Online companies of all sizes rely on Section 230 to host and moderate user-generated content without the fear of being subjected to crippling lawsuits, and undermining this bedrock Internet law would disproportionately affect early-stage startups.
That’s why it’s so troubling that the Trump administration is moving to open up liability for online companies that host user content. This week, the Federal Communications Commission (FCC) accepted the first round of public comments in response to a petition from the Commerce Department laying out proposed changes to Section 230. That petition stemmed from President Donald Trump’s May 28th executive order on “preventing online censorship,” which pushed federal agencies to reexamine the law in several ways.
In response to the Commerce Department’s petition for rulemaking, Engine submitted comments to the FCC highlighting the petition’s inaccurate claims about Section 230 and the effect it has on innovation and competition in the Internet ecosystem. Contrary to the petition’s claims, Section 230 is what enables new and small Internet platforms to enter the market and compete. Changing the law—especially as envisioned by the petition, which fails to provide any credible evidence that such changes are necessary—will make it harder for startups to compete.
As we explain in our comments, the petition “relies on ahistorical reinterpretations of Congress’s intent in passing 230, debunked conspiracies about alleged political bias amongst social media companies, and economically illiterate theories of startup competition to paper over its true motivation: to punish platforms over political grievances.”
The petition also dramatically misunderstands the state of today’s Internet ecosystem by reducing the entire Internet to a handful of big companies. In reality, the Internet ecosystem is made up of thousands of small, nascent startups that depend upon Section 230 in order to grow, innovate, and compete against more established competitors. And, as we pointed out in our comments, user-generated content is ubiquitous across a wide range of digital platforms: “From file sharing services, to e-commerce websites with third-party sellers, to comment sections across the Internet, Section 230 enables all kinds of platforms to host all kinds of user communities creating all kinds of content.”
Changing this bedrock law, however, would cause irreparable harm to emerging digital platforms. It could cost a nascent startup tens of thousands of dollars in legal fees to defend against a meritless lawsuit, even if the suit is dismissed during its earliest stages. By removing these liability limitations, platforms could have to spend hundreds of thousands of dollars per lawsuit—creating a situation where only the largest, most financially secure firms can operate.
Instead of relying on politically-motivated attacks that are devoid of empirical evidence to radically change the Internet ecosystem, policymakers need to carefully review how any changes to Section 230 would hinder competition, harm innovation, and chill startup growth. If the Trump administration, federal officials, and policymakers are truly considered about promoting digital competition and the free flow of ideas, then they should protect Section 230 in order to bolster the law that has allowed user-generated content and speech to exist online.
You can read our full comments on the NTIA’s petition for rulemaking here.
