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Myths and Facts about Section 230

· October 16, 2019

In advance of today’s Congressional hearing on ‘Fostering a Healthier Internet to Protect Consumers,’ it seems appropriate to address some of the common misconceptions around Section 230, what is frequently called “the Internet’s most important law”:

Myth:  Section 230 grants an unfair immunity only to ‘internet platforms,’ not other businesses.  

Fact:  Section 230 is not limited to ‘internet platforms’.  It’s available to any entity that operates an online space where third parties may post content—including brick-and-mortar businesses, newspapers, and content creators.  Section 230’s text also explicitly protects schools, libraries, and software developers, among others, in 47 U.S.C. § 230(f)(2).  Section 230 provides business certainty to companies of all sizes, and is particularly valuable in protecting startups from costly litigation.

Myth:  Section 230 shields companies from liability for almost all legal claims.

Fact:  Section 230 protection limits services’ liability only with respect to certain third-party content that they did not aid in developing, and does not shield the user who actually posted the content from liability.  The good Samaritan provisions in Section 230 are designed to enable website operators to fight misconduct and protect their users from online harms by removing disincentives to moderate abusive behavior.  Narrowing this protection would have the perverse result of making it harder for website operators to police bad actors.

Myth:  Section 230 gives online services unconditional immunity.

Fact:  CDA immunity is far from unconditional.  It contains exceptions for criminal activity, IP infringement, and privacy, among others (47 U.S.C. § 230(e)).  Courts have made clear that intermediaries can be liable in many cases, including soliciting illegal content (Roommates.com); “developing” unlawful content (Jones v. Dirty World Entm’t LLC); failing to warn users about known risks (Doe v. Internet Brands); and paying for unlawful content (Accusearch).   

Myth: Section 230 is no longer relevant or necessary.  

Fact:  The businesses that most need Section 230 protection are small American startups who hope to export abroad.  Empirical research demonstrates that U.S. companies are significantly likelier than EU companies to obtain investment, due to Section 230 being stronger than EU law.  This is particularly important to startups seeking early-stage venture capital. Economists have also found that weakening liability protections would substantially decrease investment, as well as lead to a reduction in $44 billion in GDP and 4.25 million jobs per decade.

Myth:  Section 230 protects online services from federal narcotics and terrorism laws.

Fact:  Section 230 provides no immunity from federal criminal law (47 U.S.C. § 230(e)(1)), and includes other exceptions as well.  Online services that themselves engage in criminal conduct have always been liable for these actions. 

Myth:  Congress should not include intermediary protections in free trade agreements because it cannot amend federal law once it has done so. 

Fact:  Free trade agreements do not prohibit Congress from changing domestic law; only the Constitution limits how Congress can legislate.  Congress has repeatedly amended statutes that are the subject of free trade agreement commitments. The protections in Article 19.17 of USMCA are drafted generally, and the U.S.-Japan agreement is similarly flexible.  Annex 19-A of USMCA specifically contemplates that Congress may revise Section 230.  

Myth:  Protecting online intermediaries is not a trade issue nor a U.S. trade priority.

Fact:  Promoting digitally-enabled exports is a critical aspect of U.S. trade promotion, and these exports depend on predictable rules of the road globally on issues like intermediary liability.  Since 2003, 10 U.S. trade agreements with 15 countries have included some form of intermediary protections, and the 2015 bipartisan Trade Promotion Authority explicitly prioritized extending WTO commitments to digital trade.  Promoting consistent global rules has benefited U.S. digital exporters, large and small.  The online tools used by small businesses to engage customers and enter markets are contingent on Section 230 protections.

Myth:  U.S. Internet services face no market access barriers abroad.

Fact:  Barriers to U.S. digital exporters have proliferated as foreign countries adopt protectionist policies to target a sector where the U.S. leads.  As the U.S. Trade Representative found in regard to particularly hostile rules in India, “[t]he absence of a safe harbor framework discourages investment to Internet services that depend on user generated content.”  As small American businesses seek to export abroad, the absence of U.S.-style protections prevents services from using reviews and customer feedback to improve products, thus inhibiting entry into international markets.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.