Press Statements

NetChoice Urges Quick Fix to Senate Sex Trafficking Bill’s Unconstitutional Provision and Technical Flaws

Washington D.C. – Today, NetChoice welcomed the Senate’s efforts to address the problems of sex trafficking via the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) but called for more work to address technical faults with the legislation.

“Sex trafficking victims deserve a law that stands up to constitutional scrutiny and provides the protections necessary to ultimately end a scourge that has harmed so many,” said Carl Szabo, Vice President and General Counsel at NetChoice. “Unfortunately, FOSTA includes a provision the Department of Justice has said is unconstitutional. At a minimum, Congress should not deliberately pass unconstitutional legislation. This provision can easily be fixed through a simple amendment and clear report language.”

If the Senate takes the time to amend the bill in this way, NetChoice looks forward to working with legislators on another straightforward fix.  The Senate should add a single sentence to the bill making explicit what the sponsors have said publicly many times: the Good Samaritan provision of Section 230 remains intact. Otherwise the legislation, well-intended though it is, is likely to interfere with the desired result of stopping sex trafficking.

Trump Administration is Mistaken on Online Sales Tax

Washington D.C. – Yesterday, NetChoice ­­­­responded to an amicus brief from Trump’s Administration backing a reversal of Quill Corp. v. North Dakota, 504 U.S. 298 (1992), an important US Supreme Court precedent protecting out-of-state retailers from being forced to collect in-state sales tax.

“In their brief, the Trump administration feeds into an anti-tech narrative by asking the court to tax online retailers while exempting catalog mail-order businesses. They justify this anti-tech position by saying that any American who puts up a website is creating an electronic presence in all states.”

“Overturning Quill would unleash tax collectors from 46 states and 12,000 local jurisdictions to demand audits and taxes from any small business-owner in the country who dares to use the internet to sell their products or services,” continued DelBianco.

“It’s truly troubling that the administration wants the Supreme Court to support South Dakota’s attempt to reach across its borders to tax any business anywhere in the country.

Polling has shown that Americans oppose mandating tax collection by all online sellers, including almost 75% of young people, and studies as recently as September 2017 show this sentiment isn’t moving.

NetChoice Voices Support for FOSTA — With Pause

[UPDATED 3/7/18] Washington D.C. – Today, NetChoice voiced its renewed support for legislation to combat sex trafficking on the internet, and welcomed attempts by the House of Representatives for taking action to address this urgent national priority.

With the House action today, it remains to be seen how courts will interpret both the sex trafficking provisions and the broader law of which it is a part. “With the final architecture of the bill now coming into focus,” Carl Szabo, Vice President and General Counsel at NetChoice said, “we hope and expect that courts will take its sponsors at their word that the new law protects consumer privacy, user-generated content, smaller web enterprises, and freedom of expression.  Protecting these bulwarks of a healthy internet will be a proud accompaniment to this final step toward ensuring justice for sex trafficking victims.”

As a voice for consumers who rely on user-generated content across the internet, NetChoice is pleased that the original Senate bill, the Stop Enabling Sex Trafficking Act (SESTA), has been strengthened with the addition of new criminal authorities for both federal and state prosecutors.  These additional provisions are designed to ensure that cracking down on websites engaged in illegal activity is accomplished in a way that does not threaten legitimate and socially useful websites, compromise consumer privacy, unfairly disadvantage smaller web enterprises, or chill freedom of expression.

“The House Judiciary additions to the legislation were crafted after listening to the concerns of advocates of sex trafficking victims, law enforcement, and tech experts,” said Szabo.  “While we are concerned with additions such as the Walters amendment, we look forward to the Senate taking the opportunity to make adjustments based on concerns raised by the Department of Justice and echoed by the White House.”

NetChoice Welcomes Turo’s Countersuing of the city of San Francisco

Washington, D.C. – Today, NetChoice welcomes the news that Turo, an online platform enabling people to share their personal cars with others, has countersued the city of San Francisco over attempts to treat and tax the startup as if it were a car rental company.

