Section 230 of the Communication Decency Act (“CDA”) provides substantial immunity from liability for providers and users of “interactive computer services.” However, the depth of immunity provided by the CDA has not been without controversy. Some recent and controversial decisions this past month involving Section 230 of the CDA include:
Yelp class action lawsuit dismissal – The US District Court recently dismissed a class action suit against Yelp alleging that it extorted advertising from businesses by manipulating reviews provided by third party members, amongst other allegations. The court found that Yelp was immune from liability under the CDA, regardless of motive, for filtering out user reviews that it claimed to be false or unreliable based on its review-filtering technology.
BLACK v. GOOGLE, INC. upheld – The US Court of Appeals, Ninth Circuit affirmed a decision from the district court finding Google immune from liability under the CDA for posting defamatory material provided by a third party (negative reviews) about a business that was posted on Google.com.
Cases in regards to Section 230 of the CDA help better define, as interpreted by the courts, the scope of immunity from liability that is granted to providers of “interactive computer services,” a concept very relevant to this course. One fairly recent Section 230 case that was brought to the Superior Court of New Jersey that sheds light on the applicability of the CDA to e-commerce sites was MILGRAM v. ORBITZ, which will be discussed in this blog post.
MILGRAM v. ORBITZ
Factual Background
TicketNetwork owns and operates an online marketplace named “TicketNetwork Exchange” where buyers can purchase event tickets directly from independent, 3rd-party ticket sellers who post and update their own self-acquired inventory of tickets. Orbitz owns and operates CheapTickets Exchange, a similar online ticket marketplace, and entered into an agreement with TicketNetwork for their ticket listings to be available on TicketNetwork Exchange. On May 26, 2009, an investigator for the Division of Consumer Affairs bought two Bruce Springsteen tickets from the TicketNetwork Exchange before they went on sale to the general public. After receiving the tickets, it was confirmed that the tickets were printed on June 1, 2009, which was after the date the investigator purchased them.
Allegations & CDA Immunity
The NJ State Attorney General and the NJ Division of Consumer Affairs filed suit against Orbitz and TicketNetwork alleging (1) violation of the NJ Consumer Fraud Act (“CFA”), a state law, specifically pointing out that the defendants did not and could not possess the tickets when sold even though a 3rd party was the seller and (2) violation of the NJ Advertising Regulations, another state law. The defendants moved to dismiss the complaint arguing that the state law claims were preempted by section 230(c)(1) of the CDA and that they were immune since a 3rd party posted the tickets and they were only providers of an “interactive computer service.” However, the plaintiff argued that the defendants are not immune under the CDA because (1) the claims treat them as “commercial actors,” which are not “speakers or publishers” as specified in the CDA, and (2) the defendants actively participated in selecting, editing and deleting content, which made them an “information content provider,” who are not immune under the CDA.
Court Opinions & Analysis
The court here discussed an important point regarding Section 230 of the CDA in that it must ask itself whether the alleged violations were derived from the defendants conduct as a “publisher or speaker.” The reason why this is important is that if the conduct of the defendant is not that of a “publisher or speaker,” then the immunity of liability granted by the CDA may not apply. This was not an approach taken in the Roommate.com case from class. This is in some ways bringing up the issue of whether e-commerce sites who publish these 3rd party postings are in fact “publishers or speakers” as written in the CDA. The plaintiff argued that the defendants were “commercial actors” and not “publishers or speakers” but the court rejected that label, in part as a result of referencing the discussion from the Roommate.com case where The Ninth Circuit concluded that the CDA covers “any activity that can be boiled down to deciding whether to exclude material that third parties seek to post online.” As a result, the court discussed an important concept which directly applies to e-commerce sites; stating that “the fact that the defendants charge ‘service’ or ‘administrative’ fees is irrelevant to the CDA analysis.” This could have implications for many other e-commerce style websites because by simply charging a fee for their service does not necessarily strip their immunity from liability under the CDA.
Following the rejection of the “commercial actor” arguments, the court went to determine if the defendants were considered an “information content provider,” a term that was heavily analyzed in the Roommate.com case. It must first be understood that Orbitz had the ability to manage content, including the URL’s and static content via a content management application. For example, they had the ability to insert links to tickets for specific events in order to highlight them on the site. In its analysis, the court relied, in part, on the Carafano case that was reviewed by The Ninth Circuit Court. In that case, the Ninth Circuit pointed out that the main question is whether the “essential published content” was provided by “another information content provider.” So although Orbitz may have published certain content on the site, such as providing links to events or modifying logos, the “essential published content,” which in this case refers to the Bruce Springsteen tickets for sale posting, was made by a third party and Orbitz was doing nothing more than exercising a publisher’s traditional editorial functions. Since there was no material, substantive contributions to the ticket listings, the defendants’ actions did not constitute “development, in whole or in part,” a phrase that is used to define what it is to be an “information content provider” under the CDA. This case is different from the Roommate.com case in that Roommate.com was found to develop, at least in part, the objectionable material because it provided illegal questions and required the users to answer them. In this case, the defendants are not supplying content to and are not forcing 3rd party publishers to post potentially illegal content, as was alleged with the Bruce Springsteen ticket postings. The defendant websites also did not encourage the posting of illegal content and warned the buyer in several places, including the footer, terms of service and notifications, that they were purchasing from a 3rd party broker. As a result of all this the defendants were not found to be “information content providers” and thus were immune from liability under the CDA.
Thoughts on Section 230
Section 230 of the CDA provides a very important and sometimes controversial immunity from liability for websites that post contents from third parties. It is important in that it shields website operators from potentially illegal content being posted on their site by third parties. That shield has allowed for the promotion and continued development of the internet over the years. Of course the extent to which the operators are shielded depends on if they “develop in part” the posted material whereby they may be labeled as an “information content provider” and not immune under the CDA. The Roommate.com case from class brought to light that the courts may want to control illegalities of certain sites with respect to how content is provided by 3rd parties and brings up the concept that “if something is illegal to do in the physical world, then analogously, it should be illegal to do in the virtual world.” Recently there has been talk to repeal Section 230 or make amends to it, in particular to the online bullying issue that has been in the news. The concern again would be if it is illegal to do in the physical world, then should it be illegal to do in the virtual world? (although I’m not sure if bullying is illegal) And who should be liable if it is illegal in the virtual world? These are just some interesting questions to think about when looking at the implications of Section 230 of the CDA.
Yelp Dismissal News – http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202521024427&Yelp_Class_Action_Dismissal_Bolsters_Web_Publisher_Immunity
BLACK v. GOOGLE, Appeals Court – http://www.leagle.com/xmlResult.aspx?page=1&xmldoc=In FCO 20111101164.xml&docbase=CSLWAR3-2007-CURR&SizeDisp=7
BLACK v. GOOGLE, District Court – http://dockets.justia.com/docket/california/candce/3:2010cv02381/228100/
MILGRAM v. ORBITZ – http://faculty.law.wayne.edu/Weinberg/law-in-cyberspace/Milgram-v-Orbitz.pdf