After FTC Hearing of Section 230, Questions Emerge on Regulators Authority

The FTC held hearings on reforming Section 230. Sometime after the hearings, questions began emerging on whether the regulator could even regulate content moderation.

Before the current administration took over, it was unclear what a Trump administration would mean for technology policy and innovation. Fast forward nearly 4 years later, we have an answer to that. It wound up meaning outright hostility towards innovation and technology. First, the FCC nuked network neutrality which has sent the sector into total chaos. This caused one of the core pillars of the Internet to crumble. The collapse only began being felt this year when AT&T began introducing zero rating in a bold step towards being an anti-competitive entity as far as online services are concerned.

While Internet integrity in the US is starting to see collapse, the administration wasn’t done yet trying to destroy the Internet. More recently, they began attacking another core pillar of the Internet: Section 230. The law, in a nutshell, shields platforms from excessive liability and, well, allows online platforms to exist in the first place. This war on social media began with Twitter posting facts next to two of Trump’s tweets. The impeached Republican president did what he usually does when coming into contact with reality, he had a total meltdown and screamed “political bias”. The next day, he signed an executive order trying to kill section 230.

All that kicked off a major war on Section 230. It even got to the point where both sides of the political aisle said that the law needs to be reformed even though a solid case for this was never made. In fact, for most digital rights and free speech voices, the law is perfectly fine the way it is. Of course, those voices of reason tend to get drowned out in the flood of hang-wringing and shouting matches by those who know, well, less about technology in the first place.

Two weeks ago, hearings were held by the Federal Trade Commission (FTC) on what to do about the non-problematic Section 230 law. From Broadband Breakfast at the time:

Senators on Tuesday remained broadly divided on the extent and direction that changes to Section 230 should take.

The tenor of the discussion at a Senate Commerce Communications Subcommittee hearing suggested that the law was overdue for an overhaul, as senator after senator criticized what the internet had become.

But proposals for concrete change were fewer. Subcommittee Chairman John Thune, R-S.D., and Ranking Member Brian Schatz, D-Hawaii, for example, introduced the Platform Accountability and Consumer Transparency Act calling for procedural transparency.

Some on the right, including Sen. Ted Cruz, R-Texas, and full committee Chairman Roger Wicker, R-Miss., offered both broad and narrow critiques of Section 230. On the left, Sen. Richard Blumenthal said the PACT Act didn’t go far enough.

Of course, as we reported last week, the PACT bill that some are criticizing won’t go far enough also drew criticism from digital rights advocates for being a threat to online free speech.

More recently, we are hearing more creation from the hearings. With respect to content moderation, some are questioning whether or not the FTC has the authority to law out regulation on how platforms can moderate content. From MediaPost:

Trump said at the time that social media platforms were engaging in “selective censorship” based on viewpoint, despite a lack of empirical proof.

Wicker asked Simons if the agency had received complaints about the activity described in the executive order.

Simons responded that the FTC gets complaints about companies “from a wide variety of sources” — including Congress, competitors and consumer watchdogs — but only takes action if the complaint falls within the agency’s jurisdiction.

“So you don’t view political speech as within your jurisdiction?” Wicker asked.

“Correct,” Simons replied.

The FTC has long said it isn’t empowered to regulate political speech.

In 2004, for example, the FTC rejected a complaint against Fox News by advocacy group, which had asked the agency to investigate whether the company dupes the public with the slogan “fair and balanced.”

Meanwhile, responding to some of the comments made at the hearing, Mike Masnick of Techdirt pointed out that some of the reasons for reforming Section 230 has nothing to do with the law. From TechDirt:

First, he doesn’t actually answer the question. Thune asked him how it would benefit consumers, but Simons answered how it would benefit the FTC. While the FTC might like to argue otherwise, those two things are not the same. Second, what a nonsense question and answer. The point of Section 230 is to protect platforms from being held liable for actions of their users — so why would it make sense for the FTC to ever go after the platform in those cases? Third, it’s difficult to think of any case where (contrary to what Simons claims…) Section 230 ever got in the way of an FTC enforcement action. Indeed, back in 2016 we had a story showing the exact opposite. The 2nd Circuit appeals court more or less said that the FTC gets to ignore Section 230. We found that problematic at the time, but Simons (and Thune) seem to think they just need more of that.

First of all, you don’t “abuse” an immunity granted by Congress when you use it as intended — which is to avoid liability for 3rd party content and to make content moderation decisions. Second: regarding counterfeit or defective goods, counterfeit goods are generally a trademark issue which is entirely exempt from Section 230. You’d think that Chopra would know this? Indeed, there was a huge lawsuit regarding eBay and counterfeit goods that I’m sure he does know about — which shows that the issue is not a Section 230 one.

Also, every major platform already has a massive operation trying to fight counterfeit and defective goods — totally unrelated to Section 230. They do so because they want their consumers to be happy.

Second, there is no “unlevel playing field.” Section 230 protects all websites — including those of “brick and mortar stores.” So it’s a weird comparison to make.

Finally, as we were just discussing, it’s unclear what behavioral advertising has to do with 230. Section 230 is unrelated to business models — and having an advertising based business model has not “inconsistent with the origins of Section 230.” Section 230 has allowed a wide variety of platforms to exist, many of which is because they have relied on Section 230 protections to enable much broader consumer speech.

Once again, it would be nice if someone in our government actually understood the law before commenting on it. Unfortunately, it appears we’re not getting that from the FTC.

As the war on Section 230 carries on, it seems that regulators aren’t able to nail down solid reasons for reforming the law. On the one hand, that could be a sign that political gridlock could actually take over and stall the efforts to gut the law. On the other hand, it could mean that the law could ultimately get gutted for no real reason and cause all sorts of problems down the road. At this point, it’s difficult to say where things could head on this front.

Of course, as we mentioned in previous articles, the effort to kill Section 230 is proceeding on multiple fronts. As the FTC held hearings, it seems that the FCC (Federal Communications Commission) is seeking public comments about the effort to kill the law. From TechCrunch:

FCC Chairman Ajit Pai has decided to ask the public for its thoughts on an attempt initiated in Trump in May to water down certain protections that arguably led to the creation of the modern internet economy. The nakedly retaliatory order seems to be, legally speaking, laughable, and could be resolved without public input — but the FCC wants your opinion, so you may as well give it to them.

You can submit your comment here at the FCC’s long-suffering electronic comment filing system, but before you do so, perhaps acquaint yourself with a few facts.

To be clear, you’re commenting on the NTIA proposal that the FCC draw up new rules regarding Section 230, which the executive order compelled that organization to send, not the executive order itself.

As with the net neutrality debacle, the FCC does not have to take your opinion into account, or reality for that matter. The comment period lasts 45 days, after which the item will likely go to internal deliberations at the Commission.

Where things stand now is that multiple regulators are still organizing to form a collective front to kill or water down the non-problematic Section 230 laws. That will take time, but for now, this is a critical time for American’s to try and, at least, shape the outcome of what this attack will ultimately look like. Whether your opinion matters is, of course, up in the air, but at least American’s are being given an opportunity to have their say in the first place. Making their comments known isn’t going to hurt anything. As for the rest of us looking from the outside in, it’s more or less a waiting game to see what this out of control administration is going to do next.

Drew Wilson on Twitter: @icecube85 and Facebook.

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