Report: Section 230 Enables American Innovation to Flourish, Igniting Investment Opportunities for Startups

US internet companies are ten times as likely to raise over $100 million in venture capital compared to EU internet platform businesses

WASHINGTON, DC – NetChoice, a trade association committed to make the internet safe for free enterprise and free expression, today hosted the release of a new report – Don’t Shoot the Message Board – revealing the positive economic impact of Section 230 of the Communications Decency Act on the US economy and the ability of American companies to innovate and receive strong investments.

Authored by the Copia Institute, the report reveals that US companies are five times as likely to raise over $10 million in venture capital, and ten times as likely to raise over $100 million in venture capital compared to those in the EU. These benefits to the US economy and businesses are attributed to the assurances and broad immunity provided by Section 230.

The report, using cross-regional comparisons, as well as changes over time within certain

countries, explores how different levels of platform protections from liability impact investment and innovation. According to the report:

  • Section 230 continues to enable strong economic growth. There is a direct correlation between countries with intermediary liability protections like Section 230 and economic growth. Over the next decade, Section 230 will contribute a further 4.25 million jobs and $440 billion in growth to the US economy.
  • Section 230 enables a world-leading, innovative and competitive tech industry. After Section 230 was put into law, investment in internet platform businesses tripled.
  • Limits on liability offered by Section 230 resulted in two to three times greater total investment in internet platform businesses in the US as compared to the more limited protections offered in the EU and under the E-Commerce Directive
  • Section 230 is credited with creating “a trillion dollars in value” and is a driver for American job creation.
  • US platform companies are five times as likely to be able to raise significant funds (over $10 million in venture capital) and ten times as likely to raise massive funds (over $100 million in venture capital) due to these stronger protections from Section 230 than those in the European Union.

Mike Masnick, CEO of the Copia Institute, added: “This report reaffirms that Section 230 is vital for strong investments and innovation around the country.”

“With the strong data presented in this report, there is no denying the fact that American innovation and start-up success is directly linked to the confidence provided to investors under Section 230,” said Carl Szabo, Vice President and General Counsel of NetChoice.

“Not only does Section 230 empower communities and voices across the United States, it also ignites American innovation and American economic prosperity with rippling benefits to all that utilize internet-based platforms.”

For more information and a downloadable copy of the report, please visit this webpage.

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