Beyond the Headlines: Analysis of the Executive Order on Preventing Online Censorship and the Potential Impact on Section 230 Policy

On May 26th at 5:17 AM President Donald J. Trump published a series of tweets raising questions regarding California's vote-by-mail practices. In other words, it was a standard early morning in Washington, DC. The events that came next, however, were anything other than usual. The President's tweets led to Twitter making an extraordinary editorial decision: by the end of the day, the social media platform affixed a notation to the President's tweets alerting readers to "Get the facts about mail-in ballots," along with a link to various resources as part of effort to enforce the platform's "civic integrity policy … [and] provide additional context and conversation with regard to voter fraud and mail-in-ballots." A political firestorm raged, and roughly 24 hours later on May 28th, the White House issued an executive order that invites fundamental changes to Section 230 of the Communications Decency Act—a narrow but important law that affords liability protection for a range of stakeholders in the online ecosystem.

The "Executive Order on Preventing Online Censorship" directs federal agencies to take a number of actions designed to narrow the scope of Section 230. Perhaps most notably, the Order requires the Department of Commerce (DOC) to petition the Federal Communications Commission (FCC) for clarifying regulations in ways that could ultimately lead to limitations on the liability shield afforded to online platforms under the law. For this reason alone the Order raises important questions regarding the scope of a law adopted in 1996 before the dawn of the modern internet. And with those questions considerable controversy follows—even an early lawsuit alleging violations of the First Amendment.

Because of the circumstances leading to the order and the nature of its introduction, some may dismiss the White House's directive as a political distraction without legal merit. But practitioners should consider whether a broader view is in order. The policy, political and legal environment surrounding Section 230 was already incendiary before May 28th. Congressional technology leaders on both sides of the aisle are exploring legislation designed to address the law in various ways. Attorney General William Barr had already called for courts to re-interpret the law more narrowly. And federal courts are still wrestling with a range of issues that call into question how far the Section 230 liability protections extend. For instance, does the law shield online retailers from product liability claims? The President's Executive Order will fan these legal and policy flames and prompt new attacks underlying the foundation of the law—regardless of the order's merits or the legal reasoning it relies on. This Advisory will explore these issues and examine potential developments in the near and longer term.

Executive Summary of Section 230

Before we address these issues, it is necessary to first understand what Section 230 does and does not do. Enacted as part of the Communications Decency Act of 1996, Section 230 shields certain online service providers from liability for hosting, removing or limiting access to user-generated content through two provisions. Under Section 230(c)(1), an "interactive computer service" provider—a term that includes internet service providers, online platforms and other access software providers—will not be treated as a "publisher or speaker" of information content provided by a third party. Section 230(c)(2) then prevents interactive computer service providers from being held liable when they act "in good faith" to restrict or remove content the provider considers objectionable. In other words, service providers cannot become subject to publisher liability for exercising limited editorial control over the content hosted on their sites.

While these provisions offer service providers broad protection, the liability shield is not absolute. For example, Section 230 does not protect service providers from prosecution under federal criminal, intellectual property, or sex trafficking statutes.¹ In addition, Section 230 liability protections do not apply when platform providers facilitate or contribute to the development of problematic content.² Likewise, courts have held that online platforms can be held liable under a negligence theory so long as claims target the operation of the service and not an editorial decision regarding content uploaded by a third party.³ Finally, the full US Court of Appeals for the Third Circuit is currently reviewing a panel decision finding that online retailers can be held accountable under state product liability law for defective products sold by a third-party—so long as the claims do not raise question regarding platform editorial discretion.⁴

The Executive Order: What It Requires, and the Key Questions It Raises

The Executive Order seeks to narrow the applicability of Section 230 even further to restore Congress's intent to promote free and open debate on the internet. The Order rests on the assumption that, contrary to the will of Congress, social media platforms wield Section 230 liability protections as a weapon to engage in "deceptive or pretextual actions … to stifle viewpoints with which they disagree" and engage in selective censorship.⁵ Such service providers, according to the Order, should "be exposed to liability like any traditional editor and publisher that is not an online provider."⁶

To implement this policy goal the Order directs the DOC to file a petition for rulemaking with the FCC to clarify certain issues. The petition must ask the FCC to clarify: the relationship between (c)(1) and (c)(2), and the circumstances under which subsection (c)(1) protections apply when a service provider restricts access to content in a manner not specifically contemplated under the "in good faith" requirement under subsection (c)(2); and what constitutes "taken in good faith" within the meaning of subparagraph (c)(2)(A).

