Department of Justice proposal would limit tech's liability shield

The Department of Justice is taking aim at tech’s liability shield with a new set of legislative proposals. The proposed reforms are the latest action aiming to weaken legal protection established through a 1990s law known as Section 230, which protects online platforms from being held liable for content their users’ post on their sites. CNBC's Ylan Mui reports.

The Department of Justice is taking aim at tech’s liability shield with a new set of legislative proposals released on Wednesday.

The proposed reforms are the latest action aiming to weaken legal protection established through Section 230 of the Communications Decency Act, a 1990s-era law. The statute protects online platforms, such as Facebook, Twitter and Google’s YouTube, from being held liable for content their users post on their sites, and also allows them to moderate content in good faith.

The DOJ’s proposed reforms, which would have to be passed by Congress to go into effect, would limit the broad protections Section 230 typically provides to the tech industry.

Platforms could lose immunity if they facilitate or solicit federal criminal activity, like trafficking illicit drugs. It would also create carve-outs for child exploitation, terrorism and cyberstalking, holding tech companies accountable for taking action on such content.

The proposal also would make clear that Section 230 protections cannot be used to dispute antitrust claims, a significant statement as the Justice Department is reportedly preparing an antitrust suit against Google for as soon as this summer. Facebook has also disclosed an antitrust investigation by the Federal Trade Commission.

“Changing significantly ... the balance of responsibilities and provisions about liability in Section 230 would, in our view, mean less speech of all kinds appearing online,” said Nick Clegg, Facebook’s vice president of global affairs and communications, in a call with reporters on Wednesday afternoon.

It’s unclear how much support the proposals will gain in Congress. Both Republicans and Democrats have argued that Section 230, which was initially envisioned as a way to protect upstart tech companies from a deluge of lawsuits, now appears outdated as it protects powerful companies worth hundreds of billions of dollars.

But while Democratic concerns have focused more on holding companies accountable for keeping users safe, Republicans have also placed emphasis on alleged censorship of conservative voices. Tech companies have repeatedly denied that they censor political speech, but instances where they have removed posts in error have fueled such criticism.

Sen. Mark Warner, D-Va., a former venture capitalist and a frequent critic of Section 230, said in a statement to CNBC that he is wary of reforms brought by the Trump administration.

“While I believe reform of this outdated law is needed, I have serious concerns that under the supervision of Attorney General Barr this effort has been politicized and will be used by the Trump Administration to cow platforms into allowing Trump, dark money groups, and right-wing militias to continue to exploit their tools to sow disinformation, engage in targeted harassment, and suppress voter participation,” Warner said.

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