FTC Commissioners Are Upset About Section 230; Though It's Not At All Clear Why

from the guys,-really? dept

Another day, another bunch of nonsense about Section 230 of the Communications Decency Act. The Senate Commerce Committee held an FTC oversight hearing yesterday, with all five commissioners attending via video conference (kudos to Commissioner Rebecca Slaughter who attended with her baby strapped to her -- setting a great example for so many working parents who are struggling with working from home while also having to manage childcare duties!). Section 230 came up a few times, though I'm perplexed as to why.

Senator Thune, who sponsored the problematic PACT Act that would remove Section 230 immunity for civil actions brought by the federal government, asked a leading question to FTC Chair, Joe Simons, that was basically "wouldn't the PACT Act be great?" and Simons responded oddly about how 230 was somehow blocking their enforcement actions (which is just not true).

Senator Thune: Chairman Simons, as you know, reforming Section 230 of the Communications Decency Act has been hotly debated here in Congress. Section 230 is the law that prevents social media platforms, like Facebook and Twitter, from being sued for content that users post on their platforms. I've introduced a bi-partisan bill with Senator Schatz on this issue, known as the Platform Accountability and Consumer Transparency Act (the PACT Act), which among other things would stipulate that the immunity provided by Section 230 does not apply to civil enforcement actions brought by the federal government. The DOJ recommended this particular provision in its recently published list of recommendations for reforming Section 230. My question is how would consumer benefit from reforming Section 230 to ensure that the immunity provided by Section 230 does not apply to civil enforcement actions brought by the federal government, such as the FTC.

Simons: Thank you Senator. So we have a number of instances... it's actually fairly common for us to go into court and have a defense put on us relating to Section 230. So, it would be very helpful for us to avoid having to deal with that and allow us the ability to go not only after the platform participants, but, in the right circumstances, the platform itself.

There are so many issues with this. 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.

Meanwhile, it's not clear there's a real split among Commissioners. Simons, the chair, is a Republican. Commissioner Rohit Chopra was also asked about Section 230 and also gave a bizarre answer. This was in response to some questions asked by Senator Wicker (who went on a bizarrely uninformed anti-Section 230 floor rant earlier this week). He first asked Simons about whether or not the FTC had a role in enforcing Section 230, and also about doing anything in regards to the President's executive order on 230. Unlike FCC chair Ajit Pai, who caved in to the President's unconstitutional order and started an inquiry, Simons at least pointed out that (despite what the executive order says about the FTC) he sees no role for it:

Wicker: Let's talk about the FTC's role in overseeing the enforcement of Section 230 of the Communications Decency Act, and in particular, President Trump's Executive Order in May, on preventing online censorship. Specifically, section four of this order calls on the FTC to take action against online platforms that restrict speech in a manner inconsistent with their terms of service. What is your view, Mr. Chairman, on the FTC's responsibilities under the executive order? And have you seen any examples of the behavior described in the order and taken any action under your authority so far?

Simons: Thank you, Mr. Chairman. We haven't taken any action according to the executive order. We get complaints from a wide variety of sources. From the public, from Congress, from competitors, from people in industry, from consumer watchdogs. And it's very important that we get those complaints and we pay attention to them. Lots of complaints have come from members of this Committee, and we're very thankful to them that you provide us with such thoughtful complaints.

We're an independent agency so we review all of them independently. We have jurisdiction over commercial speech -- particularly on deceptive and unfair and then some other statutes. So we look to see whether the complaints are subject to unfairness... or whether they're within our authority as I described. Our authority focuses on commercial speech, not political content curation.

If we see complaints that are not within our jurisdiction, then we don’t do anything. If we see complaints that are, we take a closer look, and figure out whether there's a violation. And then we determine whether it's appropriate for us to act.

Wicker: So you don't view political speech as within your jurisdiction?

Simons: Correct.

Wicker: So if the public and members of the Senate are concerned about online platforms like Twitter and Facebook being inconsistent in the way they restrict political speech, you do not view that as within the purview of your statutory responsibilities. And therefore, the executive order does not instruct you in that specific area? Is that correct?

Simons: Yes. For political content curation. Yes.

This line of questioning was already silly enough, but at least, unlike Pai, Simons was willing to say "hey, that's outside of our jurisdiction." But Wicker's line of question is silly in its own way. There's no legal requirement that platforms treat different political speech equally. And it would violate the 1st Amendment if the law did.

From there, though Wicker goes on to one of the Democratic Commissioners, Chopra, who also doesn't seem to like 230 either.

Chopra: Putting aside the executive order, the issue of Section 230 is one where... of great concern, and I think there's growing bipartisan consensus that it has been abused. We see, whether it comes to counterfeit and defective goods, and the unlevel playing field between online platforms and brick and mortar stores. And in general, I think the scrutiny is warranted when it comes to technology platforms abusing any liabilities and public privileges, and using that as regulatory arbitrage.

I think many of these platforms do have too much power to dictate certain policies and regulations, and I don't want to see them continue, in my view, to overuse and abuse the legal immunities that Congress has provided, and I think we need to take a hard look at that. Particularly when it comes to the use of surveillance-based behavioral advertising. I think that business model is inconsistent with the origins of Section 230. Section 230 is supposed to safeguard and promote speech. It's not supposed to prioritize certain types of things over others based on what makes those companies more money.

This is also wrong and misguided on many points. 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.

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Filed Under: civil enforcement, counterfeits, ftc, intermediary liability, joe simons, john thune, oversight, pact act, roger wicker, rohit chopra, section 230