CEI's C:SPIN - Liability Limits Online

[Dave Farber <dave () farber net>]

> From: "Hanah Metchis" <hmetchis () cei org>
> Reply-To: "Hanah Metchis" <hmetchis () cei org>
> To: <farber () cis upenn edu>
>
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> CEI C:\SPIN
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> This issue:  What if They Gave a Lawsuit and Nobody Came?
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> This week's c:\spin is by <http://cei.org/dyn/view_bio.cfm/163>Solveig 
> Singleton, Senior Policy Analyst, CEI, August 4, 2003.
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> With copyright lawsuits against college students and Digital Millennium 
> Copyright Act (DMCA) suits against programmers, a fair amount of attention 
> paid to the issue of who is liable online. The other side of this is the 
> question of 
> <http://www.stoel.com/resources/articles/ebusiness/ebiz_009.shtm>who is 
> not liable online for defamation or copyright wrongs. We assume that 
> Internet Service Providers (ISPs) won’t and shouldn’t often be liable for 
> users’ ill-considered posting, to keep carriers friendly to spontaneous 
> postings of the masses. But the category of the not-liable has been growing.
>
>
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> The Communications Decency Act created a “safe harbor” from being treated 
> as publishers of defamatory content­but only for providers of "interactive 
> computer service," not content providers. The DMCA offers a copyright 
> liability limit for "a provider of online services or network access" who 
> complies with notice and take-down provisions. And the case law of 
> indirect copyright liability has implicit limits; roughly speaking, 
> without control there is no liability.
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> This, so far, is in line with earlier law regarding neutral mass carriers, 
> who are not expected to police message content­much. The phone company 
> might be asked to disconnect a phone number used to place illegal bets, 
> for example, but won’t be sued for the role its equipment played in gambling
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> Strictly speaking, the only Internet carriers are ISPs, such as Earthlink. 
> But nowadays, the liability limits and the logic underlying them are 
> expanded to other types of Internet companies.  Courts also apply the 
> limits to those offering controlled content as well as pure carriage, like 
> AOL. And to <http://news.com.com/2100-1018_3-999849.html?tag=lh>Ebay­a web 
> site that carries messages from the masses, but within a rigorous 
> structure. And Amazon.com, a web site with much content produced by 
> Amazon.com, has also 
> <http://www.phillipsnizer.com/library/topics/defamation_cda.cfm>availed 
> itself of the limits and has just done so 
> <http://www.guardian.co.uk/uk_news/story/0,3604,977366,00.html>again; it 
> can’t be expected to police spontaneous postings any more than Ebay or AOL 
> can, and provides no less desirable a service. So the question of whether 
> liability limits apply is raised with any web site, newsgroup, Usenet 
> server host, list sponsor or moderator, chat room host, and so on.
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> The universe of liability is also shrinking because of software products 
> tailor-made to escape it. Napster was liable, but Gnutella avoid 
> centralized functions and is <http://news.com.com/2100-1027-998363.html>not.
>
>
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> The bottom line: Many online “hosts” can avoid liability for guest’s 
> conduct. The liability of any but direct offenders is doubtful. And this 
> is good, if we value the spontaneity of the online world. But the heavily 
> lobbied and sometimes technically inept legislature as much as the courts 
> now defines limits, potentially with strange consequences. And the limits 
> are not unproblematic for everyone.
>
>
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> Liability limits leave groups like the RIAA (just for example) with a 
> shorter list of “gatekeepers” to sue. The RIAA has been blasted for going 
> after college students, but there’s hardly anyone else left. Public 
> prosecutors are sometimes in the same position (with notable exceptions 
> like Pennsylvania, where the law blames ISPs for not blocking child 
> pornography on any server). Liability is coming back into line with 
> individual responsibility. But this leaves “enforcers” going after the 
> little guy, often a) unpopular, b) fruitless, as another offender just 
> pops up, and/or c) unrewarding monetarily, for lack of “deep pockets.”
>
>
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> The irony is, the bedeviled pro-enforcers put in motion the forces that 
> lead to the limit’s desirability. The logic of limits is compelling 
> because federal law imposes heavier and heavier penalties for a larger 
> array of behaviors, and no one undertakes tort reform. Will Congressional 
> liability limits turn into a general vehicle for liability reform? Will we 
> see more and more demands for harsh penalties as a poor substitute for 
> compliance or consistent fair enforcement, fueling more and more need for 
> limits? Only time will tell.
>
>
>
> C:\SPIN is produced by the Competitive Enterprise Institute
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