The ongoing Oracle v. Google case is headed to the Supreme Court, and we submitted an amicus brief in support of Oracle today. As a recap — Oracle sued Google in 2010, accusing the tech giant of copying over 11000 lines of code from Oracle’s Java programming language application programming interface (API). Google deployed the code in Android, now the most popular mobile operating system in...
Creators have an uphill battle in enforcing their rights online. A small claims court to allow creators to exercise their rights without full federal litigation is a good goal, and one that should be pursued. The Copyright Alternative in Small-Claims Enforcement Act of 2019, also known as the CASE Act, presents one potential, but flawed framework for such a court. It is not, however, the only potential framework. A robust, well-designed system would be designed to balance the interests of legitimate claimants and defendants against those of bad actors seeking to turn the forum into a quick cash grab. Below, we look at the key features of such a system, and why they’re important.
Opt-in participation.
A truly voluntary system requires opt-in from all participants.
The practical difference between opt-out and opt-in is what happens to those individuals who fail to respond to the notice; under opt-out, they are subject to the CASE Act’s tribunal (the Copyright Claims Board), while under opt-in, they are not. It’s those people that we should worry about. First, if the policy goal is to subject as many people as possible to the CCB’s jurisdiction, then the correct route is to make a court under Article III of the Constitution -- namely, to make it a regular federal court. An Article III court doesn’t require consent to exercise jurisdiction. This would avoid the sticky situation of trying to split the difference as a quasi-voluntary arbitration system. Second, opt-out catches people who may have failed to respond for any number of reasons that don’t themselves justify $30,000 in potential liability.
Most importantly, the CASE Act specifies that, by failing to opt out, the respondent waives their right to a jury trial in federal court. That’s both practically and Constitutionally suspect. An opt-in system would remedy that, allowing for full and meaningful consent from all parties.
Damages of up to $5,000 per infringement, $10,000 per case, with limits on how frequently those caps are adjusted. Streamlined process available for micro-claims under $1,000.
Most small claims courts cap out at $9,000 total per case. A $10k cap would be above the national average and would be high enough to deal with the actual damages (such as lost licensing fees) involved in most small claims.
For reasons that no one can quite articulate, the CASE Act allows for damages of up to $15,000 per infringement, and $30,000 per case. That’s more than half the take-home pay for the average American household, and the entire pre-tax income of more than a quarter of Americans. Importantly, there doesn’t appear to be any actual data backing up these numbers. The only source seems to be a 2013 Copyright Office study, which plucked $15,000 as the average among industry proposals (which are themselves almost entirely speculative).
Meanwhile, CASE treats anything under $5,000 as a “micro-claim” that is exempt from the bare minimum due process requirements outlined in the bill. There’s no articulated reason for this separate threshold, but to the extent that any claims are truly “micro,” that threshold should be much lower -- under $1,000.
To the extent that lawmakers want the damages to be adjustable going forward, they can do that responsibly in a variety of different ways. One method would be to subject the entire Board to periodic Congressional reauthorization, which would allow legislators to determine the appropriate damage threshold. Another would be to use the model currently in the CASE Act (allow the Register to adjust the damages through notice-and-rulemaking) and set a schedule and maximum rate increase for adjustments.
Right now, CASE allows the Register of Copyrights the ability to unilaterally increase the claims threshold at any time, to any amount, via public rulemaking. Damage caps of $30k in 2019 could, without any Congressional input, double by 2021.
Judgments and settlements both require approval conditioned on finalized registration.
Ideally, a small claims structure would comply with the Supreme Court’s ruling in Fourth Estate, which requires that a work be fully registered before a rightsholder can bring an action in federal court. That’s a tough ask, for a number of reasons; rightsholders have pointed out that long wait times at the Copyright Office can create prejudicial delays. While this is true, the solution to that is to fund and modernize the Copyright Office (a proposal that everyone -- from small artists to major industries to consumer groups to tech companies -- can support), not to undercut the Supreme Court in a small claims bill that will (presumably) outlast the problems at the Office.
However, putting that aside, there are ways that a small claims system can provide relief while respecting Supreme Court precedent. The CASE Act requires that final judgments issue only after the registration has been completed. That’s a good start, but it misses a key element: Parties can settle at any time, and that settlement pressure is going to be the primary goal of a bad faith actor. Couple this with the fact that registration for certain kinds of works (such as compilations) is notoriously finicky and hard to obtain, and you have a very easy route for a bad actor to steamroll a defendant to settle before the Copyright Office rejects their registration as bogus.
The least intrusive fix for this problem is to require that the CCB approve proposed settlements after the registration has been issued -- or, at an even barer minimum, approve them conditioned on the subsequent approval of the registration. (And, in the meantime, join forces with folks across the copyright debate spectrum to push for increased funding and modernization of the Office.)
Provide a broad right of appeal to federal courts.
Any small claims court whose mandate includes resolving circuit splits on caselaw (a task otherwise reserved for the Supreme Court of the United States) and assessing five-figure damages must have a meaningful right of appeal to the federal court system. Simply put, the stakes for getting it wrong -- in either direction -- are too high to leave the system without meaningful accountability.
In short, it is entirely possible to design a system which gives artists the tools to execute their legal rights, without inviting abuse or creating Constitutional concerns. We urge Congress to revisit the CASE Act with a critical eye, and make it better -- and more useful -- for everyone involved.
Image credit: ccPixs.com
Last week, all four major broadcasters (ABC, NBC, CBS, and Fox) filed a copyright suit against Locast, a nonprofit organization that helps users watch free broadcast television over the internet. Only available in certain regions across the country, Locast receives free over-the-air broadcast signal in those regions and allows users to stream it without needing to worry about good antenna reception at their home. This unfortunate legal challenge to Locast is just the latest example of media companies inappropriately trotting out copyright claims to control otherwise free content. In this case, all it does is hurt viewers who are unable to access the free content through traditional means.
The best way to understand the history of this approach is through the lense of Aereo, a similar service that was sued out of existence in 2014. Broadcast is free to anyone with an antenna, so Aereo allowed users to rent an antenna and a DVR in Aereo’s warehouse, which got better broadcast reception than many homes. Users could then record and stream broadcast content over the internet. Broadcasters sued Aereo, that the service violated their copyrights. As Public Knowledge’s John Bergmayer noted at the time of the Aereo lawsuit, it doesn’t make any more sense for Aereo to be violating copyright by renting out antennas than it does for Radio Shack to be in violation for selling those antennas out of its storefront.
However, legally, these disputes all hinge on the rather confusing and arcane language of the Copyright Act. According to Section 111, “secondary transmission to the public of a performance” is infringement of the broadcaster’s copyright. Aereo’s defense, in which Public Knowledge filed multiple amici curiae briefs, was that it was not transmitting a performance to the public. Since each user of their service had their own antenna, each user independently received the performance. The internet link to the antenna was merely a conduit for their private performance, and private performance does not violate Section 111 (which is why you can’t be sued for having your friends over on Game Day).
While the Court relied on somewhat strange logic to rule narrowly for the broadcasters in that case, the current lawsuit against Locast has even less merit. This is because Section 111 creates an explicit exemption from the retransmission rules for nonprofits that don’t charge, or that only charge an amount necessary to cover their costs. Locast, a not-for-profit service created by the Sports Fans Coalition, seems to exactly fit that definition. They ask for a $5 per month donation, but have no mandatory fees.
At this point, readers might be wondering exactly why broadcasters care so much about this. After all, broadcast television, like radio, has always been free to anyone with the equipment to receive it (this is why before the cable industry, broadcast traditionally relied on ad revenue). By making this programming available for free to sports fans within the original broadcast footprint who don’t have good antenna reception, Locast is increasing the number of eyeballs watching. So long as the broadcasters have access to that viewership data, it should be a relationship that can benefit everyone involved. It makes even less sense to attack a nonprofit for this behavior than it did a company like Aereo, especially considering the degree to which the Section 111 exemption weakens their case.
The broadcasters, for their part, claim that these services hurt their bargaining position when they go to haggle with cable companies over retransmission costs and carriage of local channels. However, Sherwin Siy put his finger on another reason for their objections back in the Aereo days. There is good reason to believe these has less to do with commitment to copyright enforcement or their negotiations with cable networks and more to do with control of content distribution.
In the case of Locast, this is a particularly unnecessary and unfortunate reaction. Locast is a nonprofit entity, not a rival company. Its service, designed to bring this programming to viewers for free, is completely in keeping with the original spirit of broadcast television; allowing the public to benefit from quality programming. Broadcasters should be able to benefit from that wider audience, including having access to data tracking viewership numbers in order to support their advertising model.
