Top Internet Law Developments of 2017 (Very Late)

March 13, 2018 · by · in Content Regulation, Copyright, Derivative Liability, General, Internet History, Privacy/Security, Search Engines, Trademark

[It’s a sign of my busy 2018 that I’m only now posting my annual Internet Law year-in-review recap. Better late than never?]

2017 was a generally OK year for me personally. My wife’s health has been stable, I was able to return to the classroom for the first time in 3 years, and I had a productive year of writing. However, for our country, 2017 was terrible. So many memes might accurately describe the situation, but this one will suffice:

Dumpster Fire

Can the Print-on-Demand Industry Survive? The print-on-demand industry was rocked by two troubling rulings this year. First, in Harley-Davidson v. Sunfrog, the court issued a trademark-based injunction that required Sunfrog to block any items containing the plaintiff’s marks or substantially similar variations. How can Sunfrog find and block “substantially similar” variations, especially of logos? Then, in Greg Young Publishing v. Zazzle, the jury issued statutory copyright damages against Zazzle for printing designs incorporating the plaintiffs’ works despite Zazzle’s multitudinous efforts to screen out the designs. Collectively, the cases show that print-on-demand publishers may be strictly liable for user-caused infringements on the printed items; and vulnerable to injunctions that effectively require 100% prevention of future infringements. Can print-on-demand companies navigate these challenges while remaining profitable?

Trump and Twitter. Trump seems to think he’s presidenting by tweetstorming, but he’s just a yuge troll. Trump uses his @realdonaldtrump account daily to hijack headlines (and the mainstream media takes the bait EVERY TIME), which in turn deflects attention from his kleptocracy, kakistocracy, nepotism, incompetence, disregard for the rule of law, and efforts to corrode our democratic republic. Our country and the world would improve if Twitter permanently banned Trump’s account for relentless pernicious trolling; but Twitter and Trump have a symbiotic dependence on each other, and our country is suffering from this unbreakable bond.

Uber. In 2017, Uber had more unnecessary drama and unforced errors than any Internet company I can recall. Seemingly every week brought a shocking new Uber scandal or lawsuit. I long ago switched all of my ride-sharing business to Lyft.

Europe’s GDPR. The GDPR comes into effect in a couple of months, and many US companies spent substantial time and money in 2017 and 2018 preparing for its arrival. It remains to be seen just how extensively the GDPR (and the inevitable follow-on privacy regulations to come) changes US practice. At minimum, it has created a large and growing infrastructure among US companies to comply with European privacy law, and communities like that tend to become self-reinforcing. And get ready for a deluge of enforcement actions with the threat of massive dollar fines.

Net Neutrality. I find net neutrality complicated for several reasons, including (1) much of the legal debate turns on FCC arcania far beyond my expertise; (2) there are major questions about which regulator(s) is best situated to oversee the issue (FCC, FTC, Congress, the market, others?); (3) there are overlays of complicated Constitutional law, administrative law and antitrust law issues; and (4) most importantly, the pervasive lack of broadband competition leads to monopolies/duopolioes that pursue abusive, gluttonous, self-dealing, anti-consumer behavior.

If we could solve the competition problem, maybe the net neutrality issue would be less troubling. Until then, it seems unbelievably stupid to pursue “market-based” policy solutions to net neutrality given the obviously broken broadband market—especially with market participants who have decades of experience abusing consumers and manipulating government regulators. Any regulatory interventions not focused on the competition problem—such as the FCC’s repeal of its prior net neutrality rules—are almost certainly a win for the Swamp.

Section 230 and Sex Trafficking. Sometimes, I still can’t believe Congress enacted Section 230. Legislatures rarely pass immunities or safe harbors, and it’s even rarer for Congress to correctly spot an important nascent market and take proactive steps to avoid ruining it. Equally remarkably, Congress hasn’t spoiled its handiwork for over two decades. (There have been a few minor amendments over the years, but none structural).

Section 230’s successful run is coming to an end. The first structural modification will relate to sex trafficking, which Congress is expected to enact this week. I’ve already explained in gory detail my objections to the bill, especially after the House smushed two dubious bills into a monstrosity I call the “Worst of Both Worlds FOSTA.” The bill is terrible policy because it does not clearly do anything to help sex trafficking victims (and does some things that could make their situation worse), hurts sex workers, and may counterproductively lead to a net increase of both sex trafficking promotions and all other types of anti-social content. However, I remain hopeful that the bill, by itself, will not ruin Section 230’s integrity; most cases in Section 230’s sweet spot should proceed to defense wins as they always have. In contrast, the cumulative effect of additional inevitable Section 230 exceptions will create a swiss-cheese immunity with enough holes to undermine its structural integrity.

The SESTA/FOSTA legislative process dominated my year professionally. I testified before Congress twice, posted two files to SSRN, and wrote lengthy blog posts at least a half-dozen times. In addition, in response to the first draft of Wagner’s FOSTA bill (a truly horrible piece of legislation), I undertook several other Section 230 initiatives, including:

“Conservatives” Bring Censorious Civil Rights Lawsuits Against Internet Giants (and “Liberal” Google/Facebook/Twitter Haters Cheer Them On). I don’t know what “conservative” means any more. Since the 2016 elections, every principle I thought conservatives held dear has been brazenly tossed aside. So perhaps it shouldn’t be surprising that some conservatives are now bringing civil rights litigation claiming that they have been deprived of their civil rights online. Examples include Prager University v. YouTube, Johnson v. Twitter, Taylor v. Twitter, and less celebrated cases like Tiffany Dehen v. Twitter.

