Lawmakers Urge Trade Officials to Remove Tech Liability Shield

A bipartisan group of lawmakers is stepping up efforts to have U.S. trade officials eliminate a legal liability shield that tech companies are pushing to keep in new agreements, including a deal to replace the North American Free Trade Agreement awaiting approval by Congress.

“Including provisions in trade agreements that are controversial to both Republicans and Democrats is not the way to get support from Congress,” House Energy and Committee Commerce Chairman Frank Pallone Jr. said as he addressed a Wednesday hearing of subcommittees that included executives from Reddit Inc. and Alphabet Inc.’s Google.

The lawmakers, who also heard from experts on law and cyber crime, were examining whether tech giants should continue to benefit from Section 230 of the 1996 Communications Decency Act, which provides internet platforms liability protection for user-generated content.

Online platforms such as Alphabet Inc.’s Google and Facebook Inc. prize the provision of U.S. law, and their trade groups are also pushing for the extension of similar protections internationally that would unify policy among countries in trade deals such as the pact to replace Nafta and a proposal for a deal with Japan.

Michael Beckerman, president of the Internet Association trade group that counts Google and Facebook as members, called the inclusion of the provisions in U.S. trade deals “a victory for the entire American economy.”

“Failing to include these protections – which have been a part of U.S. law for two decades – in trade agreements would negatively impact the countless small businesses and entrepreneurs that use online platforms to export and advertise their businesses,” Beckerman said in a statement.

But Democratic Representative Jan Schakowsky of Illinois, the chairman of the Consumer Protection and Commerce Subcommittee, told reporters after the hearing that language similar to Section 230 has no place in a trade agreement.

“It is a uniquely American law, and we’re in the midst of a discussion about it, and this is a gift to big tech to insert it into trade agreements,” Schakowsky said.

Problematic Content

The debate comes as world leaders look to increase the companies’ responsibility for problematic content such as terrorist propaganda. If countries that don’t currently have similar liability exemptions adopt them through trade agreements, then tech companies would have more protection from lawsuits over content.

Democrats and the White House are moving closer to a deal on the revised Nafta, called the U.S.-Mexico-Canada Trade Agreement, or USMCA. The two sides are working to improve enforcement of the treaty but haven’t resolved other concerns. House Speaker Nancy Pelosi, who decides whether to bring the pact to the floor for a vote, has said Democrats want to be on a “path to yes” on USMCA.

The panel had invited U.S. Trade Representative Robert Lighthizer to testify, but he declined to appear, which Pallone had previously called “extremely disappointing.”

Pallone and Representative Greg Walden of Oregon, the top Republican on the committee, had sent a letter to Lighthizer in August asking him not to include provisions similar to Section 230 in future trade agreements. Walden said he was frustrated with the lack of response from President Donald Trump’s administration and Lighthizer.

‘Blown Off’

“I thought the letter to the ambassador was going to send the right message,” Walden said at the hearing, adding that the committee doesn’t want to “blow up” the trade deal. “But we’re getting blown off on this and I’m tired of it.”

A message was left with USTR seeking a response to lawmaker complaints about including language similar to Section 230 in the trade agreements and Lighthizer declining to appear before the committee or consult the panel.

The hearing comes amid growing skepticism among lawmakers about whether social-media companies should keep the legal protection as a part of U.S. law as they struggle to stem drug and gun sales and offensive content on their platforms.

Tech companies value the measure because it saves them from having to review users’ posts before they’re published online and then shields them from lawsuits if that content turns out to be problematic, which critics say allows the companies to avoid taking responsibility for dangerous and illegal content.

Yet the companies emphasized that the law also can protect their moves to remove violence and misinformation, which they say is needed to police their online spaces.

Hamper Growth

Katherine Oyama, Google’s global head of intellectual property policy, and Reddit Chief Executive Officer Steve Huffman said that any significant changes to their liability protection would hurt their ability to curb harmful content on the internet and hamper the growth of new companies. Reddit is a news and discussion board whose majority shareholder is Advance Publications Inc.

Oyama said that the legal measure helped digital platforms turn the internet into an open and thriving marketplace that benefits users and businesses. If the immunity were eliminated, companies would face an onslaught of lawsuits, she said.

Tech industry advocates also say that amending the legal liability shield would only impose onerous burdens on smaller companies while protecting the bigger tech companies from more market competition.

Modify Not Repeal

Lawmakers at Wednesday’s hearing showed an increasing willingness to modify the legal liability shield but stopped short of calling for its repeal all together. At one point during the hearing, Schakowsky asked her colleagues to raise their hands if they wanted to eliminate Section 230. No member did.

Republican Representative Bill Johnson of Ohio urged tech companies to do a better job at moderating their platforms if they don’t want onerous regulations.

“I would suggest to the entire industry of the internet, social media platforms, you better get serious about this self-regulating,” Johnson said.

–With assistance from Ben Brody.