Networks should embrace innovative new ways for their content to make it to otherwise unreached audiences, but they have proven just as hostile to Locast as they did to Aereo. Hopefully this time the courts, at least, will side with viewers.
Disclosure: Public Knowledge Policy Director Phillip Berenbroick serves on the Board of the nonprofit Sports Fan Coalition of New York, which runs Locast. Public Knowledge President and CEO Chris Lewis and Berenbroick serve on the board of the separate nonprofit, Sports Fan Coalition, as well.
Today, the Department of Justice announced it will conduct a review of competition in digital platforms. Public Knowledge welcomes this announcement and urges the DOJ to thoroughly examine the persistence of market power and the lack of significant new entrants into digital platform markets.
The following can be attributed to Charlotte Slaiman, Competiton Policy Counsel at Public Knowledge:
“For months, we’ve been warning the public about the problems of persistent market power in digital platforms. Today, the DOJ announced it will finally open a wide-ranging review of this problem. We believe this review is needed, and urge the DOJ to invest seriously in getting this right, and rooting out any anticompetitive conduct that may have occurred or still be occurring. The problem of concentration in digital platforms impacts huge swaths of our economy, our democracy, and our lives.
“Of course, this does not diminish the need for the legislative process moving forward in Congress. These processes are complementary and can help ensure greater public understanding of these important market forces in our lives, as well as improve the law to more fully address these problems.”
There’s nothing wrong with saying that you “own” data. Public Knowledge has supported data ownership as a colloquialism that reflects an intuition: Data about us provides information regarding the intimacies of our very identity and existence. Speaking in this way, we should certainly “own” or have control over that data to protect our fundamental right to privacy.
But it’s a different matter to say that the law should treat data as a property, as a thing to be owned, in the same sense as a car, a bag of chips, or copyright. Such a data ownership regime is not practicable, and would not protect individual privacy as effectively as any number of other approaches.
The idea of data ownership is not new, but it has recently seen some airtime in the debate around federal privacy legislation. On Capitol Hill, senators have expressed interest in data ownership as a way to give individuals control over their personal data and for them to be compensated for commercial uses of that data. This conception of data ownership is not a figure of speech where “ownership” is used to express the principle of user control. Rather, the issue here is an individual’s right to literally own personal data in the same way that an individual can own other forms of personal property. While ownership is an increasingly foreign concept in the world of consumer goods where you are much more likely to license the thing you “buy” from a vendor, many commercial data practices already exchange data as if it were some kind of personal property.
Treating data as "property" in the legal sense raises some puzzling questions. For example, you might not want Facebook to use certain data it knows about you in various ways, and a property right in that data might be a way to accomplish this. But what if your spouse knows the same things about you? And what if he or she tells your mother-in-law? Is that trespassing? And can you use the traditional tools of property rights enforcement to put a stop to it? Does it infringe on your property rights for third parties to learn something about you by happenstance, or as a result of your interactions with them, or is it just the use of data about you that you are concerned with?
It is the nature of property rights that they apply against everyone. If there is some right you want that applies to entities like Facebook or AT&T, but not to your cousin or anyone else, it's not "property" as traditionally understood. Property is widely understood to be an exclusive right given to individuals against everyone, not one that conditionally applies sometimes against some other parties but not other times and not against everyone. (That's not to say that a property owner can't choose who to give permission to, and under what circumstances.) The actual goals of most privacy advocates and ordinary people who want greater privacy protections have little to do with the legal rights and tools that “property” systems provide.
The purpose of this blog post is to illustrate in more depth a few reasons why it is problematic to use data ownership as the foundation of a comprehensive federal privacy legislation. To the extent that data ownership even addresses the privacy problem -- a tenuous connection -- data ownership should not be grounded in copyright law, and new (sui generis) data ownership rights are likely to create a practical and legal mess that will not meaningfully protect consumer privacy. Privacy is a basic consumer protection issue best resolved through comprehensive federal privacy legislation. To achieve the worthy goal of data sharing to promote competition or scientific research, lawmakers should instead look at imposing data portability and interoperability mandates on certain online platforms to give users true choice and control over what to do with their data.
What Is Personal Data Anyway?[1]
Before we dive in, it might be useful to think about what types of data exist. Or, to put it another way, if we had the right(s) to own our own data, what would we own? In his book, “The Data Revolution,” Rob Kitchin notes that data can be broadly categorized as representative data (like a person’s name and age), implied data (data that exists in the absence of other data), and derived data (such as data that is created through artificial intelligence or other algorithm-driven processing). These are important distinctions because personal privacy in the online world is threatened by a host of data processing activities that are driven by automated decision making, most of which takes place “behind the scenes” of the user experience.
While personal data will typically fall into the category of representative, implied and derived data provides economically valuable information about a person, often at the expense of individual privacy, and it certainly should fall within the scope of personal data. It’s important to note that any data that is related to individuals and groups will reflect our inherently flawed human behavior, including biases and conflicting norms. We’re seeing this play out with artificial intelligence (AI), where predictive analytics has generated outcomes that are biased against marginalized and minority communities.
Further, personal data has some important characteristics that impact potential ownership frameworks. First, unlike physical goods, data is non-rivalrous, meaning that more than one entity can possess the same data at the same time. Second, it is generally non-excludable, meaning that it is easily shared, so restrictions and limitations on sharing must be imposed to avoid widespread dissemination of data. This is particularly relevant with digital data on the internet. Third, data can be reproduced with often negligible or zero marginal cost, meaning it’s usually very cheap to create copies of data.
What Does This Have to Do With Privacy?
Proponents of data ownership argue that property rights in personal information allow consumers to retain control over how information about them is used because negotiating such rights through private contracts could (in theory) allow an individual to limit corporate (and government) uses of personal data. They also argue that contracting could facilitate compensation arrangements under which consumers may sell or lease their data for commercial uses, instead of the current system where you receive ad-supported services in exchange for use of your data.
This overlooks the fact that the asymmetric information and power imbalances that plague the current data ecosystem would persist under a data ownership regime. Individuals would not have the information to understand what they are selling, or the bargaining power to get a fair price. Aside from the means of compensation, it’s hard to see how this is any different from the current failed “notice and choice” privacy regime. Consumers are already faced with the impossible task of reading and understanding countless privacy policies (read: contracts) that outline the scope of how their information is used by the companies that profit off of data, many of which we don’t have any direct contact with. Note that individuals have zero leverage to negotiate these privacy policies and terms of use. Would this change under a data ownership regime? More on this later…but the short answer is, almost certainly, no.
If the goal of data ownership is simply to get paid in money for your data rather than with a service, this looks a lot more like some kind of federal statutory personality or publicity right -- a mechanism whereby you may monetize your identity -- than a privacy right. Discussing the merits of creating a federal right of publicity, for example through the Lanham Act, which governs trademark protection, is outside the scope of this post. In general, however, Congress should not be creating incentives for individuals to accept payment in exchange for signing over their personal data, which could include incredibly privacy-invasive information (such as biometric, health, and precise geolocation data) as well as seemingly non-sensitive information that could be used by trained algorithms to infer intimate information. Such arrangements could lead to disparate impacts affecting members of low-income and other marginalized communities who might not be so privileged to sell or lease their data sparingly. We can be confident that pay-for-surveillance will be popular among data-hungry businesses. Companies have been more than happy to pay users, including teens, to collect data on them, and they have the leverage to change the terms of the contracts at their whim, almost always to the detriment of users.
Keep Copyright Law out of This
Copyright law often gets implicated in discussions surrounding data ownership, typically because creative works share the non-rivalrous and non-excludable characteristics of data. But even if personal data was covered under copyright (which it is not), the policy goals of copyright differ from those of privacy in important ways, making copyright the wrong approach to a privacy law based on data ownership.
To be clear, you likely do not, and definitely should not, have ownership in your personal data under copyright law. Under the Copyright Act, copyright protection exists, “in original works of authorship fixed in any tangible medium of expression,” but, “in no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery.” Common sense tells us that facts about a person in the form of data points are not original works of authorship, and indeed it’s well-settled as a matter of law that facts are in the public domain.
Note also that copyright protection doesn’t extend to procedures, processes, or systems. But what about the implied or derived data that is created by those systems? Even assuming that the algorithm or AI can be an author, a dubious proposition to say the least, is the data or data set that is created sufficiently original to receive copyright protection? Courts that have grappled with these or similar questions have held that data created by committee or machine is not eligible for copyright protection. This is how it should be. In no way should the law be changed to take facts out of the public domain, even if those facts are generated by AI. A robust public domain is critical to provide raw materials for the creation of new knowledge and to fulfill the constitutional purpose of copyright, “to promote the progress of science and useful arts.”
