47 USC 230 and Consumer Protection Talk Notes

By Eric Goldman

Last week I made a very short presentation on 47 USC 230 and consumer protection at the ABA Antitrust Section’s Consumer Protection Conference. (I was scheduled for 6 minutes, but I think I took about 8). My talk notes:

47 USC 230 tries to divide online content into first party content and third party content. In its simplest form, 230 says that online actors can’t be liable for third party content unless (1) ECPA, (2) federal criminal enforcement, or (3) IP claims.

230 is the flagship example of cyberspace exceptionalism. As a result, its outcomes can challenge our traditional notions of tort law. This befuddles bright lawyers.

Despite 230, websites always remain liable for first party content.

* Ex 1: if they post their own content, they are liable

* Ex 2: if they make marketing representations, they are liable under standard doctrines like contract and false advertising law. Even so, some courts have been giving websites a pass for marketing representations which are rendered untrue by third party actions.

* Ex 3: Barnes v. Yahoo: website can by liable under promissory estoppel theory if it promises to remove third party content

Plaintiffs often try to argue that third party content becomes first party content.

* Ex 1: website contract may take ownership of user-supplied content

* Ex 2: SEC says that issuers endorse/adopt content that they link to

However, these arguments generally fail under 230. If content starts out as third party content, there is almost nothing the website can do that will convert the content into first party content. As a result, agency civil enforcement actions can unexpectedly run afoul of 230 when they collapse the distinctions between first party and third party content.

However, there is a possible workaround. In the Roommates.com case, the Ninth Circuit said that websites can lose their 230 protection in civil cases if they “encourage illegal content” or “require users to input illegal content.” The FTC is relying on this language in its recent Pricewert/3FN enforcement action against an Internet access provider who facilitated customers allegedly engaged in illegal activities. From my perspective, the Pricewert enforcement action could make sense in the following postures:

* if the FTC is bringing a criminal enforcement action, 230 is irrelevant

* if the FTC’s civil enforcement action is premised on Pricewert’s actual illegal behavior, 230 is irrelevant

* otherwise, if the civil enforcement action is premised on the illegal behavior of Pricewert’s customers, then this might fit into the Roommates.com exception if such an exception exists. However, I am troubled by such an exception, especially given that the enforcement action might also adversely affect Pricewert’s customers who only engaged in completely legal activity.

Two concluding observations:

1) 230’s basic division between first party content and third party content sounds great in theory but is tough to apply in practice.

2) In light of 230, enforcement agencies should rethink their expansive liability theories that basically assume that everyone should be responsible for a common set of online behavior (unless the agency is pursuing a criminal enforcement action).