After Stratton Oakmont v. Prodigy: Section 230 of the Communications Decency Act Provides Blanket Immunity For Interactive Computer Service Providers

Under Section 230 of the Communications Decency Act, providers of interactive computer services will be treated as a publishers under the law, which means that they will not be held liable for the defamatory statements of their users.  Section 230 exempts those from liability that take action to restrict users’ access to objectionable material.  But this wasn’t always the case.

Under common law defamation rules, “publishers” can be held liable for publishing the defamatory statements of “speakers.”  Those publishers who repeat the defamatory statements of speakers can be held liable to the same extent as the speakers themselves if they take a responsible part in the publication and know of the defamatory nature of the content.  This has been the rule for many years.
In Stratton Oakmont v. Prodigy, Prodigy was held liable for failing to remove libelous material.  Prodigy was one of the early large-scale Internet service providers and had a unique system of content control.  Prodigy’s bulletin board system had content guidelines that prohibited libelous statements.  Board Leaders, who acted as enforcement officers, were instructed to remove any posts that violated the terms of the guidelines.  Libelous statements were posted about Stratton, a brokerage house, and Prodigy failed to take them down consistent with its guidelines policy.  The court said that Prodigy held itself out as a family oriented computer network and as an online service that exercised editorial control over messages.  Since it had software screening programs for offensive language, Board Leaders who enforced Prodigy's guidelines, and a tool for Board Leaders to delete posts, Prodigy was held to be a publisher.  They had exhibited significant control over the posts on their network and therefore were responsible for repeating the libelous comments.

This left interactive computer service providers with no other choice but to let users run wild on their systems.  If service providers exercised control, they were at more of a risk of being held liable for defamation.  Thankfully, the 1996 Communications Decency Act changed this discrepancy in the law and interactive computer service providers are now given blanket immunity for exercising control over their user-generated content.  It is likely that we wouldn’t have all of the unique Web 2.0 companies without it.  And blanket immunity really means blanket immunity.  Matt Drudge was sued for publishing false statements about former aid Sidney Blumenthal in a letter that AOL paid him to author.  In Blumenthal v. Drudge, the court held that even paid authors are protected by Section 230 immunity.