Don’t get me wrong—I hold our civil rights dear, and their protections should extend equally to all affected people. But seeing conservatives bringing Unruh Act claims blows my mind.

Even more baffling, the lawsuits seek to strip private property owners (of servers, routers, and intangible assets required to run online services) of their discretion about how they can use that private property. Historically, conservatives viewed restrictions or taking of private property as pure evil, but that’s exactly what their litigation seeks to achieve.

Worst of all, if we get past the rhetoric, these lawsuits seek to advance censorship. Internet services like Google Search, Facebook’s newsfeed and Twitter publish third party content. The lawsuits seek to tell the services what content they can publish or withdraw–in effect, to eliminate their editorial discretion. Thus, if successful, the lawsuits would have the effect of overriding the Internet services’ freedom of the press—forcing them to publish content they would choose not to publish (in what should be their sole and unrestricted editorial discretion). For more, see my short essay, “Of Course the First Amendment Protects Google and Facebook (and It’s Not a Close Question).”

Some of the plaintiffs hold odious beliefs, especially to “liberals.” The plaintiffs might be characterized as racist, white supremacists, and trolls. Yet, many “liberal” academics and policy-makers also hate the Internet giants, and they favor the exact same principles the odious plaintiffs are litigating. This has created an unholy pro-censorship consensus across all parts of the political spectrum.

That’s exactly why the First Amendment remains essential. The Constitutional framers knew that support for censorship cuts across all cultures and time eras, so the only way to suppress censorship was to lock free speech into the Constitution.

Internet Companies Are Viewed as the Problem, Not the Solution (Especially for Political Ads). For two decades, Internet companies were considered a possible panacea for various social problems. The Internet was supposed to facilitate global community-building, defeat censors, and strengthen markets. Recently, this pendulum has swung completely. Instead of being viewed as the solution, Internet companies are now viewed as the problem that needs fixing.

No single issue better encapsulates this concern than political advertising in the 2016 presidential elections. Like arms dealers, the Internet companies happily took ad dollars from each candidate…and from Russian malefactors sowing discord (and perhaps tipping the election to their vassal). Worse, until they were called out, the Internet companies mostly downplayed the concerns. That was tremendously short-sighted. Nothing motivates members of Congress to act than the risk that they will lose reelection due to some factor they can’t control, so the regulatory wheels immediately started spinning.

Clearly, the Internet companies deserve some blame. Political advertising abuse isn’t some unexpected one-in-a-trillion misuse of the ad platforms offered by Internet companies. Instead, if you offer a self-service advertising system, 100% guarantee that it will be misused thousands of ways, including to distort our political processes. It’s disappointing that the Internet companies didn’t proactively build proper safeguards to prevent abusive political advertising, especially by foreigners seeking to undermine our democracy.

This mistake, and the overall antipathy towards Internet companies, will lead to lots of terrible regulation. Just like you shouldn’t email angry, you shouldn’t legislate angry. Facebook and Twitter have already taken steps to provide some transparency about ad buys, but it’s possibly too little and almost certainly too late. A regulatory tsunami is coming for the Internet companies. It will be as ugly as you fear.

Honorable Mentions:

* #MeToo. A broad and powerful social movement against sexual harassers started with a hashtag. This movement almost certainly couldn’t exist without the open discussions facilitated by social media. And don’t ignore how Section 230 played a key role in enabling the discussion. If social media services had to pre-vet every accusation for potential defamation, the #MeToo hashtag would have never gotten off the ground. Indeed, Britain hasn’t experienced #MeToo movement because of its overwrought defamation laws.

* The Death of Keyword Advertising Lawsuits. I’ve already written an obituary for competitive keyword ad lawsuits. The FTC’s win over 1-800 Contacts now suggests that efforts to suppress competitive keyword advertising are not merely ineffectual, they could be anti-competitive.

* Copyright Office Killed Off Section 512 Protection for Many Services. At the end of 2017, Section 512 protection ended for any websites that didn’t redesignate an agent with the Copyright Office pursuant to the Copyright Office’s new designation rule. I’ve asked the Copyright Office to release stats about this transition so we can assess the carnage.

* North Carolina v. Packingham. The most important Internet-related Supreme Court ruling of the year. The Supreme Court struck down North Carolina’s ban on sex offenders using social media, and similar bans have been falling around the country. Perhaps more importantly, the Supreme Court blew a big kiss to the social importance of social media, suggesting that perhaps everyone should have the legally protected rights to participate in them. At minimum, the Supreme Court ruling celebrated Internet exceptionalism–a powerful throwback to the seminal Reno v. ACLU case 20 years earlier.

* hiQ v. LinkedIn. hiQ’s injunction against LinkedIn’s anti-scraping efforts was shocking. If it survives on appeal, it will reshape how we think about online trespass law.

* Government officials blocking constituents on social media. This is ubiquitous but not OK. I hope the courts make that clear soon.

* Bitcoin. The multi-billion dollar Q: the emergence of a true cryptocurrency, or a speculative bubble?

Bonus: it’s not Internet law, but I must mention that ICE terrorized many Americans in 2017, and their gleeful and cruel antics made many communities less safe. Rebuilding ICE from the ground up should be a top 10 policy priority once we replace the current kakistocracy.

Lists from prior years.

Previous top 10 lists from 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 and 2006. Before that, John Ottaviani and I put together a list of top Internet IP cases for 2005, 2004 and 2003.