Section 230 helps startups, not just big tech

Engine
Engine
Jul 2 · 3 min read

A common misconception about Section 230 of the Communications Decency Act — including in recent comments from Sen. Josh Hawley (R-Mo.) — is that the law gives an unfair advantage to tech giants that no longer need protection from government intervention. The law does provide legal protections for Internet platforms, but it’s not the tech giants that need them the most.

We already know that platforms face expensive and time consuming lawsuits over their users’ speech if they’re not protected by Section 230. As was noted in a recent Wall Street Journal op-ed, Congress created Section 230 of the Communications Decency Act after Prodigy, formerly an online service, was held liable for the defamatory speech of one of its users in 1995. The key language of the provision was simple but powerful: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Section 230 also allows online platforms to restrict content as they see fit, “whether or not such material is constitutionally protected.” Combined, these protections shield online platforms from a potential hurricane of litigation that could cost startups tens of thousands of dollars in legal fees to defend against meritless lawsuits. While large companies may be able to afford the cost of defense, for a small company, having to litigate just one case could lead to bankruptcy, even if it ultimately wins. By ensuring the platforms can get off the ground with the threat of crippling legal fees, the law spurred an explosion of competition that allowed new and better online players to emerge.

As the Ninth Circuit noted in a 2008 ruling in the Fair Housing Councils of San Fernando Valley v. Roommates.com case, without Section 230, Internet platforms were likely to face a “death by ten thousand duck-bites” as a result of lawsuits. It’s hard for market competitors to emerge when they’re likely to be snuffed out from the very start.

Eric Goldman, a professor at Santa Clara University School of Law, highlighted many of the pro-competition aspects of Section 230 in a recent paper, noting that “Section 230 is an essential piece to ensure that future Google- and Facebook-killers have a chance of emerging.”

“Virtually every major Internet service depends on Section 230 heavily to acquire, curate, and disseminate third-party content; and many of us engage with those services many times an hour. As a result, Section 230-protected services have generated an extraordinary amount of private and social economic benefits,” he wrote. “…[E]ven as Section 230 privileges the Internet giants, it also plants the seeds of their future destruction.”

Critics of Section 230 also like to claim that the provision allows large platforms to dominate the industry. But, time and time again, we’ve seen startups rise up to compete with some or all of a tech giant’s business model.

Startups have thrived because of Section 230 protections, not in spite of them. A system that promotes digital growth for all platforms, of all sizes, should not be scaled back simply because of a misguided belief that it will limit the dominance of a few select companies. Revoking these critically important protections would only serve to further solidify the dominance of existing tech giants, instead of allowing the next generation of tech companies and innovators to emerge.


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Engine is the voice of startups in government. We are a nonprofit that supports entrepreneurship through economic research, policy analysis, and advocacy.