Appeals Court Says Section 230 Does Not Protect Stubhub From Having To Pay 'Amusement Tax' On Tix Sold

from the limitations dept

A couple years ago, we pointed out what appeared to be a pure money grab by the city of Chicago, demanding that Stubhub pay an extra tax (called an "amusement fee") on sales made by sellers and buyers in that city. As we noted, the original ticket buyer already paid a tax, and resellers themselves should be responsible for paying any additional tax. The district court dismissed the complaint from the city, noting that Section 230 protected it from being liable for actions of users.

However, the appeals court does not agree. While it did not issue a complete ruling -- instead asking the Illinois state supreme court to weigh in on the subject first -- it does (very, very quickly) dismiss the Section 230 safe harbor claim (and instead focuses on other possible defenses). The key part on Section 230:

[Section 230] limits who may be called the publisher of information that appears online. That might matter to liability for defamation, obscenity, or copyright infringement. But Chicago's amusement tax does not depend on who "publishes" any information or is a "speaker". Section 230(c) is irrelevant.

Leaving aside the fact that Section 230 specifically exempts intellectual property law (making it odd to suggest it matters for copyright infringement), this seems like a pretty narrow view of Section 230. The point of Section 230 is to make sure any liability is properly placed on the parties taking action. Saying that it is limited solely to "speaking," ignores the overall point of Section 230. Instead, the court seems to suggest it's entirely reasonable to put third party liability on a company -- especially in cases like Stubhub where it has a specific purpose (such as selling tickets, rather than as a general classifieds site). This seems like an unfortunate and unnecessary limitation on Section 230.

Filed Under: amusement tax, chicago, section 230
Companies: stubhub