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.”
Washington D.C. – Today, NetChoice has welcomed the filing of Wayfair and Overstock’s brief in the case South Dakota v. Wayfair, Inc., Overstock.com, Inc, and Newegg, Inc.
“The brief shows that removing Quill’s physical presence protection would fundamentally undermine small businesses serving customers outside their state,” said Steve DelBianco, President of NetChoice.
“The states are so wrong to claim that small businesses would be unaffected,” continued DelBianco. “States may provide “free” tax software, but the costs of integration and answering to 46 state auditors would be a significant burden to any small business going online to reach new customers.”
Below are key quotes from Wayfair and Overstock’s brief, providing a strong introduction to the points that will define this Supreme Court case:
“What occurs inside a state’s borders has always been the critical foundation for a state’s taxing and regulatory authority; in short, borders matter.” [p.11]
“Changed conditions in the retail marketplace also cannot justify the abrogation of the physical presence rule where the constitutionally-significant conditions remain unchanged.” [p.25]
“Congress is the institution best-suited to resolve the competing interests in remote sales tax collection and to select the proper policy outcome… Overruling Quill would complicate, if not prevent, a congressional solution.” [p.26]
“Small businesses seeking access to a national market, not the massive multi-channel retailers that already report sales tax across the country, will be harmed most by the new compliance burdens, new barriers to entry, and new obstacles to growth.” [p.27]
Washington D.C. – NetChoice is disappointed that the U.S. Supreme Court has denied cert for Ajemian v. Yahoo. The case, originating in Massachusetts, reversed the privacy expectations of residents and held that next of kin automatically gets access to data of deceased users.
“The U.S. Supreme Court missed an important opportunity to clarify the privacy rights of Americans over their data when they die,” said Carl Szabo, Vice President and General Counsel at NetChoice. “Massachusetts made the wrong decision last year in obligating Yahoo to disclose private data to those managing the estate of Ajemian. Unfortunately, without legislation, the state’s residents will see privacy protections disappear when they pass away.”
Washington, D.C. – Today, NetChoice welcomed the news that the Clarifying Lawful Overseas Use of Data (CLOUD) Act has passed Congress as part of the omnibus spending bill and makes its way to the President’s desk to be signed into law.
“When signed into law, the CLOUD Act will improve civil justice in foreign countries while helping law enforcement solve crimes and save lives,” said Carl Szabo, Vice President and General Counsel at NetChoice. “We’re excited for the CLOUD Act to clarify the relationship between law enforcement and cross border data.”
In our op-ed in Morning Consult, Carl explains how the CLOUD Act will encourage strong civil justice protections by requiring high standards for access to U.S.-held data.
Washington, D.C. – Today, NetChoice applauded the news that the Clarifying Lawful Overseas Use of Data (CLOUD) Act would be included in the spending omnibus bill.
“The CLOUD Act is a commonsense bill that will improve civil justice in foreign countries while helping law enforcement to solve crimes and save lives,” said Carl Szabo, Vice President and General Counsel at NetChoice. “We’ve seen the failure of trying to force civil justice reforms on foreign countries. The CLOUD Act takes a new approach by positively incentivizing them instead.”
As written in our op-ed in Morning Consult, by requiring high stands of civil justice protections to be able to access U.S.-held data, the CLOUD Act will incentivize foreign countries to adhere to these standards.
“The inclusion of this legislation in the omnibus ensures that this pressing issue can be solved as soon as possible,” continued Szabo. “We look forward to the CLOUD Act being enacted, ensuring law enforcement has clear tools to access data held abroad while protecting the rule of law and civil justice.”
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.
Washington D.C. – Today, NetChoice welcomes news that the Remote Transactions Parity Act (RTPA) will not be included in the spending omnibus, allowing Congress to come up with a real solution to collect sales tax from online sales.
“RTPA never deserved a seat on the omnibus, since it was ridiculously hard for America’s small businesses that sell online,” said Steve DelBianco, President of NetChoice. “Congress should now find a better way to stop state tax collectors from harassing any business anywhere in the country, whichever way the supreme court rules on Quill.”
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.”
Washington D.C. – Today, NetChoice welcomed results from an opinion poll commissioned by the National Taxpayers Union showing that 65% of likely voters are opposed to rules that allow states to burden out-of-state businesses with in-state sales tax collection.
“This poll backs up what we have already found in our own research, that the public sees new sales tax burdens as a tax increase on small businesses and consumers,” said Steve DelBianco, President of NetChoice. “These measures would pass costs onto the consumer, in the form of taxes and limits on consumer choice and market competition.”
New burdens on small businesses to collect sales tax for states in which they have no physical presence would open them up to the compliance burdens of 12,000 taxing jurisdictions and subject them to audits from 45 states. Compliance costs would force many to take their goods and services offline.
“Opposition to this new tax burden was shared by members of both political parties. Liberals, conservatives, moderates, and independents all oppose this policy by a majority,” continued DelBianco. “We hope that lawmakers understand what these results mean for them – if they want the public to enjoy the benefits of recently passed tax cuts, don’t create new tax burdens that will undermine them.”
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.
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.
[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.”
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.”
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.
“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.”
“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.”