Despite the shared characteristics of data and creative works as outlined above, the policy goal of copyright is to incentivize artists and creators to create new works and to give them control over the commercialization of their work. Contrast this goal with that of privacy, which is to protect individual privacy rights from the panoply of harms that arise through unauthorized uses of personal information. The goal is not to incentivize the creation of more data, it is to protect an individual’s privacy interests in their personal data that already exists or could be created through implication or inference later. This fundamental distinction makes copyright the wrong regime for privacy protection.
A New Personal Data Property Right Would Do Little (If Anything) to Change the Status Quo
A personal data economy already operates in which data is treated in a manner similar to personal property like tradable financial assets. In an article published last year in the Boston College Law Review, Professor Stacy-Ann Elvy illustrated how both privacy policies and financial frameworks like Article 9 of the Uniform Commercial Code and the Bankruptcy Code commodify consumer data with detrimental effects. For example, an Internet of Things (IoT) device company that collects a vast trove of biometric and precise location data from its customers can use such a database as collateral to finance its operations, and in the event of a default, a lender can generally do what it wants with that database to satisfy the debtor’s obligations. Such aggregate data is valuable on the secondary market and could readily find its way into the hands of bad actors like predatory lenders or stalkers. It might also be used to train AI to identify new members of a group based on seemingly unrelated information. Even if the data is de-identified, such data (including metadata) may be re-identified.
This personal data economy could be organized around data ownership. While property rights in personal data don’t exist under U.S. law, lawmakers have the power to create them from whole cloth. In fact, the European Union’s General Data Protection Regulation and the California Consumer Privacy Act provide a right to data portability, which operates as a quasi-ownership right. Despite this, a number reasons cut against adopting data ownership to protect user privacy.
First, data ownership presents thorny questions of law, not the least of which is determining questions of ownership -- particularly when multiple potential authors are implicated. Take, for example, biometric data related to a person who has had reconstructive surgery on his face. If a company seeks to purchase this data for AI training on facial recognition, who owns the data? Is the doctor a co-owner? When Cambridge Analytica created psychographic profiles of users, would they have partial ownership over those profiles? How does the ownership get divvied up? Questions of ownership are complex and highly contentious in all areas of the law, but if you need a related example, look no further than copyright law where the issue has been highly litigated. Any such issues in a data ownership regime would be significantly amplified in our connected world of IoT where over 2.5 quintillion bytes of data are generated each day.
Second, the information and transaction costs involved in administering the data ownership economy would be staggering. Imagine having to negotiate individual agreements for every exchange of data that affects you online. Do I have to obtain a license from an athlete to use his homerun and batting average statistics in my fantasy baseball league? How could I be expected to oversee every microtransaction that involves my data? And how could I ensure that further transactions weren’t taking place among third, fourth, and nth parties? This is where the non-rivalrous and non-excludable characteristics of data really rears its ugly head. It’s an unworkable situation that borders on the comical when we fold in the reality of multiple data owners described above.
More importantly, these negotiations would often entail the same significant information asymmetries and power imbalances that leave consumers with no choice but to “consent” to the sharing of their data in our current online ecosystem. The data ownership contracts would probably look a lot like this license “agreement” that Amazon’s Ring doorbell users enter into, signing away the copyright they have in their images:
You hereby grant Ring and its licensees an unlimited, irrevocable, fully paid and royalty-free, perpetual, worldwide right to re-use, distribute, store, delete, translate, copy, modify, display, sell, create derivative works from and otherwise exploit such Shared Content for any purpose and in any media formats in any media channels without compensation to you. You shall not use [...]
Further, the actual value of data is an open question, and determining such value (or getting such value wrong) for purposes of negotiation imposes costs on the contracting parties. Care must be taken when addressing questions of data valuation because it risks transforming privacy, a human rights issue, into an economic exercise. Senators Mark Warner and Josh Hawley have recently introduced the DASHBOARD Act, which requires commercial data operators to file an annual report on the aggregate value of user data that they have collected. Such transparency reporting requirements can be helpful for consumers and regulators to better understand the value proposition that data operators offer to their users, but it should not be used to justify a data ownership regime, or its mirror image: A pay-for-privacy regime.
Data is important and can be used in myriad ways that benefit society and the public interest. To achieve the worthy goal of data sharing to promote competition or scientific research, data portability and interoperability mandates on certain online platforms is the best policy solution. Such mandates must, however, be integrated into a robust, consumer protection privacy regime starting with comprehensive federal privacy legislation.
[1] The author is aware that “data” is a plural noun, but he just can’t use it that way—just can’t. Apologies to the grammar purists.
Today, the Federal Communications Commission published its 2019 Broadband Deployment Report, claiming that “the nation’s digital divide is narrowing.” Public Knowledge contends that this finding rings hollow with unserved and underserved Americans.
The following may be attributed to Alisa Valentin, Communications Justice Fellow at Public Knowledge:
“The FCC has yet again given themselves a pat on the back for ‘narrowly closing’ the digital divide in the 2019 broadband deployment report all while millions of Americans are still unserved and underserved.
“The FCC issued this report despite flawed self-reported data that drastically overestimated which communities are connected to this essential service. If we fail to accurately identify who has access to broadband in America, we will fail to find proper policy solutions for closing the digital divide. This lackadaisical approach to understanding the breadth of the digital divide will result in widening disparities in education, healthcare, and economic opportunity. This is a complete disservice to communities of color, rural communities, and low-income communities who can’t afford to be left behind in the digital age; our country deserves more.
“This is about accountability. If the FCC truly wants to avoid ‘waste, fraud, and abuse’ then the Broadband Deployment Report should serve as the premier data source for understanding what consumers are unserved and underserved. The Commission is in dire need of an overhaul of Form 477, which is the data used as the primary basis for the Broadband Deployment Report. The agency itself admits that the form isn’t perfect but chooses to address how to improve data collection at a later date.
“In order to understand the digital divide, consumers need access to accurate pricing data and information about actual eeds and not just advertised speeds. Without these reforms, we will be here next year looking at yet another questionable report.”
This morning, Reuters reported that the career attorneys at the Department of Justice Antitrust Division have recommended the agency file a lawsuit to block the proposed T-Mobile/Sprint merger. This reporting follows Monday’s announcement by Federal Communications Commission Chairman Ajit Pai that he would recommend the FCC approve the deal. State Attorneys General and the California Public Utilities Commission also continue to review the transaction. Public Knowledge opposes the transaction as a member of the 4Competition Coalition, filed a Petition to Deny with the FCC, and testified against the deal on Capitol Hill.
The following can be attributed to Phillip Berenbroick, Senior Policy Counsel at Public Knowledge:
“If accurate, this morning’s report that the expert antitrust attorneys at the Department of Justice have recommended that DOJ file a lawsuit to block the T-Mobile/Sprint transaction is a welcome sign for wireless consumers. The public record is clear that permitting T-Mobile to acquire Sprint will harm consumers and substantially reduce competition and innovation in the wireless market. This transaction is not even a close call under the DOJ’s prior precedents and Section 7 of the Sherman Act, and the Department of Justice should file suit to block the deal.
“Earlier this week, the FCC announced it was likely to approve the transaction with mild conditions. As we noted, Chairman Pai’s statement endorsing the merger omitted any reference to competition issues or the DOJ’s ongoing review. The standards of review for mergers under the antitrust laws and the Communications Act are very different, but the FCC traditionally incorporates competition analysis into its merger review. However, the FCC’s proposed behavioral conditions do nothing to remedy the dramatic harms to consumers and competition that would result from allowing the wireless market to consolidate down to only three nationwide carriers.
“The wireless market is already ‘highly concentrated’ under the DOJ’s Horizontal Merger Guidelines, and the transaction would cause such significant additional concentration that the merger was presumptively illegal when filed. A combined T-Mobile/Sprint would have enhanced market power to raise prices, leaving retail consumers to pay higher prices and have fewer choices in the marketplace. These higher prices would fall especially hard on low-income and prepaid customers who are least likely to be able to afford to pay higher prices and most likely to rely entirely on their mobile subscription for internet access.
“Further, the transaction will also harm competition in the wireless market, likely impeding the ability of smaller and rural telecommunications providers to serve their customers and increasing the barriers to new market entry. These harms would leave consumers paying higher prices and with less access to wireless service, particularly in rural areas.
“In 2011, the DOJ rightly concluded that allowing further consolidation in the wireless market would mean ‘customers of mobile wireless telecommunications services likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger.’ The DOJ’s analysis was correct then, and continues to be true today.”
Today, Judge Lucy Koh of the Northern District Court of California ruled that Qualcomm’s patent licensing practices violate the Federal Trade Commission Act.
