Section 230

A weekend saga on Clubhouse shows the perils of reform

Shorter piece this week, my longer research on the sleep tech company Eight Sleep hasn’t yet come together.

Section 230 bill

Section 230 is in the crosshairs with Democratic control of both chambers of Congress and the White House.  Republicans have generally been pushing tech firms to decrease scrutiny towards conservatives. Democrats have generally been pushing tech firms to increase scrutiny towards problematic content (including but not limited to some conservatives). I found this article to be very informative and worth the read.

A couple of proposed changes stand out.

• When money is involved, Section 230 provisions would no longer apply.  This is incredibly impactful.  Web hosting is an example he cites.  You could imagine AWS/Google Cloud/Azure feeling pressure as well.  Social media business models besides advertising would become untouchable, as subscriptions would trigger this as well.  Oddly, Section 230 reformers seem to overlap with people proposing non-advertising based business models.

• Section 230 would change from “qualified immunity” to “affirmative defense” meaning the burden would no longer be on the plaintiff but on the defendant.  If I maliciously sued say Clubhouse, they would be required to defend themselves.

Two sad realities could come from these changes.  The first is that only the biggest platforms would be able to survive.  A small startup won’t have the budget to fend off endless lawsuits.  In a world where Big Tech’s power is being questioned, this would further entrench them. 

The second is that the powerful and entrenched members of society will come under less scrutiny.  They are the ones that can afford endless lawsuits.  The TechDirt article cites #MeToo: Harvey Weinstein could have squelched stories with a deluge of lawsuits.  Imagine the George Floyd moment but with the Minneapolis Police Department suing to keep videos off of social media.  Lots of very powerful people would love to silence the more democratic microphone of social media. Risk aversion will likely become the dominant strategy.

Fortunately (or maybe unfortunately) we have a perfect example of the risks this weekend.  The social media platform Clubhouse saw accusations by a NYTimes reporter that Marc Andreessen used a derogatory term for the intellectually disabled.  The facts do not seem to support that allegation.  Andreessen and his firm are making a strong end-run around the media, and he certainly has many detractors and enemies.  Without Section 230, perhaps a more effective way to go after Andreessen would be to drown his Clubhouse investment in lawsuits while Twitter and Facebook halt its momentum.