law that affects Internet platforms must be balanced against other desirable social goods, not automatically prioritized above them.

Unfortunately — and frequently with the best of intentions — efforts to promote one good thing (for instance, more online services) inadequately take account of the balance of the larger legal realities at stake. And one of the most important legal realities that is too often readily thrown aside in the rush to protect the Internet is that policy be established through public, (relatively) democratically accountable channels.

Trade deals and domestic policy

Recently a letter was sent by a coalition of civil society groups and law professors asking the NAFTA delegation to incorporate U.S.-style intermediary liability immunity into the trade deal. Such a request is notable for its timing in light of the ongoing policy struggles over SESTA —a bill currently working its way through Congress that seeks to curb human trafficking through online platforms — and the risk that domestic platform companies face of losing (at least in part) the immunity provided by Section 230 of the Communications Decency Act. But this NAFTA push is not merely about a tradeoff between less trafficking and more online services, but between promoting policies in a way that protects the rule of law and doing so in a way that undermines the rule of law.

Indeed, the NAFTA effort appears to be aimed at least as much at sidestepping the ongoing congressional fight over platform regulation as it is aimed at exporting U.S. law to our trading partners. Thus, according to EFF, for example, “[NAFTA renegotiation] comes at a time when Section 230 stands under threat in the United States, currently from the SESTA and FOSTA proposals… baking Section 230 into NAFTA may be the best opportunity we have to protect it domestically.”

It may well be that incorporating Section 230 into NAFTA is the “best opportunity” to protect the law as it currently stands from efforts to reform it to address conflicting priorities. But that doesn’t mean it’s a good idea. In fact, whatever one thinks of the merits of SESTA, it is not obviously a good idea to use a trade agreement as a vehicle to override domestic reforms to Section 230 that Congress might implement. Trade agreements can override domestic law, but that is not the reason we engage in trade negotiations.

In fact, other parts of NAFTA remain controversial precisely for their ability to undermine domestic legal norms, in this case in favor of guaranteeing the expectations of foreign investors. EFF itself is deeply skeptical of this “investor-state” dispute process (“ISDS”), noting that “[t]he latest provisions would enable multinational corporations to undermine public interest rules.” The irony here is that ISDS provides a mechanism for overriding domestic policy that is a close analogy for what EFF advocates for in the Section 230/SESTA context.

ISDS allows foreign investors to sue NAFTA signatories in a tribunal when domestic laws of that signatory have harmed investment expectations. The end result is that the signatory could be responsible for paying large sums to litigants, which in turn would serve as a deterrent for the signatory to continue to administer its laws in a similar fashion.

Stated differently, NAFTA currently contains a mechanism that favors one party (foreign investors) in a way that prevents signatory nations from enacting and enforcing laws approved of by democratically elected representatives. EFF and others disapprove of this.

Yet, at the same time, EFF also promotes the idea that NAFTA should contain a provision that favors one party (Internet platforms) in a way that would prevent signatory nations from enacting and enforcing laws like SESTA that (might be) approved of by democratically elected representatives.

A more principled stance would be skeptical of the domestic law override in both contexts.

Restating Copyright or creating copyright policy?

Take another example: Some have suggested that the American Law Institute (“ALI”) is being used to subvert Congressional will. Since 2013, ALI has taken upon itself the project to “restate” the law of copyright. ALI is well known and respected for its common law restatements, but it may be that something more than mere restatement is going on here. As the NY Bar Association recently observed:

The Restatement as currently drafted appears inconsistent with the ALI’s long-standing goal of promoting clarity in the law: indeed, rather than simply clarifying or restating that law, the draft offers commentary and interpretations beyond the current state of the law that appear intended to shape current and future copyright policy.  

It is certainly odd that ALI (or any other group) would seek to restate a body of law that is already stated in the form of an overarching federal statute. The point of a restatement is to gather together the decisions of disparate common law courts interpreting different laws and precedent in order to synthesize a single, coherent framework approximating an overall consensus. If done correctly, a restatement of a federal statute would, theoretically, end up with the exact statute itself along with some commentary about how judicial decisions have filled in the blanks differently — a state of affairs that already exists with the copious academic literature commenting on federal copyright law.

But it seems that merely restating judicial interpretations was not the only objective behind the copyright restatement effort. In a letter to ALI, one of the scholars responsible for the restatement project noted that:

While congressional efforts to improve the Copyright Act… may be a welcome and beneficial development, it will almost certainly be a long and contentious process… Register Pallante… [has] not[ed] generally that “Congress has moved slowly in the copyright space.”