The following can be attributed to John Bergmayer, Senior Counsel at Public Knowledge:
“We congratulate the FTC on this important victory. Judge Koh's ruling shows that the FTC has the ability to bring, and win, important cases that protect American consumers.
“This case underscores the importance of standards-setting to promoting innovation. Qualcomm has created many important wireless technologies that are a key part of smartphones. But Qualcomm's technologies were only included in industry standards because it agreed to license its patents on fair, reasonable, and non-discriminatory (FRAND) terms. Inclusion in mandatory standards is what gives those technologies commercial value in the first place.
“This important ruling, among other things, holds Qualcomm to its FRAND commitments. Companies who contribute their technologies to standards are entitled to fair compensation but cannot be allowed to use their patents--which the entire industry, because of standards, must use--for anticompetitive ends. Standards-setting bodies and IP rights cannot be used as an end run around competition law.
“The FTC should continue to ensure that companies with bottleneck control of key technologies do not act in ways that reduce competition and raise consumer prices.”
For more information, you can our recent blog post, “FTC Should Continue to Fight for Lower Consumer Prices in Qualcomm Lawsuit,” and our letter to the International Trade Commission.
The previous post was about what Section 230 of the Communications Decency Act does, and why it does it. One theme is that Section 230 is a very broad and powerful statute. But the law can change, and given that digital platforms have a very different role in society and the economy now than they did in 1996, when the law was passed, maybe it should. This post will list some proposals that I am not necessarily endorsing, but which may be worth considering. But before that, it’s also important to realize that Section 230 has limits even under the law today.
The limits of 230
However broad Section 230 may be, it does not shield platforms from liability connected with third-party content in every circumstance, nor does it preempt all state and local regulation for platforms. There are cases where platforms may be held liable in connection with third-party content, but these are best understood as outside the scope of 230, not true “exceptions” to it. But understanding the outer bounds of 230’s scope is important, because it points to areas where amending 230 is not necessary for those who want to hold platforms more legally accountable -- and those areas where it might be.
When the platform actually does help “develop” third-party content
Fair Housing Council of San Fernando Valley v. Roommates.com is the clearest example of a case where a platform can be held liable because, upon a closer analysis, the platform and not just the user “developed” the content in question. In that case, Roommates.com offered a service for people to advertise housing, but the posting form required that users provide information about gender, family status, and sexual orientation. Housing ads with that kind of information break the law, and in this case, it’s not merely the poster who might violate the law -- the service itself does. The court reasoned,
[T]he part of the profile that is alleged to offend the Fair Housing Act and state housing discrimination laws — the information about sex, family status and sexual orientation — is provided by subscribers in response to Roommate’s questions, which they cannot refuse to answer if they want to use defendant’s services. By requiring subscribers to provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information.
Thus, Section 230 did not shield Roommates.com from liability. While platforms have broad discretion (as publishers) to edit and moderate content after it has been submitted (whether before or after it is actually publicly posted), at least when they are intimately involved in the initial creation of the material, they become liable for it in the same sense as their own blog posts or corporate communications. Recent charges against Facebook that allege that it engaged in unlawful behavior by furnishing tools to advertisers that allow discriminatory ad targeting follow in this path.
Legal obligations that affect third-party content but are still consistent with 230
Another case that shows the limits of 230 is Barnes v. Yahoo. In that case, Yahoo promised to take down damaging materials from its service -- but then didn’t. Clearly, removing posted material is an editorial function -- but Section 230 does not permit a platform to enter a contract to do something, and then not do it. The court noted that very vague promises, or “a general monitoring policy, or even an attempt to help a particular person,” would not suffice to potentially hold a platform liable -- but this is generally true in contract law as well. The takeaway is simply that a lawsuit for a breach of contract is not precluded by Section 230.
A more recent case involves a Santa Monica regulation concerning online rental platforms like AirBnB. (This case is currently being appealed, so its holding could be reversed.) Such platforms do not merely allow people to advertise spaces available for rent, they allow users to complete bookings. To be consistent with Section 230, Santa Monica enacted a law making it unlawful to complete bookings for unlicensed rental units -- but not for the rentals to be listed to begin with. The Ninth Circuit held that this was permissible. AirBnB argued -- reasonably, it should be noted -- that a law that prevented it from completing certain transactions would have the practical effect of causing it to take down listings it could not complete. AirBnB further argued that this meant that the law in effect sought to regulate it as a publisher. But the court held Section 230 does not shield platforms from liability that might have an effect on how it moderates content, as long as the law doesn’t regulate that function directly. If AirBnB violated this law, it would be liable as a payment processor and booker, not as a publisher. In fact, the court noted that AirBnB could have chosen to just leave unbookable listings up, and simply refuse to complete them. While this would be contrary to AirBnB’s specific business model, the Santa Monica regulation would seem to have no effect on an online classified service that allowed users to advertise rentals, but that did not offer to complete financial transactions.
Critics of the AirBnB decision argue, for policy reasons, that legal rules that make online platform business models potentially unworkable undermine at least the spirit of 230. But at the same time, Section 230 is not intended to shield online services from all local and state regulation -- just those laws that directly address liability as a speaker or publisher. Figuring out exactly where to draw the line between the regulation of a platform’s business activities and its functions as a publisher is tricky and fact-specific. But, assuming the 9th Circuit decision stands, the regulation of transactions rather than content may be one approach.
Potential new obligations for platforms that would likely require statutory change
Because Section 230 is not an unlimited shield against the regulation of online platforms, local, state, and federal policymakers should not simply assume that new requirements require amending 230. At the same time, some policies will require legislatively amending or superceding Section 230. As Harold Feld recently wrote in his book, “The Case for the Digital Platform Act,”
Congress should decide what content regulation regime we need…[it] would then simply add at the beginning of the statute the following introductory words: “Without regard to Section 230 . . .”
In other words, I recommend that we stop arguing about Section 230 and figure out what sort of content moderation regime works. Once Congress resolves this issue, Section 230 will no longer pose a significant obstacle. In the meantime, however, Section 230 should remain in place to preserve certainty until a new regime is ready.
Certainly Public Knowledge has criticized policies and proposals to change 230 in the past, since some of the proposals for changing standards for intermediary liability are simply bad ideas, if well-intentioned. Requiring by law that platforms take down amorphous categories of speech such as “hate speech” are likely unconstitutional, regardless of their merits otherwise. Laws that limit safe harbors for some kinds of speech but not others likely are, too. In general, proposals that give platforms broad new responsibilities over speech could backfire, creating harms greater than the ones they were intended to solve, or creating tools (e.g., takedown notices) that, if structured incorrectly, could be weaponized by bad actors.
One example of an ill-advised change to Section 230 was SESTA/FOSTA. This law was well-intentioned and aimed to stop online sex trafficking. However, it enacted an ambiguous “knowledge” standard that has led some platforms to take down whole categories of otherwise-lawful content and could even have harmed the very constituency it was designed to help. Future policy efforts should avoid this shortcoming by delineating more precisely what a platform’s responsibilities should be, instead of merely referencing common law concepts that have not been developed as applied to online platforms. And policymakers should remember that when it comes to choosing between over-protecting themselves from legal liability, and promoting free speech and marginalized voices, platforms will choose to avoid potential liability every time.
For these reasons, changes to Section 230, or new laws that go into effect “notwithstanding” Section 230, should be approached cautiously. But it would be reckless, as well as politically untenable, to maintain that Section 230’s broad sweep should remain in effect, unchanged. The problems of online harassment and abuse, misinformation, fraud, hate speech, and even election manipulation probably can be addressed -- not necessarily through laws that mandate specific content moderation policies, but through changing platforms’ incentives and addressing aspects of their business models.
To that end, this post will briefly list a few of the ideas that are in the air. I don’t mean to be vague -- but they are simply legal concepts that I have discussed with other advocates, lawyers, and so on, that are all preliminary concepts that may be good or bad ideas, but seem like they 1) require new federal legislation to overcome Section 230, and 2) are not facially unconstitutional or likely to lead to overbroad content takedowns. To the extent these concepts reference “greater” liability, this term includes both publisher liability (which, for some purposes, treats the publisher the same as a speaker) and distributor liability (which requires that the distributor have knowledge of the material it’s distributing in order to incur potential liability).
