Yahoo Finance Live’s Julie Hyman breaks down Section 230, which was enacted as part of the Communications Decency Act of 1996, and what would happen if social media platforms did away with moderation.

Video Transcript

BRAD SMITH: At the heart of Section 230 is the issue of content moderation. Content platforms, including social media companies, could make some big changes if they're made to assume responsibility for their users' posts. So Julie, why should I care about it?

JULIE HYMAN: Well, I mean, everybody who uses the internet should care about this, right? Section 230 has been a hot topic of discussion, not ever since it was created, but almost, right? It was part of the 1996 Telecommunications Act, really in the early days of the internet. And based on some court cases that happened around that time, and as Alexis was just talking about, it is designed to protect the hosts of content from being held liable for that content.

So here's the text that was in Section 230 that really everybody talks about no provider or user of an interactive computer service shall be treated as the publisher or speaker of information provided by another information content provider. In other words, if I type something on the internet and send it out there or post a video, et cetera, the host of that content cannot be held liable. That's basically what this said.

So just to put a little bit of a fine point on it here, if you talk about the analog world, the world in which I am standing right now, and you look at some things that are like that. If, for example, I'm a bookstore, or I own a newsstand, I cannot be held liable for the books that I sell or the papers that I sell at my establishment.

That is precedent in some court cases where the Supreme Court or other courts ruled that if I have, for example, what is deemed an offensive book that I'm selling at my bookstore, I can't be expected to know the contents of every book in my bookstore or every newspaper on my newsstand. So that's what precedent had said. So they are not libel for speech or for speech that is seen as offensive.

Publishers, however, can be held liable. So if I publish a book that is deemed as offensive or if I publish a newspaper that has libel, for example, or lies about someone, or knowingly something that is factually incorrect, I can be held liable. And so in this analogy, basically, the online services are more like the booksellers or newsstands. They disseminate the information, but they do not publish the information.

So those pushing for changes to Section 230, that is effectively what would change. If Section 230 goes away, why should you care? Well, it can mean big changes for the internet here. Alexis was just talking about this somewhat as well, that there would be a lot more liability for the likes of a YouTube, or Twitter, or Facebook, what have you.

So what could happen? Well, some social media sites might say, we're going to get rid of moderation entirely because that way, we are not making decisions on what speech is or is not. So sort of take a hands off approach. On the flip side of that, social media sites could drastically cut down on certain types of content.

For example, there was a new law put into place in 2018 that gave new tools to authorities who were cracking down on sex trafficking online. So Craigslist, for example, in advance of that law, got rid of a section of its website that perhaps, even though, of course, it wasn't designed for that to have sex trafficking, but critics said that it was a place where that could happen. They got rid of that part of the site entirely.

So we could see more changes like that, Brad. It's sort of it could go in one direction or another. There are some other changes that could happen too. But of course, it might not be the Section 230 gets scrapped entirely. Congress, as it's talked about for a long time, could rewrite the law or come out with another version of Section 230. As I said, they've talked about it for a long time. They haven't done anything.

BRAD SMITH: You've convinced me. I officially do care a lot now.