ANALYSIS: User Terms May Dull the Effect of a Section 230 Change

Social media user terms could soften the potential impact of the latest push to curb the tech liability shield known as Section 230 of the Communications Decency Act. A proposed bill would allow allegations of injuries caused by “malicious algorithms” to pierce Section 230. But common protections in user terms may bolster platforms’ legal defenses.

The proposed Justice Against Malicious Algorithms Act is one of several recent efforts to reform Section 230, which generally bars claims arising from third-party online content. If it passes, as unlikely as that appears to be, social media platforms would largely be prohibited from raising Section 230 to defend against claims that a personalized recommendation “materially contributed” to a physical or severe emotional injury. In other words, if a platform’s algorithm relies on a user’s personal data to promote particular third-party content, that user could sue the platform for resulting injuries in spite of Section 230.

We recently looked at how contract claims that sneak past Section 230’s protections could be mitigated by user terms. We also examined how user terms are often a major obstacle to copyright infringement claims. But could user terms also help protect platforms from the tort-based claims of “physical or severe emotional” damage envisioned by this proposal? Based on an analysis of standard provisions, the short answer is yes—especially in cases where the link to a physical injury is highly speculative.

The table below summarizes the terms of service maintained by five companies identified by Bloomberg Intelligence as having exceptional digital ad revenue growth: Alphabet (YouTube’s parent), Facebook, Twitter, Snapchat, and Pinterest.

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Of course, even the most stringent terms may still be challenged in court. Revoking Section 230 protections could therefore result in a significant increase in litigation and related expenses for social media platforms. But ultimately, platforms would still likely succeed in getting many claims of algorithm-based harms dismissed by arguing that users bargained away their rights—particularly whenever courts find that a plaintiff’s alleged injury was largely economic.

Bloomberg Law subscribers can find guidance on drafting engagement and services agreement terms, including for social media influencer marketing contracts, on our Practical Guidance: Engagement & Services Agreements resource page.

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