Companies To Be Held Liable For Selling To Online Criminals

from the seems-a-bit-extreme dept

One of the reasons why various safe harbor rules exist is to protect parties who really have nothing to do with any kind of law breaking from being liable for the activities of others. Thus, we don't blame an ISP for the activities of one of its users, even if that user breaks the law. That's both reasonable and fair. Those who want to blame those providers often do so just because it's easier -- or, more commonly, because they somehow think it's better for that service provider to somehow act in the role of the police to make things easier. Something similar seems to be happening with the FTC placing the onus on small businesses to make sure they don't sell to online criminals. Slashdot points us to the news that, starting November 1st, all companies are supposed to compare customer info with a "red flag" list of online identity fraudsters and money launderers. Firms that fail to check may be liable if they end up doing business with "known" criminals. You can understand the reasoning here. It certainly makes it a lot easier for the FTC to try to crack down on these crimes. But it adds significant expense and liability to small businesses for potential crimes in which they were totally uninvolved.

Filed Under: ftc, identity fraud, liability, online criminals, red flag, safe harbors
Companies: ftc

Yet Another Online Gripes Site Sued

from the will-hopefully-get-thrown-out-again dept

Time and time again we hear stories of various online "gripes" sites getting sued. Every time it's the same basic story. Some company that some person complained about gets upset about the complaint and sues the site. Of course, in every one of these cases, the lawsuit gets tossed out, because the site itself is protected thanks to CDA section 230 safe harbors that protect the site from liability for content written by users. Yet, the lawsuits just keep on coming. This latest one is a little different. It's been filed by a car dealer against the website ConsumerAffairs.com, which hosts some complaints about his dealership. The dealer has actually sued ConsumerAffairs.com twice before, only to pull both lawsuits right before they were about to be tossed. This time, though, he swears things are different, though it's still not at all clear how he gets around the section 230 issue (answer: he probably doesn't). However, to take the claims a bit further than the usual complaints, he's alleging two points: first that the domain name ConsumerAffairs.com is deceptive in that it confuses users into thinking it is associated with various state government offices of consumer affairs -- making the site seem more "official." He also complains that the site is simply designed as a lead generator for class action lawyers, which the site owner disputes, noting that they make no money from such lawsuits and receives no referral fees. It's difficult to see how either of these issues gets around the core issue, which is that it's still not the site itself that's liable. If the guy wants to sue those who posted the complaints, he could go after them -- but the site itself is immune.

Filed Under: gripes, lawsuits, safe harbors
Companies: consumeraffairs.com

Appeals Court Says Roommates.com Doesn't Qualify For Safe Harbors

from the uh-oh dept

Lots of folks were surprised last year when the 9th Circuit court ruled that Roommates.com didn't qualify for section 230 safe harbors. Section 230 of the CDA, as you hopefully know, protects service providers from the actions of their users, and the ruling last May would potentially limit those protections. Until then, courts had generally interpreted the service provider clause quite broadly (reasonably so, in my opinion). Last fall, the court agreed to ditch the original ruling and rehear the case with an 11 judge panel. While that was happening, in a similar case against Craigslist, the 7th Circuit found that Craigslist was covered by the safe harbors and was not responsible for discriminatory housing posts.

However, it looks like the full panel on the 9th Circuit has decided to buck most other courts on this matter and is siding with the original ruling saying that Roommates.com is not immune from liability for discriminatory postings by its users. The reasoning seems to follow along the lines of the earlier ruling, that Roommates.com gave up its immunity by putting checkboxes and pulldown menus that allowed users to choose discriminatory options -- thus, actively taking part. In fact, the ruling makes it clear that by placing these options and effectively asking discriminatory questions, Roommates.com goes past being a service provider and becomes a content creator itself. Three out of eleven judges disagreed and dissented, claiming that this goes against the basic language of section 230. What's clear is that this issue isn't done yet, and there are going to be a lot more cases coming down the road (and some may target this court, seeing it as more "favorable" to these types of cases).