“This is yet another example of an entrenched cartel boxing-out a new competitor, just to limit consumer choice and keep prices high,” said Steve DelBianco, President of NetChoice. “If the city could force Turo owners to pay these exorbitant airport fees, then it could likewise impose the fee on anyone driving into SFO to pick up friends or family. That’s ridiculous, but so is the aim of this lawsuit.”

Unlike car rental companies, Turo is not in the business of renting passenger vehicles to the public – it owns no fleet of cars to rent. This distinction between a peer-to-peer car sharing platform and a car rental company has been observed by the State of California in its creation of a personal vehicle sharing framework in AB 1871. It has also been recognized by the U.S. Department of Transportation which has observed that “peer-to-peer” car sharing programs are distinct from rental car companies. But, the city is ignoring this distinction with a tax that violates California law and the state’s constitution.

“Turo is not remotely like Enterprise or Hertz,” concluded Steve DelBianco. “The big rental companies convinced California tax authorities to let them avoid half a billion dollars annually in sales taxes on their fleet purchases. That lost tax revenue could go a long way to help airports such as SFO pay for services and infrastructure.”

NetChoice Concerned by Last-Minute FOSTA Amendment Reports

Washington D.C. – NetChoice is concerned by reports of plans to amend the “Allow States and Victims to Fight Online Sex Trafficking Act” (FOSTA) to adopt problematic and controversial provisions of the Senate bill, “Stop Enabling Sex Trafficking Act” (SESTA).

“While we hope that SIREN retains the core provisions of FOSTA and its language on Section 230, we worry that some may try to pass a last-minute amendment that undoes the House Judiciary Committee’s hard work and coordination with law enforcement, victims groups, and experts in the tech industry,” said Carl Szabo, General Counsel and Vice President of NetChoice.

FOSTA is a bill that was crafted using guidance from law enforcement, victim advocates and the tech industry, working together to find the best solution to an incredibly pressing problem. It answers the problematic provisions of SESTA while strengthening the ability of state, local, and federal law enforcement agents to stop sex trafficking both on the internet and on the streets.

“We’ve already seen that Section 230 is not a bar to discovery in Jane Doe v. Backpage. And we’ve seen that Section 230 is not a bar in other civil suits against Backpage.  Hopefully law makers will look past the plaintiff bar’s fiction about Section 230 and instead take the Judiciary committee’s unanimously approved FOSTA language,” Szabo concluded.

Carl Szabo: US Federal Court in Boston Shows Section 230 is No Bar to Discovery

The US Federal Court in Boston just gave us a ruling that shows Section 230 is not a bar to discovery for the refiled Jane Doe v Backpage.  The decision is attached.
Here’s NetChoice’s statement which can be attributed to Carl Szabo, Vice President and General Counsel, NetChoice:
“This ruling by the federal court in Boston in the Jane Doe v. Backpage case is a great win for victims of sex trafficking and those working to stop bad actors like Backpage.  It is a very positive sign that the victims will get their day in court, and that Backpage won’t be able to hide behind Section 230.  

“This decision is especially welcome because it comes within the First Circuit.  It will likely soon result in a favorable precedent at the appellate level as well. 

“When the First Circuit previously considered this case, they made it clear they were not ruling on allegations that Backpage participated in web content creation. The plaintiffs wisely amended their complaint to allege this. As a result, they gained access to discovery that will allow even more specific allegations in this case. 

“All sex trafficking victims should be encouraged by this decision.  Meanwhile, as this case moves forward to limited discovery without restraint from Section 230, Congress should advance HR 1865, Allow States and Victims to Fight Online Sex Trafficking Act of 2017 that creates new criminal liability and civil authorities to benefit victims and provide restitution.”

US SCOTUS Grants Cert in South Dakota v Wayfair

“The nation’s highest court just confirmed what we have always said: states cannot impose their tax collection burdens on businesses who don’t have a physical presence in the state.  Today’s decision is a victory for small businesses across the country.  No longer having to worry about increased tax burdens, our nation’s entrepreneurs can stay focused on innovating and competing to better serve their customers.”