Whether the FCC has the authority to adopt regulations as contemplated by the Order remains to be seen. While the FCC has general rulemaking authority over any statute under its jurisdiction,⁷ courts have held the FCC, like other federal agencies, "literally has no power to act . . . unless and until Congress confers power upon it."⁸ Section 230 does not expressly confer authority upon the Commission to regulate or interpret legal issues arising under the statute. Consequently, the NTIA will need to convince the Commission that it has the authority under the CDA, or that another section of the Communications Act provides requisite authority. The FCC wrestled with a somewhat similar question during the Obama Administration in connection with the Open Internet proceeding, and appeared convinced that it had authority to issue binding regulations on internet service providers under Title I of the Act before pivoting to Title II authority later in the process.⁹

The Order also asks the Federal Trade Commission (FTC) to review complaints the White House received through its Tech Bias Reporting tool, and determine whether to investigate alleged deceptive trade practices that "restrict speech in ways that do not align" with service providers' terms of service or posted policies. Similar to the questions raised by the FCC directive, it is unclear whether any complaint forwarded by the White House to the FTC would provide "reason to believe" that such conduct violates the law,¹⁰ or whether an inquiry arising from any such complaint would satisfy the FTC Act's statutory authority test.¹¹ At least one Commissioner recently expressed interest pursuing elements of the White House's Order, though speculation remains regarding the FTC's appetite to investigate.

Finally, the Order requires executive branch agencies to take a range of actions that also have raised questions. All agencies must, for example, develop policies to prevent federal agencies from spending advertising and marketing budgets on service providers that present "problematic vehicles for government speech." The Department of Justice must also develop federal legislation to implement the policy objectives of the Order and convene a working group of state attorneys general to: (1) determine whether states can pursue deceptive trade practice claims based on service providers' moderation practices; and (2) gather public information on service providers' engagement in practices the Order deems outside the scope of Section 230 protections.

These directives are already subject to a lawsuit pending in the US District Court for the District of Columbia alleging that the Order violates the First Amendment.¹²

Congressional Activity Independent of the Order

Independent from the President's recent Executive Order, Congress has been considering proposals to reform Section 230 in various ways during the past year and a half. Members are motivated by a variety of ideological and industry-specific concerns. In general, Democrats are largely concerned with information they deem to be harmful, i.e., hate speech, terrorism, harassment and false information, while Republicans tend to focus on censorship of conservative political ideology and law enforcement issues.

Proposals to address these concerns under Section 230 generally fit into two categories. The first approach is to "carve out" narrow exceptions to Section 230—often after litigation results in a service provider's escaping liability for unsavory conduct taking place on its platform. Congress followed this model in April 2018 by passing the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) on a bipartisan basis (voting 388-23 in the House, 97-2 in the Senate) to create an exception to Section 230 for content that "promotes or facilitates prostitution." Congress passed FOSTA as a response to human-trafficking concerns exposed by litigation surrounding the website Backpage.com.

Examples of similar "carve out" legislation in the 116^th Congress include: the SHIELD Act (S. 2111/H.R. 2896), which would make it unlawful to knowingly distribute private intimate visual depictions with reckless disregard for the individual's lack of consent to the distribution; Protecting Local Authority and Neighborhoods Act (H.R. 4232), which would hold internet platforms liable for knowingly marketing illegal short-term vacation rentals; and Protecting Children from Online Predators Act of 2019 (S. 1916), which would make it illegal for any internet computer service to recommend videos featuring minors.