While it's always a little worrisome when a court tries to limit the coverage of these safe harbors, you can understand where the majority opinion comes from. Roommates.com isn't a neutral party, it claims, because: "Roommate does not merely provide a framework that could be utilized for proper or improper purposes; rather, Roommate’s work in developing the discriminatory questions, discriminatory answers and discriminatory search mechanism is directly related to the alleged illegality of the site." However, the dissenting opinion makes some very good points, noting that the majority seems to mix and match two separate issues: (1) is there discrimination and (2) is Roommates.com liable for any discrimination -- and as such, finds the discrimination (which isn't what the lawsuit was about) and then assigns the blame to Roommates.com. Basically, the dissent is saying that the majority got blinded by the discrimination (without making a legal determination if there really is discrimination) and let that confuse them into assigning liability where it doesn't belong.

Filed Under: cda, discrimination, roommates, safe harbors, section 230
Companies: roommates.com

Author Sues Amazon And eBay For Having Used Copies Of His Books For Sale

from the please-google-first-sale-doctrine dept

Eric Goldman alerts us to yet another ridiculous lawsuit that is likely to be tossed out of court incredibly quickly. In the meantime, though, it's worth looking at, just for the amusement factor. An author (who isn't worth naming here) has sued both eBay and Amazon because used copies of his books are for sale on both sites. He claims that this is a violation of his copyright, and claims that this "piracy" is no different than what the music, movie and software industry faces when they see their products downloaded. Apparently, he's never heard of the first sale doctrine, recognized by both the courts and directly within the law, allowing the legal owner of a copyrighted work to transfer that work to someone else. He also seems to be unfamiliar with the various safe harbors that would protect both eBay and Amazon from the actions of its users. But, to make it even more fun, before filing the lawsuit, he sent letters to the companies asking for half a billion dollars to shut him up. After claiming that he would clearly win a lawsuit leading other authors to sue as well, he literally says in his letter to them: "should I be compensated fairly, I will be as quiet as a church mouse.... I think [a] number in the high seven figures will be fair enough for me to suddenly catch amnesia." If his novel writing is as unsubtle as his legal threat letters, one would be hard pressed to believe that his books sold very much either at full price, or in these "used" sales.

Filed Under: copyright, first sale, safe harbors, used books
Companies: amazon, ebay

Mother And Daughter Still Blame MySpace For Not Protecting Her From Sexual Assault

from the go-after-the-money dept

Two and a half years ago, we wrote about a teenager who sued MySpace following a sexual assault, saying that it was the site's fault that she was assaulted. This despite the fact that she had signed up for the site, lied about her age and the actual assault (obviously) happened outside of MySpace. That's not to say that a crime didn't happen, but it's quite difficult to see how it could possibly be MySpace's fault. In fact, a judge made exactly that point in dismissing the lawsuit last year, noting that MySpace was protected under section 230 safe harbors, and even if it wasn't, it would "cripple" 3rd party communication systems if you could attach liability to them for every crime committed that touched on those services. The judge also pointed out that this seemed like a clear case of a parent trying to blame a big company for her own failings: "If anyone had a duty to protect Julie Doe, it was her parents, not MySpace."

Of course, that's not good enough for the girl and her mother, who have now appealed the case, still claiming that MySpace somehow is responsible. The girl's lawyers claim that MySpace still had a responsibility to protect the girl, even though he doesn't explain how it can protect a girl who lied about her age and then went off to meet with a much older guy in real life. It's difficult to see how that can possibly be MySpace's fault -- but the rule of thumb these days is always sue the big company that has the most money. As for the older guy accused of the sexual assault, he's been indicted, but last we heard, his lawyers were also thinking about blaming MySpace. After all, if the girl is blaming MySpace, then how could it be the guy's fault?