One idea is greater accountability for some monetized content. Many platforms don’t merely host content, they encourage particular kinds of content by paying posters a revenue share. For example, it has been estimated that one popular YouTuber, Machelle Hobson (referred to in some stories as Machelle Hackney), was paid “between $8,900 and $142,000 a month, and $106,800 to $1.7 million a year” by YouTube for her channel, Fantastic Adventures. But she made the videos by exploiting and abusing her children, and has since been “arrested and charged with child abuse, molestation, child neglect, and unlawful imprisonment of her seven children.” Broadly speaking, paying a revenue share to third-party content providers does not affect a platform’s eligibility for Section 230 protection. After all, such a financial arrangement is a typical publisher function, and this sort of financial support is not the same thing as helping “develop” content. That said, the structure of online platforms, and the facts of what content gets recommended and what doesn’t, directly impacts what content gets created. Financial incentives amplify this. For major business relationships, the various policy justifications for Section 230 -- that it allows internet platforms to host third-party content without incurring potential enormous liability or having to pre-screen everything before it is posted, that it allows online platforms to act as vehicles for free speech, and so on -- seem besides the point. A change in liability for paid-for, monetized content would not incentivize YouTube to make it more difficult for users to post their noncommerical videos, or even videos that are sponsored, but outside the platform’s system (for example, posting a podcast with its existing host-read ads is not “monetized” content from the platform’s perspective). But if YouTube was liable as a distributor for content posted by business partners it pays hundreds of thousands of dollars to, it might have the incentive to figure out just who it is doing business with, and prevent situations like Fantastic Adventures from happening to begin with. To prevent such a liability system from shutting off platforms as an entry point for small creators where individualized investigation and vetting is not practical, enhanced responsibilities could only kick in at certain monetary or popularity thresholds (e.g., $3K/month, which would put a YouTuber into the highest tier of earners). The general idea behind a reform such as this would be both to recognize the value of platforms as a way for creators to support themselves, and that platforms themselves do not play a passive role in popularizing and supporting content.
A similar concept would be to impose greater liability on platforms for ads they run, even when those ads are provided by a third party. The online ad marketplace is very complex and confusing, and often websites -- due to the technology they employ -- have no way to know exactly what ads their users are seeing. Online ads are frequently fraudulent, misleading, or even vectors for malware. A change in liability standards could force the ad tech and online publishing industries to adopt technologies that give them more control and oversight of the ads they run.
As discussed in the previous post, when platforms recommend or promote content to users, either via human editors or algorithmically, they are protected from liability by Section 230 the same as for content that was uploaded by a user and never reviewed by a single employee of the platform. Yet, when platforms amplify content, instead of merely hosting it, the harm that damaging content can do is increased. Creating a duty of care for such promoted content could create an incentive for platforms to more carefully examine content before they promote it, but without requiring that they pre-screen content before merely hosting it. This could, in turn, limit the reach of extremist content and misinformation, among other things. While shielding platforms from liability for content developed by third parties has a number of legitimate justifications, the rationale for shielding them from liability when they actively amplify such content seems weaker. A policy change such as this would fit in with the current focus on algorithmic accountability. However, it may be difficult to draw the line between merely hosting content, and promoting it, and it would be necessary to consider numerous use cases beforehand.
A common recommendation with respect to content issues is a notice-and-takedown system of some kind. While the details of the copyright notice-and-takedown system are often criticized by those who think it is too burdensome for rightsholders, platforms, or users, the broad idea still seems quite sound -- a platform has a safe harbor for hosting content, but then is somehow notified of its contents, at which time it can either take down the content to maintain its safe harbor, or choose to keep it up and face potential liability. Potential liability does not mean actual liability, it should be stressed -- the content in question may be completely legitimate, countervailing factors may counsel keeping it up, or the takedown notice may have simply been erroneous. Some system along these lines may be considered for tortious material -- e.g. material that has been properly adjudicated to be libelous, or material that constitutes a clear invasion of privacy, such as revenge porn. Without going into all the details of where such a system could go awry, it is worth noting that any proposed new notice-and-takedown system should have a way to avoid, or deal with, the various failure modes that have been observed in similar systems that have already been enacted. These include both abusive or meritless takedown notices intended to curb speech, the incentive of a platform to take down content without considering the legitimacy of the request, and the “whack-a-mole” problem, where content that has been taken down is immediately re-posted. For example, sending fraudulent or meritless notices should carry severe consequences, and the precise scope of a platform’s duty to limit material being re-posted should be spelled out, in technical detail, in advance. A notice-and-takedown system would be hard to get right, but it remains a viable option for dealing with certain categories of content.
The Roommates.com case as well as the recent regulatory actions against Facebook have shown that housing discrimination remains a substantial social problem. Other forms of discriminatory advertising, such as for employment, can be equally damaging. For those companies that create tools or platforms specifically tailored to advertisements and postings, Section 230 could be conditioned on their exercising due care to prevent their tools from being used for discriminatory purposes. While Section 230 itself already does not foreclose many important forms of civil rights enforcement, it may make sense to more specifically clarify an online platform’s responsibilities. To avoid the ambiguities and potential for over-moderation present with SESTA/FOSTA, it is important to avoid ambiguous standards, and the best approach may be to specifically delineate a platform’s responsibilities, including which platforms are covered. While no one expects platforms to somehow prevent its users from sometimes acting in discriminatory ways, this proposal could help ensure they take extra care to avoid building tools to facilitate or amplify discrimination.
As mentioned in the earlier post, claims that argue that an online platform is a defective product or improperly designed in some way, and to hold it liable on that account, are typically barred by Section 230, because the specific way the platform is said to be “defective” typically relates to its functions as a publisher. (This is not always the case, however.) But there is a difference between the fact that a platform may be misused by a malicious actor in one instance, and a platform whose basic design encourages or facilitates abuse. We don’t create broad exemptions to product liability laws just because some products can be misused -- instead, the law has developed ways to dispense with frivolous claims other than creating categorical immunities. For example, you can’t sue the manufacturer of the Louisville Slugger baseball bat because its bat was used in an assault, but it would not be immune from suit if it sold a batch of defective bats that splintered during normal use. Similarly, it may make sense to allow defective product lawsuits to proceed against platforms if they show a pattern of harms, and fail to implement industry-standard safety, privacy, and other measures.
Other design-related responsibilities for platforms could include a greater degree of compliance with accessibility laws, including with respect to third-party content. Incentivizing or requiring that platforms -- at least major ones -- be designed in a safe manner, and be accessible to persons with disabilities, places no greater burden on them than what other kinds of businesses and services must face.
A different approach for different kinds of platforms
Finally, any potential changes or exceptions to Section 230 should take into account the different kinds of platforms that exist today -- some of which don’t do anything that looks like “publishing” or “distributing” content in the traditional sense at all. For example, certain platforms that provide basic infrastructure, such as internet access providers, shouldn’t be in the business of moderating content at all. This is why Public Knowledge has fought for such a long time for net neutrality. Arguably, other infrastructure-type services, such as caching and DNS providers, shouldn’t be in the business of moderating and reviewing content -- or subject to liability for it. While it would be a stretch to say that all of these kinds of services should be common carriers (as ISPs should be), at a minimum, it should be recognized that their role and responsibilities are very different from that of public-facing social media companies and other platforms. It is appropriate to recognize that their responsibilities under a given duty of care may be different, or to apply a different duty of care to them entirely. As an example, while it may be appropriate for a social media platform or a message board to refuse to host certain content or viewpoints, should the power company, the post office, or a broadband ISP also be able to refuse service to someone with repugnant, but constitutionally-protected views?
Similarly, some kinds of platforms host content that is not itself objectionable, but is somehow related to it. It is best to consider these situations ahead of time, rather than allowing ambiguities in new policies to give rise to unintended consequences. Two examples are app stores, and links from search engines and social media.
Apple’s app store might host a newspaper app, but it has no way to control what the newspaper actually publishes. It might host the app for a social network or user-generated content service available for download, but has no ability to moderate what gets posted on those services. GitHub might host a software project that is itself lawful, but can be misused. For that matter, a web browser can be use to access websites of all kinds, including ones that might host tortious or unlawful content. In cases like this it would appear to place the burden in the wrong place to hold the software distributor or browser creator liable, instead of the actual platform, site, or service in question.
Similarly, search engines and social media sites link out to content, but do not actually host it. On the one hand, attaching liability to linking seems to place a burden on the wrong party. The EU’s recent Copyright Directive, for example, has the potential to hamper internet openness without clear benefit. On the other hand, objectionable content is often spread or amplified because it is linked to from major services, and would be ignored otherwise. But while companies like Facebook or Google might have the ability to monitor their services for outgoing links to problematic content, companies like DuckDuckGo, non-commercial Mastodon instances, or even personal websites could be subject to the same rules. While it may make sense to subject dominant app stores or other internet services to some heightened standard of care even with respect to content they do not specifically host, their responsibilities should be clear and unambiguous, and likely should not apply to internet services more broadly. If anything, the case of social networks, search engines, app stores, and other digital-native services shows that analogies to the analog world, such as “publication” and “distribution” quickly break down.