The second approach requires platforms to meet certain standards in order to qualify for Section 230 protections. This latter category is the approach taken by a bill that has recently garnered bipartisan support in the Senate, the Eliminating Abusive and Rampant Neglect of Interactive Technologies (EARN IT) Act (S. 3398).¹³ The EARN IT Act was introduced by Sens. Lindsey Graham (R-SC), Richard Blumenthal (D-CT), Josh Hawley (R-MO) and Dianne Feinstein (D-CA) in March and would require companies to "earn" their liability protection for violations of laws related to child sexual abuse material.¹⁴

Other examples of legislation taking a similar approach include: the Ending Support for Internet Censorship Act (S. 1914),¹⁵ which would condition Section 230 protections on the ability of platforms to prove to the FTC by clear and convincing evidence they do not moderate content from a politically biased standpoint; and the Limiting Section 230 Immunity to Good Samaritans Act (S. 3983),¹⁶ a bill recently introduced by Sens. Josh Hawley (R-MO), Marco Rubio (R-FL), Mike Braun (R-IN), Tom Cotton (R-AR), and Kelly Loeffler (R-GA) that would require edge providers to update their terms of service and meet a new "good faith" standard in order to receive liability protections under Section 230.

Meanwhile, Speaker of the House Nancy Pelosi recently remarked that advertisers ought to flex their power and hold social media companies accountable for their dissemination of misinformation.¹⁷ While Speaker Pelosi has been critical of President Trump's Executive Order,¹⁸ her sentiment echoes calls made by her colleagues in Congress to hold the tech industry accountable for content on the internet.

What to Expect After the Order

The Order by itself does not change the statute or the case law interpreting the liability protections under Section 230. While the Order directs the NTIA to take actions that might lead to FCC action, any substantive movement is likely months away since NTIA has until July 27, 2020 to file its rulemaking petition with the FCC.

However, the FCC has no obligation to act. As noted above, the FCC's authority to carry out a rulemaking as envisioned by the Order is questionable. A way forward may be for the FCC to issue a Notice of Inquiry to gather public comments on Section 230 reform and build a record. But this process would likely be lengthy, and once formally opened, could last through or beyond the election cycle. Consequently, the FCC may not even determine whether to issue a Notice of Proposed Rulemaking to formally jumpstart the rulemaking process until after the November 2020 election—the results of which could determine the result of the inquiry.

Whether or not the FCC acts, ultimately, may be beside the point. The Order created political momentum for Section 230 reform on Capitol Hill and within a variety of political constituencies, and for different reasons. Conservative lawmakers already critical of alleged social media bias applauded the President and called for Section 230 reform. Sen. Josh Hawley (R-MO), for example, sent a letter to Twitter arguing the company should lose its Section 230 immunity¹⁹ and followed up by introducing legislation that would impose significant restrictions on social media platforms' ability to utilize Section 230 protections.²⁰ Meanwhile, Democratic congressional leaders roundly criticized the President's motivation underlying the Order -but at least some envision Section 230 reform as a tool to address their own concerns regarding the reliability of political information online and platform responsibility to address misinformation.

These issues will be front and center in near-term congressional activity. The House Energy and Commerce Committee, for example, will hold a hearing on Wednesday, June 24^th exploring how "disinformation online is dividing the nation," and Section 230 issues are directly implicated in witness testimony published in advance. Similarly, there is a strong chance that FCC commissioners face questions on the issue at an oversight hearing in the Senate Commerce Committee on the same day. Finally, the Senate Judiciary Committee will markup the EARN IT Act on Thursday, June 24th and there is a good chance that committee members report the legislation favorably on a bipartisan basis.

This flurry of congressional and regulatory activity notwithstanding, with the election less than six months away, we do not anticipate immediate congressional action. The Order has politicized Section 230 reform, which decreases the already low likelihood of reform efforts in this Congress.

It is for this reason that some may default to dismissing the seriousness of the President's Order or its long-term impact. Doing so, however, risks overlooking the rapid bipartisan movement towards Section 230 reform and the manner in which the Order could contribute to the effort. For instance, if the FCC seeks comments on the DOC petition for rulemaking, that process could generate a substantive record supportive of Section 230 reform and augment the Justice Department's Section 230 reform proposals - recently published after completion of a ten-month review. Together, this record may provide a boost for reform advocates on Capitol Hill.²¹

And finally, while political circumstances may preclude bipartisan reform in 2020, the political terrain could look very different in 2021. While his reasons differ from President Trump, the presumptive Democratic Presidential Nominee Joe Biden also supports abandoning Section 230.²² As a result, regardless of November's outcome, Section 230 reform may have bipartisan appeal in the next Congress—and the President's Order could have a lasting impact by contributing to the already strong appeal in the stakeholder and congressional community for reform.

* Jessica Monahan contributed to this Advisory.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.