Business and Legal Insights

The success of the modern internet can, in many ways, be traced to the passing of the watershed law of internet regulation that provides immunity from civil lawsuits for platforms or other internet intermediaries that publish the content of others. This law, Section 230 of the Communications Decency Act (or “Section 230”) grants immunity to social media platforms, search engines, mobile apps and other internet service platforms for the content posted by users. But Section 230 has come under attack from both sides of the aisle in recent months, with many pushing for the law to be repealed or substantially reformed. From small companies and retailers to large technology corporations, businesses of all sizes should pay attention to any potential amendment of Section 230. Changes to the law could impact the entire operation of interactive computer service providers, even affecting small businesses that have websites with features like embedded customer review plugins. The purpose of this article is to highlight some of the proposed bills getting traction to amend Section 230 and assess the key highlights and drawbacks of each.

What is Section 230?

Section 230 is a federal law that provides immunity for platforms that publish the content of users, even when the platform fails to edit or edits the content. In essence, when an organization allows users to post the users’ own content, the organization cannot be held liable for their hosting and moderation of such online content. This law has long afforded protections to large technology companies against liability and litigation from those that are harmed by content posted by others. Other than some subsequent amendments passed to deal with illegal conduct like human trafficking, Section 230 has remained unchanged since its passage in 1996.

Over the past several months, there have been increasing calls for the repeal or reformation of Section 230 by members of both major parties. Businesses of all sizes should pay attention to the proposals currently pending in Congress, as many of them would impose additional procedural or other requirements on business operations that could determine their immunity from civil liability under Section 230.

Proposals Pending in Congress

Congress is currently considering several proposals to address the increasing criticism of the current state of Section 230. Some proposals are targeted, focusing on addressing specific issues in a piecemeal fashion. For example, the Earn It Act sponsored by Senator Lindsey Graham would remove Section 230 immunity for violations of child sexual abuse laws. In contrast, Senators Mark Warner, Mazie Hirono, and Amy Klobuchar have introduced the Safeguarding Against Fraud, Exploitation, Threats, Extremism, and Consumer Harms (Safe Tech) Act, which would remove Section 230’s application to ads or paid content, allow injunctive relief, and create other exceptions allowing certain victims to bring claims in court.

Some bills focus on procedure, not content. For example, the Platform Accountability and Consumer Transparency (PACT) Act, introduced by Senators Brian Schatz and John Thune, would add additional procedural obligations to those looking to retain Section 230 immunity. The PACT Act requires platforms to publish an acceptable use policy, explain how the platform enforces its content moderation policies, and describe the methods for reporting content or speech that violates these policies or other laws. The PACT Act also requires platforms to review and remove this content within specified periods and provide an explanation along with an opportunity to appeal. Companies would also be required to issue transparency reports, and if they receive more than 1 million visitors or have more than $2 million in revenue, operate a call center to accept complaints, among other things.

Takeaways

From repealing Section 230 to complying with numerous procedural obligations, businesses should be aware of the impact of these potential laws. These firms will be left with two options: comply with the new legislation or risk lawsuits due to a loss of Section 230 immunity. Businesses of all sizes that allow users to publish content to their websites or other interactive internet programs should follow these ongoing debates in Congress and take proactive steps to comply with whatever changes arrive. Businesses at risk for such non-compliance should seek advice from legal counsel experienced in platform liability and government regulatory issues related to technology. Through strategic business counsel and proactive operational planning, serious interruptions to business and revenue generation may be avoided.

While Section 230 has remained largely unchanged since its passage in 1996, a transformation is undoubtedly on the way. While it may be reasonable to reevaluate the scope and impact of Section 230, new legislation will undoubtedly disrupt the status quo.