Tech's liability shield becomes trade-deal flashpoint

New opposition from House Speaker Nancy Pelosi this week left the tech industry at risk of losing a cherished trade deal provision that could help cement its liability shield.

Driving the news: Section 230 of the Communications Decency Act protects online platforms from liability for content their users post, and Pelosi cited the U.S.-Mexico-Canada Agreement's extension of its principles to U.S. trade partners as a sticking point for getting the trade deal through Congress.

The big picture: While tech companies have been pushing to extend their Section 230 protection to other countries, the provision has faced new criticism from a collection of industry groups, advocacy organizations and lawmakers amid a debate on revising or eliminating the law.

Why it matters: If Congress ever wants to change Section 230, it will be easier if the law's provisions aren't also woven into an international treaty.

What they're saying: Pelosi's position was first reported by the Wall Street Journal.

• “There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements, particularly at a time when Congress is considering whether changes need to be made in U.S. law," a Pelosi spokesperson said.
• House Energy & Commerce Committee Chairman Frank Pallone and Ranking Member Greg Walden voiced concerns about including language similar to 230 in trade agreements in a letter this summer to U.S. Trade Representative Robert Lighthizer.
• But Walden tweeted Thursday that he meant the committee should be consulted on future trade agreements dealing with platform liability issues, and offered his support for USMCA.

Tech industry groups the Internet Association and the Consumer Technology Association both called for the provision to remain in the trade agreement.

• "Inclusion of Section 230 language in trade agreements does not stop the US from changing the law in the future should choose to do so," CTA senior vice president Michael Petricone said in a statement.

But the content industry, labor unions, anti-trafficking advocacy groups and lawmakers have been clamoring to get rid of the provision in trade agreements.

• Content groups, like the Recording Industry Association of America, have opposed including the provision in trade agreements in part due to fears that other countries could implement the law in a way that endangers copyright protections.
• UNITE HERE, a labor union that counts hotel workers among its 300,00 members in the U.S. and Canada, penned a letter to Pelosi to voice its "strong opposition" to the "cynical inclusion" of the 230-like language. The group called out Airbnb specifically in its letter to Pelosi.
• "There’s just a greater realization across the board from organizations and members of Congress that the status quo is not acceptable on Section 230 and that changes need to be be made," said Rick Lane, a former Fox lobbyist who helped coordinate efforts on the sex trafficking carve-out of Section 230. "Congress needs to have a free hand to make those changes and should not be hindered by trade agreements."

Flashback: The tech industry already lost a major fight over 230 when Congress passed a carveout to the law that will make it easier to sue platforms for hosting sex-trafficking content.

• Since then, lawmakers have floated other changes to the law to address a slew of harms ranging from opioid sales to child exploitation. But tech companies say weakening the law could put them out of business and endanger free expression online.

Between the lines: The tech liability shield was not one of the four major concerns Democrats highlighted with the trade agreement earlier this year — enforcement, labor, environment and drug pricing.

• People familiar with the administration's thinking on the negotiations said it isn't viewed as one of the key points that will make or break the deal.
• But Rep. Jan Schakowsky, who is part of the Democrats' trade working group, raised the issue with Pelosi after becoming more concerned about the provision's presence in the deal.

"There is bipartisan concern about how Big Tech is using the liability shield afforded to it by CDA Section 230 ... This is precisely the wrong time to bake this law into trade agreements."

What's next: The USMCA was signed a year ago but approval by Congress has awaited a deal that might satisfy Democrats in the House, Republicans in the Senate and the Trump administration — as well as their counterparts in Mexico and Canada.

Our thought bubble: Trade deals are always messy compromises, and the sheer lure of boosting commerce all around often overrides different interests' priorities.

Go deeper: A new attack on social media's immunity