Reform of copyright law, in other words, and not merely restatement of it, was an important impetus for the project. As an attorney for the Copyright Office observed, “[a]lthough presented as a “Restatement” of copyright law, the project would appear to be more accurately characterized as a rewriting of the law.” But “rewriting” is a job for the legislature. And even if Congress moves slowly, or the process is frustrating, the democratic processes that produce the law should still be respected.

Pyrrhic Policy Victories

Attempts to change copyright or entrench liability immunity through any means possible are rational actions at an individual level, but writ large they may undermine the legal fabric of our system and should be resisted.

It’s no surprise why some may be frustrated and concerned about intermediary liability and copyright issues: On the margin, it’s definitely harder to operate an Internet platform if it faces sweeping liability for the actions of third parties (whether for human trafficking or infringing copyrights). Maybe copyright law needs to be reformed and perhaps intermediary liability must be maintained exactly as it is (or expanded). But the right way to arrive at these policy outcomes is not through backdoors — and it is not to begin with the assertion that such outcomes are required.

Congress and the courts can be frustrating vehicles through which to enact public policy, but they have the virtue of being relatively open to public deliberation, and of having procedural constraints that can circumscribe excesses and idiosyncratic follies. We might get bad policy from Congress. We might get bad cases from the courts. But the theory of our system is that, on net, having a frustratingly long, circumscribed, and public process will tend to weed out most of the bad ideas and impulses that would otherwise result from unconstrained decision making, even if well-intentioned.

We should meet efforts like these to end-run Congress and the courts with significant skepticism. Short term policy “victories” are likely not worth the long-run consequences. These are important, complicated issues. If we surreptitiously adopt idiosyncratic solutions to them, we risk undermining the rule of law itself.

In Copyright, Intellectual Property, Platforms, Truth on the Market , , , , , ,
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Eric Goldman on the role and importance of Section 230 immunity

Geoffrey Manne —  27 August 2012

For those who follow these things (and for those who don’t but should!), Eric Goldman just posted an excellent short essay on Section 230 immunity and account terminations.

Here’s the abstract:

An online provider’s termination of a user’s online account can be a major-and potentially even life-changing-event for the user. Account termination exiles the user from a virtual place the user wanted to be; termination disrupts any social network relationship ties in that venue, and prevents the user from sending or receiving messages there; and the user loses any virtual assets in the account, which could be anything from archived emails to accumulated game assets. The effects of account termination are especially acute in virtual worlds, where dedicated users may be spending a majority of their waking hours or have aggregated substantial in-game wealth. However, the problem arises in all online environments (including email, social networking and web hosting) where account termination disrupts investments made by users.

Because of the potentially significant consequences from online user account termination, user-rights advocates, especially in the virtual world context, have sought legal restrictions on online providers’ discretion to terminate users. However, these efforts are largely misdirected because of 47 U.S.C. §230(c)(2) (“Section 230(c)(2)”), a federal statutory immunity. This essay, written in conjunction with an April 2011 symposium at UC Irvine entitled “Governing the Magic Circle: Regulation of Virtual Worlds,” explains Section 230(c)(2)’s role in immunizing online providers’ decisions to terminate user accounts. It also explains why this immunity is sound policy.

But the meat of the essay (at least the normative part of the essay) is this:

Online user communities inevitably require at least some provider intervention. At times, users need “protection” from other users. The provider can give users self-help tools to reduce their reliance on the online provider’s intervention, but technological tools cannot ameliorate all community-damaging conduct by determined users. Eventually, the online provider needs to curb a rogue user’s behavior to protect the rest of the community. Alternatively, a provider may need to respond to users who are jeopardizing the site’s security or technical infrastructure. . . .  Section 230(c)(2) provides substantial legal certainty to online providers who police their premises and ensure the community’s stability when intervention is necessary.

* * *

Thus, marketplace incentives work unexpectedly well to discipline online providers from capriciously wielding their termination power. This is true even if many users face substantial nonrecoupable or switching costs, both financially and in terms of their social networks. Some users, both existing and prospective, can be swayed by the online provider’s capriciousness—and by the provider’s willingness to oust problem users who are disrupting the community. The online provider’s desire to keep these swayable users often can provide enough financial incentives for the online provider to make good choices.

Thus, broadly conceived, § 230(c)(2) removes legal regulation of an online provider’s account termination, making the marketplace the main governance mechanism over an online provider’s choices. Fortunately, the marketplace is effective enough to discipline those choices.

Eric doesn’t talk explicitly here about property rights and transaction costs, but that’s what he’s talking about.  Well-worth reading as a short, clear, informative introduction to this extremely important topic.

In Constitutional Law, Platforms, Telecommunications , , , , , , ,
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