California's Laws: Undermining Section 230?

Section 230 of the Communications Decency Act of 1996 is a US law that protects online platforms from civil liability based on third-party content and the removal of content in certain circumstances. In 2020, a California ruling threatened to undermine Section 230 by exempting publicity rights, which was argued to be a form of intellectual property not covered by the law. This ruling, if upheld, could have significant implications for online service providers and users' freedom of expression. It is essential to consider the potential impact on the open and free nature of the internet in California and beyond. This case highlights the ongoing debate surrounding Section 230 and the need to balance user protection and freedom with addressing illicit or harmful content.

California Court of Appeals denies Snap's petition

In the case of Snap, Inc. v. Superior Court, the California Court of Appeals denied Snap's petition, upholding the decision of the trial court. The case centred around the business models of Snap and Meta and their handling of user data. The court concluded that Snap and Meta's practices of accessing and utilizing their users' data for business purposes excluded them from the limitations on disclosure outlined in the Stored Communications Act (SCA).

The SCA establishes protections for providers of electronic communication and remote computing services, safeguarding them from certain disclosure requirements. However, the court determined that Snap and Meta did not solely act as providers of these services and, therefore, could not claim the protections afforded by the SCA. This decision was based on the companies' extensive user data access and utilization for business purposes, which fell outside the scope of the SCA's protections.

The court's ruling has significant implications for the liability of online platforms and their handling of user data. By denying Snap's petition, the court affirmed that companies cannot hide behind the SCA's protections when they actively use user data for their business interests. This sets a precedent for increased accountability and transparency in the way online platforms manage and utilize user information.

While the specifics of this case pertain to Snap and Meta's business models, the ruling sends a broader message about the interpretation and enforcement of laws pertaining to user data privacy and liability. It underscores the evolving legal landscape surrounding user data protection and the potential limitations of immunity granted by laws like the SCA. This decision also highlights the ongoing debates and efforts to reform Section 230 of the Communications Decency Act, which provides immunity to online platforms from civil liability for third-party content.

Section 230, enacted in 1996, was intended to foster a free and open internet while incentivizing platforms to remove harmful content. However, the Department of Justice and other critics argue that reforms are necessary to address the realities of the modern internet, including the proliferation of online criminal activity and the need to protect users, especially children, from harmful content. While Section 230 has been instrumental in shaping the internet as we know it, the California Court of Appeals' denial of Snap's petition underscores the evolving legal landscape surrounding online platforms' responsibilities and liabilities.

California's anti-SLAPP law

California's anti-SLAPP (strategic lawsuits against public participation) law was enacted by the state legislature to protect the petition and free speech rights of all Californians. The law allows a defendant to file a motion to strike a complaint, which the court will hear within 30 days unless the docket is overbooked. Discovery activities are placed on hold from the time the motion is filed until the court has ruled on it. The court will first determine whether the defendant has established that the lawsuit arose from one of the statutorily defined protected speech or petition activities. If that is the case, the judge will grant the motion unless the plaintiff can show a probability of prevailing on the claim.

California's anti-SLAPP statute provides for a special motion to strike a complaint where the complaint arises from activity exercising the rights of petition and free speech. This statute was enacted to correct abuse of the anti-SLAPP statute and prohibits anti-SLAPP motions in response to public interest litigation when certain conditions are met. It also gives a successful defendant who can show that the plaintiff filed the lawsuit to harass or silence the speaker the ability to file a so-called "SLAPPback" lawsuit against their opponent. Under this remedy, a SLAPP defendant who won a motion to strike may sue the plaintiff who filed the SLAPP suit to recover damages for abuse of the legal process.

The California anti-SLAPP law also provides that the prevailing defendant attorney fee and immediate appeal provisions do not apply to SLAPPbacks. Additionally, an anti-SLAPP motion may not be filed against a SLAPPback by a party whose filing or maintenance of the prior cause of action from which the SLAPPback arises was illegal as a matter of law. The law sets forth a procedure for challenging subpoenas, allowing any person to challenge subpoenas for "personally identifying information" sought in connection with an underlying lawsuit involving that person's exercise of free speech rights.

Publicity rights claims

Section 230 of the Communications Decency Act (CDA) provides broad immunity to online platforms for claims arising from hosting third-party content. However, Section 230(e) of the statute expressly exempts certain types of claims from this immunity, including "intellectual property" claims. This has created an open issue in the courts as to whether a violation of someone's "right of publicity" is considered intellectual property under Section 230.