Filed Under: blame, safe harbors, sexual assault
Companies: myspace, news corp

Judge Tosses Out Lawsuit Against Citizen Journalism Site

from the safe-harbors-strike-again dept

Back in November of last year, we wrote about a citizen journalism site in Vermont that was being sued for content posted on the site. As we noted at the time, it seemed quite clear that the site itself was protected by section 230 of the CDA, which provides a safe harbor for sites, preventing them for being liable for content contributed by users. It would appear that a judge agrees and has dismissed the lawsuit, citing the safe harbor provisions of the CDA. Another victory for falsely blamed sites.

Filed Under: cda, citizen journalism, safe harbors
Companies: ibrattleboro

If It's On The Internet... Blame The Service Provider (Especially If It's Craigslist)

from the logical-difficulties dept

There's a jokey saying that people like to spout when they hear stories of people believing the most ridiculous things found on the internet: "If it's on the internet, it must be true." That saying certainly showed up in the story earlier this week about people ransacking and looting a house in Oregon after someone put up a post on Craigslist saying that the house had been abandoned and everything was free for the taking. When the owner came back to the house telling people to stop, they pointed to the Craigslist ad as "proof" that they could continue their looting. Hence, "if it's on the internet, it must be true."

However, in the aftermath of this event (which is actually a copycat from a similar event nearly a year ago), we're seeing a different, but perhaps equally as common, fallacy come out: If it's on the internet, blame the service provider, rather than those actually responsible (okay, it's not quite as pithy). This seems especially true when it comes to Craigslist. Remember, Craigslist has been blamed for discriminatory posts as well as many other illegal things found on the site... including child prostitution. It's not just Craigslist, of course, but for some reason it's extra common with the site. So, it should come as no surprise to already see some asking if Craigslist should be responsible.

I'm trying to figure out why so many people gravitate towards blaming the service provider, rather than whoever was actually responsible for the crime (in this case, the guy who posted the claim as well as the people who stole stuff form the guy). There are three potential thoughts that come to mind. The first is that they go after the service provider because that's easier. Fortunately, the law isn't supposed to attack the easiest target, but who's actually responsible. The second is what I like to call The Steve Dallas defense after an old, old, old Bloom County cartoon where lawyer Steve Dallas explains why he's suing Nikon after Sean Penn beat him up for taking a paparazzi photo. It can be summarized as: just blame whoever has the most money. The third option might really just be a repeat of the first, but it's that people still see the internet as new and confusing, and find that it's too complicated to parse out the nuances of the different roles of different players online. So in trying to parcel out blame, they work backwards to the first recognizable player.

People would never blame the telephone company for an extortion scam using the telephone. And they wouldn't blame Ford for making a getaway car used in a bank heist. Yet, they want to blame Craigslist for one of many postings on the site? If a crime happens on the internet... blame the service provider.

Filed Under: accountability, blame, craigslist, liability, safe harbors
Companies: craigslist

Does Truth In Advertising Still Apply To User Generated Ads?

from the legal-permutations dept

From a purely academic standpoint, it really is fun to see how modern technology is making life difficult for those who rely on old and potentially obsolete laws. However, the decisions made concerning these laws may have a pretty wide impact. We've discussed in the past the pitfalls of asking fans to create "user-generated" ads, but a new lawsuit raises a very interesting legal question. If you ask people to make their own ads for your product, how do truth in advertising laws apply? It's probably not much of an issue if fans are simply going out and creating an ad for fun on their own -- but what if you encourage it? Plenty of big name brands have been setting up contests, getting people to create commercials for them. Yet, when sub shop chain Quiznos did that, competitor Subway sued them, claiming that many of the ads made exaggerated in false claims about Subway's sandwiches. Quiznos, for its part, claims that thanks to the safe harbors of the Communications Decency Act, it's not liable for the content created by the participants in the contest. Subway, on the other hand, argues that by encouraging such actions with a contest, Quiznos has overstepped the boundary, and violated its trademarks. While you can see the reasoning behind Subway's argument, it's hard not to side with Quiznos on this one. No one is going to take most of the user-generated ads seriously -- knowing that they're designed to poke fun at Subway. Also, any attempt to expand "truth in advertising" type rules to fan-created ads is going to cause all sorts of unnecessary problems. Still, when politicians were first writing up trademark laws and truth-in-advertising laws, I'd imagine the possibility of user-generated advertisements never even crossed their minds.

