Startups, Not Big Tech, Benefit the Most from Section 230
TLDR: A Senate panel is preparing to hold a hearing tomorrow with the CEOs of Facebook, Google, and Twitter to discuss Section 230 and allegations of political bias by big tech firms. Although Section 230 has drawn scrutiny from policymakers because of the actions of large Internet companies, the law allows platforms of all sizes to host user content and engage in content moderation without the fear of potentially crippling lawsuits. Any changes to the law will have an outsized impact on the U.S. startup ecosystem.
What’s Happening This Week: Members of the Senate Commerce Committee are holding a hearing tomorrow with Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Twitter CEO Jack Dorsey to discuss Section 230 and content moderation through the lens of big tech and alleged online censorship. Policymakers voted earlier this month to subpoena the three CEOs to testify before the panel in order to “receive a full accounting from the heads of these companies about their content moderation practices,” according to Committee Chairman Roger Wicker (R-Miss.).
The hearing—less than a week before Election Day—comes as the White House and some Republican policymakers continue to amplify unfounded claims of anti-conservative censorship by large platforms in order to call for reforms to Section 230, the bedrock Internet law that provides online companies of all sizes with the liability limitations needed to host and moderate user-generated content.
Last week, GOP members of the Senate Judiciary Committee voted to subpoena Facebook CEO Mark Zuckerberg and Twitter CEO Jack Dorsey to testify before the panel about the “suppression and/or censorship” of controversial New York Post articles about Democratic presidential nominee Joe Biden’s son. The platforms’ decision to initially moderate the articles led to renewed calls from President Donald Trump and other Republican lawmakers to repeal Section 230. President Trump issued an executive order on “preventing online censorship” in May that directed federal agencies, including the Federal Communications Commission, to examine Section 230’s liability limitations. FCC Chairman Ajit Pai announced earlier this month that the agency will move forward with the Trump administration’s petition to review Section 230, despite the petition’s many unsubstantiated claims, including a fundamentally flawed understanding of the role of Section 230 in promoting competition online.
Why it Matters to Startups: Although policymakers are scrutinizing Section 230 because of allegations about the content moderation practices of large Internet companies, repealing the law would have an outsized impact on U.S. startups that host and moderate user content. Instead of viewing Section 230 as simply a big tech issue, policymakers need to understand how changing or repealing the law would drastically affect the entire Internet ecosystem and the ability of new and small- and medium-sized platforms to compete.
Section 230 allows early-stage startups that rely on user-generated content to attract investment, launch, and grow by providing them with the ability to host and moderate content in a way that best serves their users and minimizes the threat of ruinous litigation. While Congress continues to focus on the moderation practices of large online companies—like Facebook, Google, and Twitter—Section 230 is what allows for every e-commerce platform, comment section, review site, file-sharing service, and more to exist. As Congress, the Trump administration, and other policymakers continue to express concerns about competition in the digital marketplace, it would be foolish for them to change the law that allows early-stage platforms to compete against more established competitors.
WIthout the legal framework created by Section 230, any Internet platform that hosts user-generated content could easily get sued out of existence, even if they’re following the law and acting in the best interest of their community of users. Even with Section 230’s liability limitations, an Internet company can still spend tens of thousands of dollars to get a meritless lawsuit over user content dismissed in the early stages. Without Section 230’s liability limitations, that cost shoots into the hundreds of thousands of dollars. That’s critical when considering changes to Section 230 to address alleged anti-conservative bias, since changing the law can’t legally force companies to host content they might otherwise moderate; it would just make it more expensive to get those lawsuits over those moderation decisions dismissed, effectively using private litigation to bully platforms into hosting certain speech. If Section 230 is dramatically changed or repealed, only the companies that can afford to fend off lawsuits—or even the threat of lawsuits—will be able to exist, effectively shutting the door to new and small Internet platforms.
Content moderation is a difficult task for even the largest online companies. It’s almost impossible for startups and other smaller platforms on bootstrap budgets to hire armies of content moderators or purchase expensive and technically limited content moderation tools. Section 230 protects the growth of these firms by giving them the ability to moderate user content in a way that best serves their users and their operational capabilities, while also minimizing the risk of potentially devastating lawsuits.
In the middle of a pandemic and a presidential election, Internet platforms have been put in an almost unwinnable situation. Some lawmakers are pushing for even more moderation of content, while other lawmakers claim that companies are censoring their users. Both sides of the aisle, unhappy with the largest tech companies, seem eager to threaten major reforms to a law that supports the entire ecosystem of user-generated content online. If lawmakers are truly concerned about combating harmful online content, supporting digital competition, and protecting Internet users, then they should work with the Internet industry—and especially the startup community—to address real problems without undermining Section 230’s liability framework.
On the Horizon.
The Federal Communications Commission is holding its monthly public meeting at 10:30 a.m. today. The meeting will include a vote on issues raised by the FCC’s 2017 decision to repeal the net neutrality protections.
Silicon Flatirons and CableLabs are holding a virtual discussion about the digital divide in the time of COVID-19 tomorrow at 11 a.m. MT.
TheBridge and All Tech is Human are holding a virtual panel this Thursday at 1 p.m. on social media’s role in the 2020 presidential election.
