What's Next: Section 230 Unhinged
Also this week: SEC says no to ICO touting agency endorsement. And the app to spark lawsuits.
October 17, 2018 at 07:30 AM
6 minute read
Hey there everyone. Law.com's Ian Lopez back with some of the biggest questions and events sparked by technology's confrontations with the law. First, we have a novel Section 230 issue brought before the D.C. Circuit by … locksmiths? Also this week: The SEC accuses crypto outfit Blockvest of a seemingly brazen lie, and a college student has an app that helps users sue with a few clicks.
But how about some feedback? Drop a me a line at [email protected] or @IanMichaelLopez.
Mapping Section 230 Immunity for Search Engines
Section 230 of the Communications Decency Act may render tech companies like Google immune from liability over info others publish through their websites, sans certain circumstances. But what about when a search engine approximates a location for a business that doesn't list its address online, and that approximation harms competitors?
This scenario came up in the D.C. Circuit, where a group of locksmiths are attempting to unhinge the Section 230 protection Google, Microsoft and Yahoo used in convincing a lower court to toss a lawsuit accusing the search engines of plotting what plaintiffs dubbed “false and misleading” map results for “scammer locksmiths” (which you can learn more about here).
How the three judge panel (featuring none other than Merrick Garland) will rule remains to be seen, though it's interesting how each side essentially viewsSection 230 immunity through different lenses. The tech companies stop short of flat out denying they're drumming up mapped locations from incomplete web info. But their lawyer, King & Spalding's Kathleen McCarthy, explained in Friday'sarguments that the search engines weren't out-of-bounds with Section 230 protections because the statute gives the OK for internet companies to design their technology in ways that create “useful products.”
The tech companies pulled no punches in their brief to the D.C. Circuit, describing plaintiffs' allegations that they generate map content “out of thin air” not only as “implausible on its face,” but entirely self-contradicting. Plaintiffs' “own complaint and briefing establish that the 'original content' they allege is simply the map content displayed by Defendants' search engines, which by plaintiffs' own account rely on phone numbers, service areas, or other information provided by the scam locksmiths.”
“That map content is, by plaintiffs' own admission, based on 'information provided by another information content provider' and therefore subject to immunity under the CDA.”
In the locksmiths' telling, search engines pulling even scant data from a scammer site, such as an area code, and using that to show a user a locksmith near them, places the companies square within Section 230's reach. I.e., since the info “does not appear on any web site other than those created by the search engine,” that engine is no longer a publisher but a creator.
⟶ Takeaway: The Section 230 issue touched upon in this lawsuit is exemplary of the sort of issues courts face in applying fairly straightforward legal text in a changing online environment.
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Protocol: SEC Says No to Crypto Outfit Boasting Agency Endorsement
Crypto scams may seem a dime a dozen, and the SEC appears to be cracking down. Blockvest is behind the latest blunder on which the SEC is biting back, with the agency going after the crypto outfit with a lawsuit for fibbing about registering its ICO and getting approval from the agency.
But the suit, unsealed last week, digs deeper. As my colleague Dan Clark writes, Blockvest allegedly went as far as making up its own regulatory body, the Blockchain Exchange Commission, to promote its ICO, as well as lifting the SEC and National Futures Association logos for its website and other marketing purposes.
A federal judge has since issued a temporary restraining order bringing Blockvest and its founder's pre-ICO sales to a halt, and arguments over whether the court should grant a preliminary injunction are set for Thursday. But it's interesting to think how brazen or bungling some seemingly sketchy outfits can be. As Ethereum World News puts it, global regulators consider ICOs “a convenient tool for fraud and money laundering.” Yet U.S. regulatory agencies have caught up, cracking down via “coordinated enforcement.”
But Blockvest founder Reginald Ringgold threw his two cents into the discussion. He claims the SEC's complaint has “several unfounded allegations,” and that the company is “in full cooperation” and has “nothing to worry about” because it operates “in a culture of compliance.”
⟶ Looking ahead: Ringgold claims “the whole crypto digital asset space is under attack,” and he's not alone in this view. But a new “culture of compliance” may be driven by U.S. regulatory agencies rather than those proclaiming to operate to innovate.
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Dose of Dystopia: Click 'Lawsuit' Please
That Stanford wunderkind behind the “chatbot” service DoNotPay that helped people contest parking tickets pro se is back. This time Joshua Browder's service, now an app, is boasting it can help you “fight corporations, beat bureaucracy and sue anyone at the press of the button.”
The app essentially works by conducting a question-and-answer session on the nature of a filing and personal info, then prompts the user for the amount for which they'd like to sue. From there, the user is provided with relevant documents needed for court, including a script to walk the litigant through proceeding.
Understandably, it has some lawyers shouting foul (or hinting at malpractice), though others are boasting of the possibilities on the access to justice frontier. Browder himself tells Motherboard some situations need an attorney to go to bat. But “for things like landlord tenant disputes, or if you buy something and it doesn't work, or if you've been a victim of a data breach—there's no reason why that's not a clear cut case and you will win, as long as you have the evidence and the damages.”
And Browder's aspirations to disrupt run high. He tells the Washington Post that he hopes “to replace” the “handful of lawyers” that are “benefiting from human misery” by making the law free of charge.
“I think people are really upset with how the legal system works. … Lawyers say this app isn't necessary, but if your issue is below $10,000, no lawyer is going to help, and if they do they're going to take 50 percent of what you make.”
⟶ Looking Ahead: DoNotPay is nowhere near wiping out the legal profession (or even a portion of it). Yet the technology joins a line of entrants to the legal tech space that will likely reduce legal fees in the future.
That's it for this week! Stay tuned for What's Next!
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