Justice Department Proposes Reform of Online Liability Shield – Section 230 of the Communications Decency Act

Yesterday, the U.S. Department of Justice (DOJ) released a report with specific legislative proposals to reform Section 230 of the Communications Decency Act – the federal law in existence since 1996 that shields tech platforms from legal liability for content “published” by online users of those platforms. The DOJ report follows a recent Executive Order and will fan the flames of heated debate over the future of Section 230 and the Administration’s efforts to regulate social media platforms.

What led to the DOJ Report and its legislative proposals?

While the DOJ legislative proposals come just three weeks after the President’s May 28, 2020 “Executive Order on Preventing Online Censorship” – the Justice Department has actually been examining reforms to Section 230 in connection with its review of competition concerns of online platforms since July 2019. The DOJ convened a public workshop in February 2020 with expert roundtables and accepted written submissions from a multitude of stakeholders in crafting its legislative proposals.

Calls for Section 230 legislative reform (limiting the legal immunity for tech companies) have been around for some time. Somewhat recently, Congress enacted the Allow States and Victims to Fight Online Sex Trafficking Act of 2017 (FOSTA), which curtailed Section 230’s immunity for certain human trafficking offenses. FOSTA was, in part, the result of caselaw that found that pernicious websites like Backpage, were immune from liability despite allegations that the website knew that it was being used to facilitate human trafficking. Since FOSTA’s passage, some have questioned whether Section 230’s immunity protections should be further curtailed. As seen in DOJ’s report, DOJ strongly adopts this view.

What is in DOJ’s proposed Section 230 reforms?

DOJ’s reform proposals center around the dual goals of providing “stronger incentives for online platforms to address illicit material on their services, while continuing to foster innovation and free speech.” DOJ outlines four categories of reforms to Section 230 to achieve these objectives:

1) Re-aligning incentives for online platforms

Under this bucket of reforms, DOJ proposes limiting Section 230 immunity for tech platforms by enlarging the scope of conduct for which tech platforms could still be liable. 

Immunity should not be provided, according to DOJ, for

a)  “Bad Samaritans” – or those who act “purposefully” (under a heightened mens rea), or those who promote, solicit, or facilitate activity or material a provider “knew or should have known would violate federal criminal law”;

b) Those who commit categories of specific offenses including child abuse, terrorism, and cyberstalking; and

c)  those who commit offenses where the platform had “actual knowledge or notice” that the content violated criminal law or a court judgment.

DOJ refers to these categories of offenders as “truly bad actors” who should not be entitled to immunity. However, the question as to what constitutes a “truly bad” actor, separate and distinct from merely “bad” actors entitled to immunity, will be hotly debated and difficult for policymakers to ascertain going forward.

2) Specifying that Immunity Does Not Apply to Federal Civil Enforcement Cases

While Section 230 specifically states it does not confer immunity for federal crimes, some have argued that the statute nevertheless confers immunity for federal civil enforcement matters. DOJ proposes a specific exemption in Section 230 that would make clear that immunity should not be given for federal civil enforcement, which complements DOJ’s federal criminal enforcement. Notably, the federal government enforces a plethora of civil laws, including laws in the antitrust, environmental, consumer protection, False Claims Act, FIRREA, cyber enforcement, and mail and wire fraud areas. 

3) Promoting Competition

Overlapping with the civil enforcement carveout, DOJ’s proposal specifies that Section 230 should also carve out federal antitrust laws – particularly laws regulating anticompetitive conduct – from any immunity claimed by tech companies.

4) Requiring Greater Transparency

Finally, DOJ recommends additional legislative changes categorized as “promot[ing] open discourse and greater transparency.”

Section 230 currently provides civil immunity to platforms that restrict access to “obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable” content, (47 USC § 230(c)(2)(A)).  DOJ critiques the residual clause of this language – the “otherwise objectionable” phrase – as overly vague and subject to expansive interpretation.

Instead, DOJ proposes striking that phrase and instead inserting a “good faith” standard, where immunity could be conferred only if a platform takes such action “in good faith” that the content “violates federal law or promotes violence or terrorism.”

DOJ proposes specifically defining “good faith” to include requirements that platforms transparently identify their terms of service to users, adhere to the terms of service, reasonably apply restrictions on users based on the terms of service and the law, and provide notice to users when content is restricted by the platform.

According to DOJ, this definition of “good faith” would aid in incentivizing platforms to clearly spell out their terms of service and promoting more transparency in the platforms’ content removal decisions. Additionally, on the issue of clarifying incentives, DOJ proposes including in legislative language the principle that if a platform indeed restricts content pursuant to the law and/or its terms of service, this does not subject the platform to liability as a publisher or speaker for all other content on its platform.

In addition to setting forth these four categories of recommendations, the DOJ report also identifies 5 other topics [cite] as “ideas under further consideration,” including:

i) Distinguishing between different types of internet services

ii) Distinguishing between First-Party and Third-Party Speech

iii) Addressing Republication Liability

iv) Sunsetting any legislation; and

v) Requiring more Transparency Reporting.

What happens now?

It is unclear how independent agencies like the Federal Communications Commission or the Federal Trade Commission will factor the DOJ report into their consideration of the Executive Order or the various activities it purports to set in motion.

But because DOJ has now officially proposed specific recommendations (and offered other related considerations in its report), the entire report will undoubtedly be closely reviewed by lawmakers to consider crafting these proposals into legislative text. Consequently, all eyes will be on the leaders of the Senate and House Judiciary Committees, to see if they might consider holding hearings on these proposals and giving the proposals additional committee process. Moreover, because Section 230 rests in Title 47, the leaders of the Commerce Committees in both chambers will also be closely watched regarding how they view these legislative proposals by DOJ.  

It is also unclear how these DOJ proposals will affect other legislative proposals on Section 230. For example, Senate Judiciary Committee Chairman Lindsey Graham introduced the bipartisan EARN IT Act (amending Section 230 to allow companies to “earn” liability protection for child sexual abuse violations on their platforms) and already held a hearing on that bill. Will he want to consider additional hearings on DOJ’s additional proposals? And if so, will he give further committee process to other members who have offered other legislative proposals regarding Section 230? This is uncertain right now.

What is certain is that Section 230 issues are fast-evolving on multiple fronts – in the courts, in the executive branch, and in the legislature. Wiley is closely analyzing each of these developments to counsel clients on how to navigate these topics today and into the future.