E-Commerce Law Week, Issue 432

CDA Immunity Prevails Again, But Should ISPs Begin to Worry?

Doctors are some of the most shameless tellers of lawyer jokes and other statements critical of our noble profession. But they don't seem to enjoy the taste of their own medicine. Unfortunately for them -- and anyone else who feels he's the victim of online defamation -- section 230(c)(1) of the Communications Decency Act (CDA) affords immunity to anyone who posts defamatory statements on the Internet, as long as the statement was originally provided by someone else. So the California Supreme Court recently ruled in Barrett v. Rosenthal. The court's decision reaffirms the broad interpretation given to section 230(c)(1) by a long line of judicial decisions. The California high court also made clear, apparently in the first ruling on the issue, that section 230 immunity applies not just to Internet service providers and websites, but also to individual Internet "users" who post content originally created by someone else. But the court did express some discomfort with its own broad interpretation of section 230 and the free rein it gives to online defamers. That alone should temper the celebration by ISPs and others over their apparent victory in this case. More importantly, if individual users begin taking advantage of CDA immunity to post all manner of objectionable content created by someone else, courts may reconsider the way they've interpreted section 230(c)(1) and start cutting back on the immunity available to both users and providers. And that would not be something ISPs would cheer about.

Court Finds Craigslist Immune from Fair Housing Suit

In another CDA case, Chicago Lawyers' Committee for Civil Rights Under the Law, Inc. v. Craigslist Inc., a federal court in Illinois held that section 230(c)(1) protects Craigslist against a suit alleging that it publishes discriminatory housing advertisements, in violation of the Fair Housing Act (FHA).  The clear words of section 3604(c) of the FHA -- making it unlawful to "make, print or publish" discriminatory housing ads -- and the strong public policy goals behind that prohibition appeared to create a real test for the CDA's sweeping immunity provision.  But in the end the court had no trouble finding that CDA immunity was available to Craiglist.  Still, the court's somewhat confused opinion -- and the fact that the Seventh Circuit has previously questioned the scope of CDA immunity in Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003) -- make this case worth watching very closely on appeal.

Who Will Secure the Security Professionals?

This modern-day take on Roman satirist Juvenal's old saw ("Quis custodiet ipsos custodes?" or "Who will watch the watchmen?") has a modern-day answer:  the Federal Trade Commission.  The FTC announced on November 16 that data breach response specialist Guidance Software Inc. had settled charges that it had failed to provide "reasonable and appropriate security" for personal information stored on its corporate network, in violation of the "deceptive acts or practices" provision of the FTC Act.  Although Guidance admitted no wrongdoing, it agreed to cease misrepresenting its security policies, implement a comprehensive information security program, and submit to 10 years of FTC oversight.  The settlement should again remind companies that, in the opinion of the Commission, the broad language of the FTC Act provides ample basis for regulating corporate data security.

Court Erects Another Hurdle for Unmasking Anonymous Online Posters

Some courts have begun to require plaintiffs to pass a relatively strict test in order to serve subpoenas on Internet service providers and others to reveal the identity of someone who has posted allegedly defamatory material online.  The same standard could apply to other forms of anonymous speech, such as leaks of company proprietary information.   As we've previously reported, courts in two recent cases (Doe v. Cahill and Best Western International, Inc. v. John Doe) have held that plaintiffs must pass the "summary judgment" standard, making out a prima facie case of defamation before being permitted to subpoena ISPs for information identifying a John Doe defendant.  In McMann v. John Doe, a federal court in Massachusetts set another obstacle in the path of defamation plaintiffs, holding that federal courts lack diversity jurisdiction where the sole defendant is anonymous.  Moreover, although the court went on to criticize the summary judgment standard as too strict, it acknowledged the need to screen subpoena requests in John Doe cases in order to protect the free speech rights of anonymous speakers.  This ruling thus bolsters the trend of courts' making it more difficult for companies and individuals to identify online posters of damaging content.

Riding the Frontier Between European Principles and the Internet

The last few weeks have seen a number of important developments in the European debate over revision of the “Television without Frontiers” (TVWF) Directive (89/552) for the Internet era.  At a meeting on November 13, the EU Council of Ministers adopted a compromise draft of a new TVWF Directive.  The draft preserves the distinction between "linear" audiovisual services (i.e.,  those transmitted on a defined schedule) and "non-linear" audiovisual service (i.e., "on-demand" services that are transmitted at a time chosen by the consumer, like the vast majority of Internet services).  The proposed restrictions applicable to non-linear services are much more limited than those applicable to linear services, but the regulation of non-linear proposed by the Council is far from inconsequential.  On the same day that the Council adopted its proposed draft, the Culture Committee of the European Parliament adopted a lengthy report addressing many of the same issues.  The inevitable effect of a TVWF Directive bearing more than a passing resemblance to the draft now being debated will be at least a moderately complex set of new regulatory requirements for online service providers in Europe.  European companies are already hard to find among the leading global providers of Internet-based services (with the notable exception of Skype, now owned by eBay), and by making it even more difficult for European players, the TVWF Directive may actually have the reverse of its intended goal of promoting European culture online.

Questions and comments about E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.