***
In the first post in this series I attempted to describe what Section 230 does, and why it was enacted. In this post, in addition to describing 230’s outer bounds, I’ve attempted to show that while 230 serves the valuable role of ensuring that platforms can moderate content without incurring excessive liability or facing other counterproductive inventives, the policy of broad, nearly-inviolable immunity from any liability arising from third-party content is not sacred, and there are various options out there for reasonable reforms. While it is premature to endorse any one of them, reasonable reforms would seek to change the incentives of platforms to host, promote, and popularize problematic content, but would not dictate to platforms which forms of speech are acceptable, and which are not. Any reform has downsides that should be considered, and any increased liability would lead to litigation and periods of uncertainty. However, if changes are enacted carefully, the core speech-enabling functions of Section 230, which enable ordinary users to make their voices heard, can be preserved. 230-related policy changes are hardly the only sorts of legal reforms that may be necessary for platforms -- I have argued that users of major platforms deserve due process rights, for instance, and Harold Feld just wrote an entire book about the need for a new Digital Platform Act. In addition to regulation and legal reforms, strong antitrust action may be needed to curb the power of digital monopolies. That said, the law and policy surrounding Section 230, and what the duties of platforms with respect to third-party content, is a constant thread connecting many areas of internet policy.
Today, Federal Communications Commission Chairman Ajit Pai released a statement announcing his support of the proposed T-Mobile/Sprint merger with modest conditions. The proposed merger is still pending approval by the full FCC as well as the Department of Justice, state Attorneys General, and the California Public Utilities Commission. Public Knowledge opposes the transaction as a member of the 4Competition Coalition, filed a Petition to Deny with the FCC, and testified against the deal on Capitol Hill.
The following can be attributed to Phillip Berenbroick, Senior Policy Counsel at Public Knowledge:
“Since the proposed T-Mobile/Sprint combination was announced more than a year ago, it has been clear that additional consolidation of the mobile broadband market would harm consumers and significantly reduce competition and innovation. The commitments announced today by T-Mobile/Sprint and Chairman Pai do nothing to resolve these harms. It is astonishing that a Commission with such a deregulatory bent would embrace such a regulatory approach, as a means of allowing a competition-destroying merger to go through. Even with the conditions announced today, the merger continues to be illegal under the antitrust laws and contrary to the public interest. The full Federal Communications Commission should reject Chairman Pai’s recommendation.
“It should be noted that past merger approvals from this Commission majority, such as the Level 3/CenturyLink transaction, relied heavily on antitrust and competition analysis from the DOJ. It is unclear why the Chairman has issued his statement without referencing the DOJ’s ongoing work on this matter. In any event, expert antitrust enforcers at the Department of Justice and in the offices of state Attorneys General should continue their work to examine the transaction, and ultimately, should move to block the deal.
“Even with Chairman Pai’s recommended conditions, the combination of T-Mobile and Sprint will still result in substantial price increases for wireless consumers. The evidence T-Mobile and Sprint have submitted into the FCC’s public record demonstrates that permitting the companies to merge will result in substantially higher prices for wireless customers. These higher prices will fall especially hard on low-income and prepaid customers who are least likely to be able to afford to pay higher prices and most likely to rely entirely on their mobile subscription for internet access.
“Chairman Pai’s decision to use merger conditions to regulate the prices that T-Mobile and Sprint may charge consumers is both a departure from the Chairman’s oft-stated opposition to FCC rate regulation of broadband providers, as well as insufficient to actually prevent T-Mobile and Sprint from using their enhanced market power to extract higher fees from consumers. Chairman Pai’s’ rate regulation condition is a sham. It will still allow the combined firm to charge consumers higher prices by increasing fees and surcharges, or by merely eliminating its legacy rate plans entirely and replacing them with more expensive plans offering more data. Further, Chairman Pai’s rate regulation condition is limited to only three years. Consolidating the wireless market from four nationwide competitors down to three nationwide competitors will lead to enhanced market power for the remaining carriers, leading to higher prices for all wireless subscribers both during the first three years, and long after.
“Divesting Boost Mobile, Sprint’s prepaid brand, will do nothing to benefit prepaid customers. Boost is currently just another brand name for a service that uses Sprint’s network on the back end. No matter how many virtual operators like Boost resell and repackage service from AT&T, Verizon, T-Mobile, and Sprint, the fundamental competitive bottleneck of the major carriers remains. While virtual operators serve a valuable role, the major carriers are not going to allow themselves to be out-competed and undercut by their customers. The transaction dramatically concentrates the wireless wholesale market that all MVNOs, including a divested Boost, must purchase access from. Further, Lifeline MVNOs that service approximately 70 percent of Lifeline subscribers will also be forced to purchase wholesale access in this more concentrated wholesale marketplace. As a result, low-income and prepaid consumers who have turned to lower cost MVNOs will likely be forced to pay higher prices post-merger as a combined T-Mobile/Sprint exercise their market power to raise wholesale prices.
“Nothing about this transaction changes the fundamental economics of providing wireless service to rural areas, and the record shows that T-Mobile/Sprint’s claims about rural broadband deployment and 5G are illusory, not merger specific, and unverifiable under traditional antitrust analysis. Competition, not consolidation, gives carriers the incentive to upgrade their networks, and when deployed, 5G will primarily benefit dense, urban areas, leaving rural areas behind. Relying on the ‘commitments’ of carriers to compete and build out their networks while removing their economic incentive for actually doing so is a recipe for disappointment.”
Today, the Federal Communications Commission published a draft Order in the “Advanced Methods to Target and Eliminate Unlawful Robocalls” proceeding. On June 6, the agency will vote on a Declaratory Ruling and Third Further Notice of Proposed Rulemaking from this proceeding to enable carriers to block robocalls. As currently written, the FCC’s draft Order could culminate in carriers charging consumers for call-blocking services that may or may not work as intended, whether consumers want the service or not.
The following can be attributed to Harold Feld, Senior Vice President of Public Knowledge:
“The big question here is who pays for this, and how much? This is particularly important on an opt-out plan, given that the Commission has given the carriers enormous discretion in how to contact customers and the general difficulties customers have in figuring out their bills. Given that customers will also have no idea how effective this will be, there need to be some safeguards here.
“For example, let's say a carrier charges $10 a month for the new service. The subscriber has no way to know how good the service is and so can't make any determination about whether it's worth it. Indeed, if the service works poorly, it may end up blocking calls the subscriber wants and letting robocalls through. But whatever happens, the subscriber is automatically on the hook for $10 per month until they find out they are even enrolled in this new program.
“At a minimum, carriers that use opt-out should be required to offer the service free for some trial period. Even better would be a free trial period followed by a need to opt-in for a paid service. This is a common business model for apps and subscription services, so consumers are quite used to it by now. This would also give the carrier incentive to make a real effort to contact the consumer, rather than hide the ball as a line charge somewhere on the bill.”
Today, the White House launched a tool to enable digital platform users to report alleged instances of bias on technology platforms like Facebook and Twitter.
The following can be attributed to John Bergmayer, Senior Counsel at Public Knowledge:
"Platforms should treat their users fairly and respect norms of due process. But online services have no obligation to provide a platform for content that violates their terms of service; in fact, a more pressing problem than alleged 'censorship' of any particular viewpoint is the proliferation of misinformation, propaganda, hate speech, terrorist content, and harassment online. This misguided effort by the White House raises serious constitutional questions and could hamper the ability of platforms to moderate their platforms and take down such content.
“To the extent that particular constituencies feel that their viewpoints do not get a fair hearing, we would welcome efforts from the Trump Administration to increase platform competition through the vigorous application of antitrust laws, interoperability initiatives, and similar endeavors.”
For more information on content moderation, view Senior Vice President Harold Feld’s latest book, “The Case for the Digital Platform Act.” For more information on due process, view our latest white paper, “Even Under Kind Masters: A Proposal to Require that Dominant Platforms Accord Their Users Due Process.”
Section 230 of the Communications Decency Act immunizes internet platforms from any liability as a publisher or speaker for third-party content -- and is one of the most important and wide-reaching laws that affect the internet. With the increased attention on online platforms in the past few years, it has become one of the most controversial. It’s also widely misunderstood, or misconstrued, both by its supporters and detractors. Much of the discourse around this law has focused on two extremes -- on the one hand, from those who want to defend it at any cost and view it as a general charter against platform regulation, and on the other hand, from those who simply want to repeal it without realizing what the consequences of this could be. At the same time, both the press and politicians tend to either overstate or misunderstand what 230 does.
