Inducement Standard For Section 230 Could Put A Significant Chill On Innovation
from the uh-oh... dept
Until now, that is.
Eric Goldman points out that in a recent ruling in a lawsuit between the New England Patriots and Stubhub, it appears that a court has suddenly come up with an "inducement" standard for section 230 as well, despite most other court rulings (with one major exception) giving pretty broad protections to any service provider. In this case, which we've discussed before, the New England Patriots were furious that season ticket holders might resell some of their tickets on StubHub, and even had a court force StubHub to hand over the names of its users (despite this being a massive privacy violation that also violates StubHub's own terms of service). While an earlier ruling indicated StubHub was protected by the section 230 safe harbors, this latest ruling says it's not, in part because StubHub knows about, helps and profits from ticket scalping on the site.
This is troubling for a variety of reasons. It still involves putting liability on a party who doesn't actually break the law. Furthermore, when using a standard that involves looking at whether or not the company profits from the law breaking, you effectively kill all safe harbors. Any commercial service provider, almost by default, will profit in some way from the law breaking, but that shouldn't make them liable for it. Also, as we've see quite clearly with the inducement standard encroaching on DMCA safe harbors, those on the other side of lawsuits will continue to try to stretch and twist the contours of what counts as "inducement." If this stands, it will create massive potential liabilities for online service providers, and there will be lots of expensive lawsuits. The end result will be a greatly chilled market for innovation.