Filed Under: advertising, safe harbors, truth in advertising, user generated content
Companies: quiznos, subway

What's The Liability For A Service Provider Who Ignores Takedown Notices?

from the we-may-be-about-to-find-out dept

We've gone on at length over the years concerning safe harbors for online service providers, noting that service providers shouldn't (and usually don't, under the law) have liability for illegal actions performed by users of the service. However, many of the safe harbors that provide that protection make it clear that should the service providers be informed of illegal activities, the service providers need to take action to avoid becoming liable. However, if the service providers don't take action, what is their liability? We may soon find out, thanks to a new lawsuit involving eBay and the maker of of dollhouse furniture, Hansson. Hansson is upset that someone else is selling dollhouse furniture on eBay using Hansson's trademark. While, at first, this might sound like other such lawsuits against eBay for counterfeit goods, this case is different in a few important ways. First, Hansson actually is suing the company who is selling the counterfeit doll furniture. Second, while it is suing eBay, that's only because Hansson claims that the company sent eBay eight takedown notices and a cease-and-desist letter -- all of which were ignored. So, the question now becomes what kind of liability eBay faces if it's found that the company ignored the various notifications about infringing goods on the site. Eric Goldman, who wrote the story at the link above wonders why eBay would ignore all those notifications, but also questions whether or not it's wise on Hansson's part to drag eBay into the lawsuit just to get its attention. As he says, Hansson may get more of eBay's attention than it really wanted.

Filed Under: safe harbors, service providers, takedown notices, trademark
Companies: ebay, hansson

Supreme Court Tells Perfect 10 It Can't Blame Payment Processors For Copyright Infringement

from the let-me-explain-to-you-the-concept-of-safe-harbor dept

Perfect 10 was an "adult" magazine publisher who had trouble adjusting to the massive change in the market called "the internet," and has since gone on a rampage suing just about everyone for copyright infringement -- though, amusingly, it almost never seems to target those actually responsible for copyright infringement. The issue is that people took scans of images from Perfect 10's magazines and put them online. That is, without a doubt, copyright infringement. No one denies that. But there's no money in suing individual random people, so Perfect 10 went after those with money, starting with Google. Why Google? Well, because Google's image search results would show thumbnails of the images it found (though, of course, Google had no way of knowing they were infringing). Courts have ruled that simply showing a thumbnail in a search result is not infringement, so Perfect 10 contorted to make the case even more confusing, by saying it was the combination of the thumbnails and the fact that many of the sites hosting the scanned images showed Google Ads that was the problem. Luckily, after a lower court agreed with Perfect 10, the appeals court overturned the ruling. Despite this, Perfect 10 has gone on to sue others, including Microsoft with nearly identical charges to the Google case.

Even worse, Perfect 10 then tried to sue anyone who processed payments for the sites that hosted the infringing images, claiming that they were liable for copyright infringement as well. Of course, as is clearly stated in the law, and well supported in the case law, a service provider is not responsible for what its users do. Everyone knows this by now, but it didn't stop Perfect 10 who got slapped down in the lower courts, at the appeals court and now (finally) at the Supreme Court. Yes, the Supreme Court had to waste it's time deciding whether or not to take this case and wisely turned it down. At some point you would think that the folks at Perfect 10 would stop trying to sue everyone and start focusing on maybe changing its business model. Or is that too difficult?

Filed Under: copyright infringement, safe harbors, supreme court
Companies: perfect 10