If You Want To Kill Google And Facebook, Leaving Section 230 Alone Is Your Best Hope

We recently released our Don't Shoot The Message Board report, which details, with actual numbers, evidence of how Section 230 of the Communications Decency Act has encouraged and enabled a tremendous amount of investment in thousands of internet companies, building up real competition. At the event in Washington, DC, where we announced the paper, one of the questions from the audience focused on whether or not we should remove Section 230 protections from large companies as a way to deal with allegedly anti-competitive actions. The premise, put forth by the questioner, was that Google/Facebook/Amazon have benefited so much from Section 230 that that's why they're now so dominant -- and somehow removing the protections of 230 will somehow create competition.

That's a very strange take, and one that doesn't seem supported by the evidence. Again, as our report showed, having CDA 230 created lots of investment in startups and new internet platform companies. Taking away Section 230 would create a massive liability and regulatory burden, which I'm sure the big internet companies wouldn't like, but which they could obviously handle. Smaller companies? Not so much. Removing CDA 230 would only serve to lock in Google, Facebook and Amazon.

That's why it's good to see a recent paper from law professor Eric Goldman, making exactly this point: Want to Kill Facebook and Google? Preserving Section 230 Is Your Best Hope. The paper is a very quick and easy read and I recommend taking a look. Here's just a brief excerpt:

If the rules of offline publishing applied to the Internet, online republishers would implement effective measures to reduce their exposure for third-party content. Instead, due to Section 230's immunity, online republishers of third-party content do not have to deploy industrial-grade content filtering or moderation systems, or hire lots of content moderation employees, before launching new startups. This lowers startup costs generally; in particular, it helps these new market entrants avoid making potentially wasted investments in content moderation before they understand their audience's needs. Accordingly, startups do not need to replicate Google's or Facebook's extensive and expensive content moderation operations, nor do they need to raise additional pre-launch capital to defend themselves from business-crippling lawsuits over third-party content.

In a counterfactual world without Section 230's financial subsidy to online republishers and the competition enabled by that subsidy, the Internet giants would have even more secure marketplace dominance, increased leverage to charge supra-competitive rates, and less incentive to keep innovating. In other words, without Section 230, the marketplace would ossify, and existing legal regulations would help lock in the incumbents.

I take slight issue with the idea that Section 230 represents a "financial subsidy," to internet services. It seems that a more accurate description is that it's a protection against costly, misguided, or frivolous litigation. If that results in an effective "financial subsidy," that's more a black mark on a judicial system that might allow such litigation to waste resources in other contexts, rather than an actual "financial subsidy." Still, the overall paper is worth reading, and highlights the key point that we keep making. Even if you truly hate the big internet companies, removing Section 230 is not the correct way to hinder them. They can withstand such damage better than anyone else.