The right of publicity is generally defined as the right to control the use of a person's name, image, and likeness. Website operators that allow users to post content should carefully consider what they define as "intellectual property" when determining what content to take down following a valid complaint. While some states, like Maryland, have not adopted the right of publicity as a cause of action through statute or common law, others have. This inconsistency in how states define and qualify the right of publicity has led to uncertainty for website operators, who must now be more cautious in their actions.

In the case of Hepp v. Facebook, the Third Circuit ruled that Section 230 does not preempt publicity rights claims because they qualify as "intellectual property" claims. This ruling directly conflicted with the Ninth Circuit's rule, which states that all state IP claims are preempted by Section 230. The Third Circuit's ruling was based on the commercial effect of the violation on the plaintiff's intellectual property, rather than protected speech. This decision has significant implications for online platforms and individuals' freedom of expression.

The Department of Justice has also recognized the need to reform Section 230 to align with the realities of the modern internet. While Section 230 has protected small blogs, websites, big platforms, and individual users for over 25 years, the Department proposes reforms to clarify the scope of its immunity. These reforms aim to address unlawful content, enhance federal government enforcement capabilities, and improve content moderation practices.

Ninth Circuit Court of Appeals rejects immunity

Section 230 of the Communications Decency Act of 1996 provides immunity to online platforms from civil liability based on third-party content and for the removal of content in certain circumstances. The law states:

> "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."

Section 230's protections are not absolute, and they do not protect companies that violate federal criminal law or intellectual property claims. In 2021, the U.S. Court of Appeals for the Third Circuit recognized an exception to Section 230 immunity for claims pertaining to state intellectual property law in Hepp v. Facebook. The Third Circuit concluded that the natural reading of Section 230(e)(2) is not trumped by policy considerations about free markets or legal certainty.

The Ninth Circuit Court of Appeals has also weighed in on the debate over the scope of legal immunity for Big Tech social media sites under Section 230. In the case of Enigma Software Group USA, LLC v. Malwarebytes, Inc., the Ninth Circuit reaffirmed a motive-based good-faith limitation on the "Good Samaritan" provision of Section 230. The court held that "providers do not have unfettered discretion to declare online content 'objectionable'" and that "blocking and filtering decisions that are driven by anticompetitive animus are not entitled to immunity under section 230(c)(2)". The Ninth Circuit's decision rejected the argument that Section 230 provides immunity from state intellectual property law claims, aligning with the Third Circuit's interpretation.

The implications of the circuit split between the Third and Ninth Circuits on the scope of Section 230(e)(2) could be significant. An appeal of a case to the Supreme Court would be the first time the high court interprets Section 230. While the broader debate about Section 230 continues, court decisions are shaping the scope of the law and the immunity it provides to online platforms.

California's Journalism Protection Act

California's Journalism Preservation Act (CJPA), introduced by California Assemblymember Buffy Wicks, is a significant piece of legislation aimed at addressing the challenges faced by local news publishers and journalists. The act, also known as AB 886, targets Big Tech platforms, such as Facebook and Google, by requiring them to pay news publishers a "journalism usage fee" when they use local news content alongside advertising. This fee aims to ensure that creators of quality journalism are justly compensated for their work, which often entails significant investments in time and resources.

The CJPA has garnered support from various organizations, including the News/Media Alliance, a nonprofit representing over 2,000 news and magazine media organizations across the United States and globally. The Alliance applauds the introduction of the act, echoing Wicks' sentiment that Big Tech companies have been enriching their platforms with local news content without adequately compensating the original creators. This disparity has hindered news publishers' ability to reinvest in investigative journalism and support their communities with essential news and information.

The CJPA builds on previous efforts, such as the federal version of the JCPA (S. 673 and H.R. 1735), which passed the Senate Judiciary Committee in September 2022 but failed to become law. The California legislation also addresses concerns raised by The NewsGuild-CWA, a union representing unionized journalists and media workers at prominent news organizations in California and beyond. While The NewsGuild-CWA did not initially support the federal JCPA due to a lack of guarantees regarding revenue allocation, they denounced Meta's threat to ban journalism from its services as a coercive tactic to avoid regulation.

California's Journalism Preservation Act is a bold step towards holding Big Tech accountable and ensuring fair compensation for the hard work and value generated by local journalists and news publishers. It remains to be seen whether this act will be enacted into law and what its broader implications will be for the future of journalism and the relationship between Big Tech and the media industry.

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