To be clear, Public Knowledge believes that simply repealing Section 230 would be a mistake. Harold Feld’s recent book explains this (among many other things). At the same time, internet platforms should not be exempt from the kinds of obligations that other kinds of businesses must meet, and Public Knowledge supports greater oversight and regulation of online platforms generally. Section 230 as it stands today is not sacrosanct, and new legislation that changes the obligations of platforms is likely necessary. A follow-up post to this one will explain what those changes might look like.
But before we get there, this post will explain what 230 does, why it was enacted, and why its wholesale repeal would likely be counter to the aims of those who view 230 as an obstacle to greater tech accountability.
Reading the Statute Helps: What Section 230 Says
The most relevant part of Section 230 is subsection (c), which states:
(c) Protection for “Good Samaritan” blocking and screening of offensive material
(1) Treatment of publisher or speaker
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.
(2) Civil liability
No provider or user of an interactive computer service shall be held liable on account of -
(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or
(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).
The definition of “information content provider” is also relevant: “Any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”
Subsection (1) immunizes internet platforms from any liability as a publisher or speaker for third-party content. (A platform can still be held liable for its own content, of course. So, for example, the Wall Street Journal could be liable for one of its own articles online, but not for the comment section.)
It seems pretty simple to understand what it means that a platform cannot be treated as a “speaker” of third-party content -- it’s that you can’t simply put the platform “in the shoes” of the speaker, just because it hosts and disseminates potentially tortious material. It also means that a platform cannot be held liable in its role as a publisher, either under theories that hold publishers liable as speakers, or for the exercise of editorial discretion.
But it is worth exploring what it means that a platform can’t be held liable as a publisher, since publishers have an editorial and expressive role in disseminating content originally written by others -- they are not merely transmitters. Section 230 protects platforms from liability as publishers -- but it still allows them to act as publishers. As the 4th Circuit Court of Appeals said in an early case applying Section 230, “lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions — such as deciding whether to publish, withdraw, postpone or alter content — are barred.” A publisher’s role also includes reviewing content, and deciding which content to highlight. This means that a platform is still protected from liability for the contents of user-submitted material, even if it chooses to highlight and promote that material, or even use it in online advertisements. As the 9th Circuit held, “proliferation and dissemination of content does not equal creation or development of content.”
It often surprises people that Section 230 permits a platform to alter user-posted content without incurring liability for it. But this simply means that a platform, after content is posted, can correct the spelling of a post, replace swear words with asterisks, and even delete a problematic paragraph. Of course “edits” can at some point cross the line into the development of new content -- for example if a platform adds libelous material of its own to a user’s post. But editing is not authorship. As long as the underlying “material” or “information” was created or developed and then “provided” (read the statute again) by a third party, Section 230 shields the platform.
In light of current debates over the role of major online platforms, one of the most important and basic things to understand about Section 230 is that it authorizes platforms to exercise editorial discretion with respect to third-party content without losing the benefit of the law, and that this includes promoting a political, moral, or social viewpoint. (Even one you don’t like.) This is what the plain text, the legislative history, and the leading cases all say. A pro-Trump messageboard is still covered by Section 230 if it deletes all anti-Trump posts, and if Twitter or Facebook chose tomorrow to ban all conservatives, or all socialists, Section 230 would still apply. Whether this is good policy or good politics is a different discussion. But this is the law.
Because Section 230 is so broad, the fact is that platforms usually win cases that seek to find clever ways to hold them liable for publisher-type functions. So, for example, in the recent Herrick v. Grindr case, an attempt to argue that Grindr was liable for furnishing a defective product failed, because the specific way that Grindr was alleged to be defective related to its editorial functions as a publisher. (Again, this is a comment on the law as it stands, not a perspective on what the law should be.) Even courts lack the power to order platforms to take down content that has been found to be defamatory, because, as one court found, an “action to force a website to remove content on the sole basis that the content is defamatory is necessarily treating the website as a publisher, and is therefore inconsistent with section 230.” Again, whether a legal shield of such strength makes sense from a policy perspective is an interesting question, but the baseline for any such discussion has to be an accurate understanding what the law actually says today.
Subsection (2) protects online platforms from liability arising from content moderation decisions, even if that liability has nothing to do with “publishing” or “speaking,” provided that the moderation decisions were undertaken in good faith. It also applies to a platform restricting access to its own content, not just third-party content. As for “good faith” -- first, it’s important to understand that neither this nor anything in subsection (2) is a condition on subsection (1). A platform’s immunity from treatment as a publisher or speaker of third-party content is unconditional. Rather, subsection (2) protects platforms from things such as claims from people who are upset that their content was removed from a platform, who might be able to frame their complaint as a non-speech tort. Perhaps a platform could be liable for restricting access to material if it could be shown that it did so maliciously in some way, and outside of any conceivable role as a publisher. For example, this subsection would likely not shield a platform from civil antitrust claims, or from a breach of contract argument arising from its terms of service, as these claims would presumably involve bad faith. However a platform exercising extreme editorial discretion (for example, by deliberately censoring vegans or climate change activists because it doesn’t like them) would still be protected -- ”good faith” does not imply “good judgment.”
A 2009 case from the 9th Circuit explains the different roles of these different sections well:
Subsection (c)(1), by itself, shields from liability all publication decisions, whether to edit, to remove, or to post, with respect to content generated entirely by third parties. Subsection (c)(2), for its part, provides an additional shield from liability, but only for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider … considers to be obscene… or otherwise objectionable.” Crucially, the persons who can take advantage of this liability are not merely those whom subsection (c)(1) already protects, but any provider of an interactive computer service. Thus, even those who cannot take advantage of subsection (c)(1), perhaps because they developed, even in part, the content at issue… can take advantage of subsection (c)(2) if they act to restrict access to the content because they consider it obscene or otherwise objectionable. Additionally, subsection (c)(2) also protects internet service providers from liability not for publishing or speaking, but rather for actions taken to restrict access to obscene or otherwise objectionable content.
One final point. Section 230 has some pretty clear carve-outs for intellectual property law, and for federal criminal law. This means that an online platform can be held liable for copyright infringement for material posted by users (the DMCA, not 230 controls this), and that it can be found guilty of criminal law, even in its role as a publisher. Additionally, FOSTA-SESTA puts further conditions on the applicability of 230, and platforms very much are legally required to remove child pornography. However these exceptions are less important to the present discussion than the limits of 230, which will be discussed below.
The Legal Background and Its Connection to 230
Most people reading this probably understand that it is possible to get sued for things you say. The protections of the First Amendment are quite broad, but someone who commits libel, invasion of privacy, intentional infliction of emotional distress, or some other tort -- using words alone -- can still be required to pay damages in court. The First Amendment puts quite a few guard rails on claims of this sort, which means that, for example, defamation law works differently in the United States than in some other common law countries. But even in the U.S. people can still be held to account for damage they do with words, just like they can be held to account for damage they do with a baseball bat.
Companies can be liable for these torts, as well. The easiest case is when a publisher is publishing its own employee’s words. There, the publisher is simply seen as the speaker. Similarly, when employees commit torts in the scope of their employment, the employer is responsible under the doctrine of vicarious liability.
The harder question is when a publisher is publishing some other person’s words. In some cases, the publisher does not have any particular duty to verify the accuracy of what it publishes, so it’s hard to hold it liable. For instance, with respect to a book that allegedly contained erroneous and dangerous information about mushroom identification, the 9th Circuit held,
In order for negligence to be actionable, there must be a legal duty to exercise due care. The plaintiffs urge this court that the publisher had a duty to investigate the accuracy of The Encyclopedia of Mushrooms’ contents. We conclude that the defendants have no duty to investigate the accuracy of the contents of the books it publishes…. [T]here is nothing inherent in the role of publisher or the surrounding legal doctrines to suggest that such a duty should be imposed on publishers. Indeed the cases uniformly refuse to impose such a duty. Were we tempted to create this duty, the gentle tug of the First Amendment and the values embodied therein would remind us of the social costs.
This is pertinent to online platforms because the dissemination of false and damaging information is an issue of increasing relevance. But in other situations, such as libel, the law is that publishers are liable for anything they publish, even if the actual speaker is not an employee or agent of the publisher. (If you really want to get technical, you can crack open the Restatement (2d) of Torts I’m sure you have handy, and note that defamation is defined as a publisher offense [§ 558], but that that “Any act by which the defamatory matter is intentionally or negligently communicated to a third person is a publication” [§ 577]. So there is no difference between handing your weekly column off to the newspaper and the newspaper publishing it, as far as liability goes, and in case you were wondering, simply republishing counts, too [§ 578].)
