In his 2013 performance of Jordan Belfort, Wolf of Wall Street actor Leonardo DiCaprio encapsulates the role of the controversial fraudster brilliantly. Despite all the acclaim for the movie, most Americans don’t know that a lawsuit brought by Belfort’s brokerage firm, Stratton Oakmont, inspired the creation of the “26 words that created the internet,” a law known as Section 230.
The law, a provision inside the Communications Decency Act of 1996, is quite simple. In online spaces, Section 230 clarifies that the user posting content on a website or online forum—not the website or forum itself—is responsible for the content they post. While that concept may seem obvious and sensible, without the law in place, such a principle was not enforced by the courts before it was passed.
In 1994, Prodigy, an internet service provider, hosted message boards that were similar to an early version of the social media we know today. A user posted on a Prodigy message board about how Belfort’s Stratton Oakmont was engaging in fraudulent activities. Stratton Oakmont sued Prodigy, not the user who posted the comment, for defamation—and Belfort’s firm won.
A New York judge ruled that Prodigy could be held liable for the speech of their users because Prodigy moderated posts to restrict profanity, nudity and more lawful but awful content that people can find online. Prodigy wanted to make its service as safe and useful as it could under its principles for the average user, but such a ruling makes the decision to moderate such content at all a loser for digital services. This very well could have been the end of user generated content online, or the standardization of web forums as foul slop fests for some of the most lewd content we see people post online.
Of course, Stratton Oakmont was full of it; their firm was ultimately shuttered due to the very fraud on which this user sounded the alarm.
Then-Representatives Chris Cox (R-CA) and Ron Wyden (D-OR) stepped in to help ensure good-faith actors were protected from fraudsters and scammers like Jordan Belfort. These bipartisan lawmakers understood that companies shouldn’t be discouraged from trying to make their web services useful and safe for the average American, and children, too. Upon hearing about the Stratton Oakmont case, they worked together to write what we now know as Section 230.
In America, we have the First Amendment, which prevents the government from forcing online businesses to host speech they find objectionable. To compliment that, Section 230 clarifies that companies aren’t legally liable for the specific content posted by their users. Essentially, the First Amendment grants the constitutional right to moderate, while Section 230 provides the practical tool that makes hosting user-generated content economically viable for a business.
However, Section 230 does not protect digital services from a few important categories of content:
- Content where the platform contributed, even in part (ex: Meta is responsible for the content in its own ads on Instagram);
- Prosecuting federal crimes by the platform or its users;
- Intellectual property law;
- Failing to report known child sexual abuse material (CSAM); OR
- Crimes involving the promotion or facilitation of sex trafficking.
These reasonable exceptions protect true victims while ensuring that the American values of free speech and personal responsibility are not battered down by the trial bar in online spaces.
Today, according to data from WeAreSocial/Meltwater, there are 5.7 billion people in the world that use social media (69% of the world’s population), and 6 billion people that use the internet in general (73% of the world’s population). There’s no doubt that Section 230 helped companies to build those platforms for users without the threat of our famously litigious system stifling such innovation and speech.
As we celebrate Section 230’s 30th anniversary this week, we champion the law that transformed the internet from a static library into a vibrant, global conversation. It ensures that the actions of bad actors, like the “Wolf of Wall Street,” cannot silence speech, debate and creativity in online spaces. By relieving platforms of the logistically impossible task of policing billions of individual interactions every day, the legacy of Section 230 is a cornerstone of online freedom.