“Santa Monica was too clever by half with this ordinance. They are saying, ‘We aren’t controlling what you can say or list, but we are making it so that, if you take a nickel for anything that is booked, you’re liable, including jail time, if the host misrepresents the license,’ ” Steve DelBianco, the president and CEO of NetChoice, told CO.
“The ordinance is like holding a commercial leasing broker responsible if a restaurant tenant lied about having a business license to the point of the leasing broker spending six months in jail due to the restaurant tenant misrepresenting the tenets of their license.”
Fines and Jail Time for Website Employees
if Users Fail to Register with City
Washington, DC, April 25, 2018 – A Santa Monica ordinance, which forces online platforms to independently investigate and ensure every person with a listing on its website complies with the city’s licensing requirements, could be a death blow to web-based home sharing, ridesharing and a host of other online platforms, NetChoice and former Congressman Chris Cox (R-CA) argued in a in a joint “friend of the court” brief filed today in the case of HomeAway and Airbnb v. City of Santa Monica.
Cox, author of a federal law that makes such ordinances illegal, and NetChoice urged the U.S. Court of Appeals for the Ninth Circuit to invalidate the ordinance.
HomeAway and Airbnb require all persons listing a rental on their websites to acknowledge they are following all local laws. However, Santa Monica would hold the online platforms liable even if they were misled by property owners. The penalty? Employees at Airbnb and HomeAway could face fines and jail time.
The Cox-NetChoice brief explains how Santa Monica Ordinance 2535CCS violates federal law — Section 230 of the Communications Decency Act (1998).
“The Santa Monica ordinance effectively transfers each homeowner’s legal responsibility to the internet platform. This clearly violates Section 230,” said Chris Cox, author of Section 230 of the Communications Decency Act. “Sites such as Airbnb and HomeAway are matchmakers, bringing together homeowners and visitors. Their service is national in scope. When a family in Ohio plans a vacation in California or Florida or Maine, they expect Internet listings in these venues and more. And that is what the Internet delivers: it has allowed millions of homeowners across the country to list on these sites while millions of potential visitors have gained immediate, free access to those listings.
“Requiring the websites to review each of these listings one at a time,” Cox added, “will eliminate the very benefits consumers expect from the Internet. It is the homeowners’ responsibility to ensure they comply with all local rules and ordinances. Making the Internet intermediary liable for the website users’ legal responsibilities is what Section 230 rightly prohibits,” Cox concluded.
Section 230 protects online platforms from legal liability for user-generated content. Often termed “the most important internet law you’ve never heard of,” it is the law behind “Internet 2.0”. Without it, websites like Yelp, eBay, Facebook, and YouTube would not have gotten off the ground.
The impact of the Santa Monica ordinance could be widespread, setting a legal precedent that would undermine ecommerce.
“This is the slipperiest of slopes that Santa Monica is climbing. Do we hold clothing retailers responsible for manufacturers who may lie to them about child labor practices or mislead them about their fabrics?” said Steve DelBianco, president and CEO of NetChoice. “If Santa Monica wins, online platforms will face new costs and liability risks endangering an industry that has enabled millions of Americans to earn extra income from their homes.”
“The City seems to want to Make Bulletin Boards Great Again, by saddling marketplaces with new criminal liability,” DelBianco added.
Below are two excerpts from the brief:
- “The Ordinance requires Airbnb and HomeAway to review each individual posting on its website and check it against “a Registry of licensed home-sharing operators in the City.” Defendant’s Opp. to Preliminary Injunction at 14-15. This is exactly what Section 230 prohibits.” p.12
- “If further proof were needed that the Ordinance requires a one-at-a-time review of every online listing, it may be found in the criminal sanctions for noncompliance. Not only are they harsh ― the penalties for an Airbnb or HomeAway employee include half a year in jail ― but they are specifically imposed on a per-violation basis. §6.20.100(a). Each rental by an unlicensed website user constitutes a separate violation.” P.14
UPDATE: NetChoice says: “While the recently-enacted Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) has provided useful new tools for prosecutors, its amendment of Section 230 was never necessary to reach its goal.”
Washington, D.C. – NetChoice welcomes yesterday’s decision by the District Court of Massachusetts to allow a lawsuit against Backpage to proceed for violating the Trafficking Victims Protection Reauthorization Act of 2008. In this decision, the judge affirmed that Section 230 of the Communications Decency Act (CDA) does not stand in the way of a civil suit against the website.
“Section 230 as written makes clear that bad actors who are involved, even in part, in creating or developing illegal web content are liable to both civil suit and criminal prosecution,” said former Congressman Chris Cox, the author of Section 230.
“This federal court decision in Massachusetts is the latest in a string of rulings that, consistent with the original intent of Congress, Section 230 is no barrier to justice for victims of sex trafficking and other illegal acts,” continued Cox, who serves as outside counsel to NetChoice.
“While the recently-enacted Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) has provided useful new tools for prosecutors, its amendment of Section 230 was never necessary to reach its goal,” said Carl Szabo, Vice President and General Counsel for NetChoice. “If the President signs FOSTA next week, this court ruling sets the stage for a signing statement to affirm both that Section 230 is no bar to prosecutions for any illegal acts using the internet, and that the original Good Samaritan purpose of Section 230 remains intact.”
Even as Facebook was turning in favor of SESTA-FOSTA, behind the scenes NetChoice was instrumental in getting a manager’s amendment to the law written into it as it passed through the House. That amendment basically removed the Section 230 change with wording was eerily similar to text floated by NetChoice.
Washington D.C. – Today, NetChoice congratulated House and Senate members for their work on the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA). The bill has been made stronger since its introduction, although caution is warranted as the courts now assess the meaning of the congressional handiwork.
“We are pleased with the progress made since the introduction of FOSTA,” said Carl Szabo, Vice President and General Counsel for NetChoice. “In the House Judiciary Committee, several concerns of prosecutors were aired and addressed.”
“FOSTA clarifies the original intent of Congress in enacting Section 230,” continued Szabo. “It was never meant to be used as a shield for criminal activity despite some judicial decisions that misread both the law’s text and congressional intent.”
“FOSTA shores up Section 230, eliminating the need for further carve outs for specific federal crimes.”
“Bill sponsors offered multiple assurances against potential unintended consequences and that the Good Samaritan feature of Section 230 will continue in full force. We’re glad that these assurances will be a part of the legislative history of FOSTA.”
However, the White House, U.S. Department of Justice, tech advocates, and women’s advocacy groups raised concerns that the final version of FOSTA does not address. NetChoice strongly recommends that both the Senate and the House take the opportunity to add report language and other expressions of the sponsors’ intent.
This week, Sen. Wyden introduced two commonsense amendments to the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA). Wyden’s first amendment adds dedicated funding for law enforcement to fight sex-trafficking. Wyden’s second amendment helps platforms take-down content related to sex-trafficking… Read more->
Washington, D.C. – Today, NetChoice called on the Senate to pass amendments introduced by Sen. Ron Wyden to the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA). His amendments would safeguard the Good Samaritan component of Section 230 and would allocate extra funding toward the fight against sex trafficking.
“These amendments are common sense,” said Carl Szabo, Vice President and General Counsel for NetChoice. “Wyden’s amendments will prevent a serious unintended consequence of FOSTA while also providing increased funds in the fight against sex trafficking. There is no good reason to oppose these amendments and we look forward to the Senate accepting them this afternoon.”