But there is still a great deal of nuance here. Just because the same legal standard applies to both the publisher and the speaker, does not entail that any time the actual speaker commits libel, the publisher automatically does, as well. In Gertz v. Robert Welch, the Supreme Court held that under the First Amendment, there cannot be strict liability defamation offenses -- the defendant must act with some kind of culpable state of mind, or mens rea. That is, the accused defamer must act negligently, or recklessly, or knowingly -- something of that sort. It varies by state. The exact same false and damaging statement may be libel if the defendant writes it recklessly, but not if the defendant writes it legitimately, and for a good reason, while thinking it is true. Because the mens rea requirement must be applied for each defendant, it would still be necessary to separately establish a mens rea for a publisher defendant -- you can’t simply impute the original writer’s state of mind to the publisher. In practice this might not be difficult, for example if the requisite state of mind is relatively easy to prove, such as negligence. But it is worth remembering that it might be possible in some circumstance to prove the mens rea for the publisher, but not the writer, or vice versa. (Of course a platform or a corporation does not actually have a state of mind to begin with. The law has ways of dealing with that.) Naturally, in the case of a newspaper publishing its own employees, the publisher is liable. But this is because employers in general are responsible for their employees, under the doctrine of vicarious liability. But courts have typically declined to find vicarious liability just because some sort of relationship exists between a publisher and a writer -- the relationship must be much closer.
I’m going into all of this because it matters a great deal to an analysis of Section 230. By saying that a platform cannot be held liable as a speaker, 230 says that you cannot put the platform “in the shoes” of a user, such that if the user commits libel, the platform necessarily does, as well. Gertz’s requirement that speech torts must have some level of associated mens rea also implies that strict liability of platforms for user-posted content would be unconstitutional. It is necessary to establish some kind of standard of care for the platform specifically, that relates to its own specific responsibilities regarding the dissemination of content.
Why 230 Was Enacted–And Why It Should Not Be Simply Repealed
Section 230 was enacted for a pretty straightforward reason: Early caselaw about the liability of online platforms was a mess. The two most notable cases, and the standards of liability they announced, will be discussed below.
Cubby v. CompuServe and Distributor Liability
One case, Cubby v. CompuServe, held that online platforms were not publishers of content, but distributors. It is worth digressing on that point for a moment.
Traditionally, distributors of speech, such as bookstores, are only liable for that speech if they know or have reason to know its contents. So, if the possession or distribution of obscene material is unlawful (as it was in Los Angeles in the 1950s) you can’t hold a bookstore liable for merely having this material on its shelves. In Smith v. California, when this came before the Supreme Court, the Court found that prosecutors needed to show that the bookstore knew it had obscene material on its shelves. In a passage worth quoting, the Court explaining why this is, distinguishing this case from the sale of unsafe food (where the seller can be “strictly” liable -- that is, even if it is unaware of the problem):
There is no specific constitutional inhibition against making the distributors of food the strictest censors of their merchandise, but the constitutional guarantees of the freedom of speech and of the press stand in the way of imposing a similar requirement on the bookseller.... For if the bookseller is criminally liable without knowledge of the contents, and the ordinance fulfills its purpose, he will tend to restrict the books he sells to those he has inspected; and thus the State will have imposed a restriction upon the distribution of constitutionally protected as well as obscene literature…. “Every bookseller would be placed under an obligation to make himself aware of the contents of every book in his shop. It would be altogether unreasonable to demand so near an approach to omniscience.” And the bookseller’s burden would become the public’s burden, for by restricting him the public’s access to reading matter would be restricted… The bookseller’s self-censorship, compelled by the State, would be a censorship affecting the whole public, hardly less virulent for being privately administered.
Though obscenity and bookstores were at issue in that case, the articulation of distributor liability is broadly applicable. And it was applied in Cubby. The District Court for the Southern District of New York found that distributor liability was most appropriate. After citing some of the passage above from Smith, it found that “Technology is rapidly transforming the information industry. A computerized database is the functional equivalent of a more traditional news vendor, and the inconsistent application of a lower standard of liability to an electronic news distributor such as CompuServe than that which is applied to a public library, book store, or newsstand would impose an undue burden on the free flow of information.” Finally, because the plaintiffs against CompuServe did not allege that it had knowledge of the actual contents of the material it was suing over, the court ruled in CompuServe’s favor.
Distributor liability seems like it may have been a reasonable standard to apply to online platforms -- the open question being when, exactly, should a platform “have reason to know” about the contents it carries. Could a platform just refuse to do any moderation or review of posted materials and claim 230(c)(1) -- like immunity under this standard? Or would courts have imposed some common law duty to monitor? It’s an interesting speculative exercise, but it’s merely speculative, because first another case, and then Congress and Section 230 intervened.
Stratton Oakmont v. Prodigy and Publisher Liability
The other most notable case involving platform liability for third-party content was Stratton Oakmont, Inc. v. Prodigy Services. In that case, a New York appellate court observed that Prodigy did engage in some moderation of posted materials, and that in its marketing, it “held itself out as an online service that exercised editorial control over the content of messages posted on its computer bulletin boards, thereby expressly differentiating itself from its competition and expressly likening itself to a newspaper.” The court even quoted Prodigy as stating, “We make no apology for pursuing a value system that reflects the culture of the millions of American families we aspire to serve. Certainly no responsible newspaper does less when it chooses the type of advertising it publishes, the letters it prints, the degree of nudity and unsupported gossip its editors tolerate.” With these facts, the court held that Prodigy was liable for third-party materials, not as a distributor, but as a publisher.
A Paradox for Platforms
Taken together, these cases seemed to set up an unfortunate dilemma for online service providers. If they simply operated as unmoderated platforms, they would likely face relatively little liability as distributors. But, if they moderated their platforms -- even just by removing abusive comments, pornography, or even pirated software -- a court could potentially find that this transformed them into publishers. Thus the state of the law created a disincentive against moderation and seemed to encourage platforms to err on the side of anarchy. Ironically, one of the main criticisms of Section 230 today is that it protects platforms who do not engage in enough content moderation. But relative to the pre–230 case law, 230 is also is what permits platforms to moderate content, without fear of accruing extra liability for doing so. After all, this is why it was enacted as part of the Communications Decency Act, most of the rest of which was struck down as unconstitutional, but which was broadly aimed at scrubbing the internet of porn. And this is why 230 itself is captioned “Protection for private blocking and screening of offensive material,” with its heart, section (c), captioned “Protection for ‘Good Samaritan’ blocking and screening of offensive material.” In short, Section 230 sought to overrule Stratton Oakmont, by allowing platforms to moderate and edit material on their sites, but without doing so opening them up to lawsuits over what they took down and what they left up. It is sometimes said to be the law that allows the internet as we know it to exist -- this might be overstated, but it certainly allowed more heavily curated platforms to exist, relative to the rule followed in Stratton Oakmont.
What Might Have Been?
Section 230 did not merely overturn Stratton Oakmont and put in place a more moderate rule like that in Cubby. Cubby announced distributor liability as the appropriate standard for platforms, not the blanket immunity from liability as a publisher or speaker that 230 enacted. It is possible that the common law would have evolved in a sensible direction, after some period of uncertainty, without Congressional intervention -- perhaps distributor liability, or a form of publisher liability that more expressly centers the need to establish a separate mens rea for the platform, or something new and platform-specific would have developed. This is why it seems hyperbolic to say that, without Section 230, the internet as we know it could never have developed. Other countries took different paths, and the common law is an imperfect system that, after some detours, often hits on the right balance of duties and liabilities.
However, this works best when the law concerning the duties of an industry, and the industry itself, can grow together. But now, in 2019, online platforms have a more important role in American life than the drafters of 230 likely ever imagined. If 230 were to be simply repealed, it is reasonable to assume that the undeveloped and outdated pre–230 case law would simply spring back into life. In many states there would be no controlling caselaw at all. This is simply an untenable situation for such an important part of today’s economic, media, and cultural landscape.
It could lead to unmoderated cesspools on the one hand, and responsible platforms beset by lawsuits and crippled by damages on the other. This would be disruptive both socially and economically, and while it is possible that the courts would eventually develop sensible standards following the footsteps of Cubby, a more sensible option for those who would change the legal standards governing online platforms to actually articulate what those standards should be, and to propose specific legislation, rather than assuming that the legal baseline absent 230 would lead to better results.
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A followup to this post will discuss just what such proposals could look like. While that post will not specifically endorse any of them, they are intended to illustrate how platform responsibilities could be heightened in some circumstances without creating disincentives against moderation, limiting the ability of platforms to serve as forums for free speech, or unconstitutionally encouraging platforms to embrace particular viewpoints. It will also delineate some of the outer bounds of Section 230, that show that heightened responsibilities for platforms aren’t always foreclosed by the statute. Section 230 and the legal standards surrounding online platforms and third-party content are not sacrosanct, buy any changes to the law should be approached cautiously.