The Big Story: Global governments complicate content moderation
This week, governments across the globe zeroed in on how companies treat user content online, with several countries advancing policies that would make content hosting and moderation more difficult for Internet companies and hinder free expression online.
In Brazil, President Jair Bolsonaro is attempting to undermine the legitimacy of an upcoming election by temporarily prohibiting social media companies from removing certain content that violates the companies’ rules. The new rules allow removal of a narrow subset of harmful content—including content containing violence and content encouraging crime—but they require companies to get a court order to remove any other content, including misinformation about the pandemic and the election, and allows the government to force the companies to reinstate removed content. The ban comes as Bolsonaro faces unflattering polling and scrutiny over his own use of social media.
In Australia, the country’s highest court ruled this week that Facebook users can be treated as the publishers of—and held responsible for—defamatory comments made by other users under their posts. The ruling stems from a case against several news organizations over defamatory comments left by Facebook users on the news organizations’ Facebook posts about their coverage of abuse at Australian youth detention centers. The court ruled that because the news organizations had created the Facebook posts, which attracted the comments, the news organizations should be responsible for others’ comments.
And in London this week, ministers from G7 countries gathered to discuss a wide range of issues, including strategies for handling harmful online content. U.K. Home Secretary Priti Patel pushed officials to increase the pressure on tech companies to combat harmful content, and she announced a new fund to award more than half a million dollars to organizations building technological solutions “to keep children safe in environments such as online messaging platforms with end-to-end encryption.” Patel has been a vocal critic of tech companies’ move to protect user data with encryption, citing a need to protect children. Additionally, the U.K. released its Online Safety Bill earlier this year. It’s aimed at harmful content, including child exploitation, but it risks burdening startups and harming free expression online.
These developments create severe penalties and increase legal uncertainty, ultimately erecting barriers to trade for companies, including startups, that host user content around the world. Startups need balanced, certain intermediary liability frameworks to grow and succeed, especially as they look to operate abroad.
Policy Roundup:
Controversial Texas Bill advances targeting social media companies content moderation practices. This week, Texas enacted a law that, among other things, prohibits Internet companies from moderating content based on the user’s “viewpoint” in an attempt to combat supposed anti-conservative bias online. The bill would also require companies with more than 50 million users per month to produce regular reports about their content moderation efforts and to remove illegal content within 48 hours. The bill is similar to a Florida law that was blocked earlier this year in federal court.
FTC to hold open meeting next week on tech deals. Next Wednesday, the Federal Trade Commission will hold an open meeting to discuss several items, including findings of an FTC staff report on acquisitions by “select technology platforms” that were not large enough to require premerger notice under the Hart-Scott-Rodino Act and whether to retract a 2020 policy statement on vertical mergers. As we’ve noted, acquisitions broadly are a beneficial part of the startup ecosystem, especially in startup ecosystems outside of places like Silicon Valley.
California bill on NDAs, leader for tech ecosystem. The Silenced No More Act, recently passed by the California legislature, is awaiting signature at Gov. Newsom’s desk. The bill would prohibit companies from using non-disclosure provisions in employment agreements that keep workers from disclosing workplace discrimination and harassment, expanding pre-existing protections. In a recent blog, we explored what this step could mean for diversity and inclusion in the tech startup ecosystem.
Bill proposes re-focusing ITC on domestic IP interests. A bill introduced this week by Reps. Suzan DelBene (D-Wa.) and David Schweikert (R-Ariz.) would modernize the current International Trade Commission (ITC) with a focus on domestic industries. The ITC is designed to protect domestic innovators against unfair foreign competition, so if it finds a foreign company is infringing the patent of a domestic competitor, it can block importation of infringing goods. But more recently, patent assertion entities (so-called “patent trolls”)—including foreign entities—have also found ways to bring cases in the ITC. This new legislation would clarify what counts as a “domestic industry” for the purposes of the ITC and reaffirm the Commission’s public interest obligations. These reforms will help ensure that the ITC remains focused on its role to protect domestic industry and does not become a forum for abusive litigants to merely pull resources away from U.S. innovators, manufacturers, and job-creators..
Startup Roundup:
#StartupsEverywhere: New York City, New York. Fund Black Founders is a crowdfunding platform dedicated to narrowing the racial capital access gap by connecting Black founders with the financial and community resources they need. Founder & CEO, Renee King is focused on building an organization that can provide a necessary “Family & Friends” funding round for founders who would otherwise lack access to such capital. We spoke with Ms. King about what led her to build Fund Black Founders, the importance of access to early stage funding for Black founders, and how government agencies can make existing resources more accessible to emerging entrepreneurs.
