November 16, 1997 9:00 AM PST

AOL speech ruling cuts both ways

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Online service providers had good reason to cheer last week when a federal appeals court ruled that America Online (AOL) was not liable for defamatory remarks posted by its subscribers. Champions of unfettered Net speech, however, shouldn't be quite so sanguine.

The decision, issued Wednesday by the Fourth Circuit U.S. Court of Appeals, held that a provision in the Communications Decency Act "plainly immunizes computer service providers like AOL from liability for information that originates with third parties." The ruling also held that, even when notified of defaming material, service providers cannot be prosecuted for failing to remove it.

In other words, online services can't be held responsible for what their users write.

The analysis by the three-judge panel could hardly have been more favorable to AOL--as well as to other service providers that worry about liability every time a customer posts potentially obscene or defaming material online.

But foes of censorship were handed results that are considerably more mixed. As the court made clear in its decision, an "important purpose of [the immunity provision] was to encourage service providers to self-regulate the dissemination of offensive material over their services."

Attorneys who have read the decision say it may encourage ISPs to self-censor.

Before the ruling, "there was this sense that you could not self-regulate without running the risk of getting yourself into a scheme of liability," said Ed Cavazos, vice president and general counsel of Interliant, a network service provider in Houston. The worry stemmed from an earlier case involving brokerage house Stratton Oakmont and the online service Prodigy, in which a court held the online provider liable for a user's defaming postings because of Prodigy's practice of controlling content in its forums.

Whatever precedent remained is clearly quashed by the Fourth Circuit decision.

"This decision does clear the way for service providers to censor without running any risks," Cavazos said.

Chris Hansen, senior staff counsel to the American Civil Liberties Union, agreed. "It's a good thing that ISPs are not treated as though they have to review every message on their site and decide whether it's defamatory or non-defamatory," Hansen said. "It is also a bad thing that [the decision] frees them up to do whatever censorship they want to do."

Hansen said he would prefer that ISPs be given further immunity, similar to that given to telephone companies. "If right now I say something libelous to you, no one would suggest that the phone company is liable. And, similarly, even if the phone company knew of the libelous conversation, there are laws that prohibit the phone company" from censoring them, Hansen said. "This decision doesn't have the virtues of that approach."

The AOL case arose after a subscriber posted messages on the service in April 1995 that advertised "Naughty Oklahoma T-Shirts" purported to come from a Kenneth Zeran. The shirts made fun of the bombing earlier that month of the Alfred P. Murrah federal building in Oklahoma City.

As a result, Zeran received many calls from outraged readers, some threatening to kill him. Zeran notified AOL representatives of the postings and asked that they be removed. But over the following days, new and even more offensive messages were posted, eventually prompting a local radio station to publicize them and causing Zeran to be inundated with more death threats.

In April 1996, Zeran sued AOL for negligence, alleging that the service should have acted more quickly to remove the defamatory postings. AOL relied on a provision in the CDA, which went into effect two months earlier, that held that "no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." A federal district court in Virginia ruled that the provision barred Zeran's claim.

In upholding that decision, the appellate court made it clear Wednesday that the provision precludes any liability on the part of service providers for material originating either with subscribers or other service providers.

The decision also stated that even when the service provider is told that a message it carries is defamatory, it still is not liable. That provision closes what the judges said would be a huge loophole.

"Notice-based liability for interactive computer service providers would provide third parties with a no-cost means to create the basis for future lawsuits," the decision held. "Whenever one was displeased with the speech of another party conducted over an interactive computer service, the offended party could simply 'notify' the relevant service provider, claiming the information to be legally defamatory."

The judges also noted that Congress's intent in drafting the immunity provision was to encourage service providers to police their own content, a consideration that was key in the Fourth Circuit's decision.

While some say the decision will encourage censorship, a number of attorneys and free-speech advocates disagree, saying that, practically speaking, the decision will have no chilling effect.

"It doesn't in and of itself make [ISPs] more likely to" censor, said Stanton McCandlish, a spokesman at the Electronic Frontier Foundation. "I can see some particular Web sites going down because of this ruling, but they can pop up elsewhere."

And in the end, Interliant's Cavazos said, the benefit of insulating service providers from liability far outweighs the risk of censorship.

"While they have more freedom to censor," he said, "it's better than service operators having to shut their users up because they're afraid they're going to be responsible for what they say."

 

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