Section 230 of the Communications Decency Act cannot prohibit ‘income-based’ theories of liability – GamesRadar+
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Recently, a federal court in California ruled that Apple, Google and Facebook (the “Platforms”), operating as application delivery platforms, are not protected by Section 230 against a claim that the Platforms “deal illicitdeal for illicit gambling.” In Re: Dispute over simulated casino-style games in the Apple Inc. App Store., no. 5:21-md-02985-EJD, Dkt. No. 92 to 33 (ND Cal. 6 Sep 2022) (emphasis in original). Essentially, a content distribution platform might not be immune from liability under Section 230 if it generates or distributes revenue in connection with unlawful conduct, or in other words, “[S]Article 230 does not apply to platforms own bad deeds.” Identifier. at 29 (emphasis in original). This is an important decision for interactive entertainment platform companies relying on Section 230. Here is a summary.
Article 230 in brief. In general, Section 230 provides legal immunity for service providers from liability arising from information provided by a third party user of the service. At the heart of the tribunal’s analysis is the question of whether a claim against an interactive service provider “would place [the
service provider] in the role of an editor.” Identifier. at 10. Such suits that would seek to “hold a provider accountable for its performance of a publisher’s traditional editorial functions — such as deciding to publish, remove, postpone, or edit content — are prohibited.” Identifier.This means that Section 230 would protect a service provider from a claim to hold the service provider liable, for example, for choosing or choosing not to publish particular third-party content, or for editing such content in as long as the traditional publisher would.
The In Re: Dispute over simulated casino-style games in the Apple Inc. App Store.Case. In Apple, the plaintiffs advanced three theories of liability: (1) the Platforms are liable because they, at least through their discovery and recommendation algorithms, “amplify and direct users to” illicit content; (2) the Platforms are liable because they operate as “bookmakers” processing payments for illegal conduct; and (3) the Platforms are liable because they provide support services, such as data sharing and marketing recommendations, to the creators of the illegal third-party content to help the third party improve its illegal content.
The court held that the first and third theories of liability are prohibited by section 230, but not the second, although the court said that the third theory of liability is the “trickiest” to decide. Identifier. at 30-35 (finally deciding that, with regard to the third theory of responsibility, the Platforms behaved as an “editor[s]In concluding that the second theory of liability can survive Section 230, the court compared the behavior of the Platforms to Google’s behavior in Gonzales v. Google LLC2 F.4th 871 (9th Cir. 2021) and the conduct of HomeAway.com, Inc. HomeAway.com, Inc. c. City of Santa Monica, 918 F.3d 676 (9th Cir. 2019). In
Gonzales, the 9th Cir. held that Section 230 does not shield Google from liability when the plaintiffs’ theory of liability is based on an allegation that “Google shared advertising revenue with ISIS…in violation of the Terrorism Act” because the allegation was not “directed towards the publication of third-party information”, but rather was based on the fact that “Google provides the Islamic State with material support by paying money to the Islamic State”.
Gonzales2 F.4th at 898. In HomeAway.com, the 9th Cir. upheld an order requiring Internet rental accommodation platforms, such as HomeAway.com, to follow specific rules regarding listings, one of which limits them to booking only registered properties. HomeAway.com, 918 F.3d at 682. HomeAway.com argued that the order was preempted by Section 230 because the order would require HomeAway.com to “monitor the content of a list of third parties”, but the 9th Cir. disagreed, finding that HomeAway.com had no obligation to monitor third-party listings; he was only prohibited from “processing transactions for unregistered properties”. Identifier.
The cOurt certifies the matter to the 9th Circuit.Recognizing the significance of its decision, the Northern District of California – without prompting from any party to the litigation – certified its order of immediate interlocutory appeal to the 9th Circuit. We will continue to follow this case as it develops. In the meantime, Internet Service Providers should be aware that Section 230 may not provide protection from third party content liability where the Internet Service Provider acts in a positive manner or engages in conduct that may give rise to liability. legal.
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