Theme: Legal Liabilities of Online Platforms in the United States

Presenter: Yan Shaomin, Secretary-General of JD Institute of Legal Studies

Free Discussion:

Liu Xiaochun, Executive Director of the Internet Law Research Center, University of Chinese Academy of Social Sciences：

      The literature reviewed today lays out a clear logical thread concerning U.S. online platform liability exemptions and shifts in relevant regulatory policies. FTC settles most of its regulatory cases through settlement orders. The downside, however, is the lack of transparency inherent to this mechanism, which impedes the formation of effective institutional rules. In comparison, China places greater emphasis on ex ante regulation, creating a sharp counterpoint to the FTC’s enforcement model. In common law systems, legal rules evolve in the process of law enforcement and take shape through the comparison and interplay of judicial precedents. Regulatory rules in the United States take a bottom-up, flexible and reality-adaptive approach, rather than relying on highly abstract or blanket solutions. This model, however, is premised on a high level of public trust in the judiciary. Nevertheless, simply transplanting the U.S. regulatory model would lead to poor adaptation to China’s national conditions. If stringent ex ante compliance mechanisms are universally enforced in data governance, enterprises will inevitably bear substantial additional costs; yet leaning entirely to the opposite extreme will also bring about drawbacks. China still needs a definite regulatory framework. Exclusive reliance on case-by-case evaluation may trigger new challenges, so a balanced middle path must be pursued.

      The issue of platform liability exemptions in China involves far more than free speech and false news. In China, once an industry holds the prospect of speculative gains, a host of profit-driven speculative industries will spring up, leading to rampant black and gray industrial chains. Such challenges cannot be accommodated within the U.S. regulatory framework. While content moderation is indeed a paradigmatic issue of platform responsibility, many novel problems unique to China also deserve equal attention.

Shen Weiwei, Ph.D. from the University of Pennsylvania：

      Two landmark cases are mentioned in the first article: Cubby and Stratton Oakmont. Though over thirty years have elapsed since these judgments, the legal issues they address remain highly pressing to this day. U.S. online platform liability inherently raises First Amendment questions concerning the transformation of a platform’s role from a content distributor to a content speaker — specifically, whether platforms ought to incur greater liability once they modify or curate user-generated content. This formed a core contextual backdrop for the enactment of Section 230.

      Furthermore, an interesting observation is that Section 230 serves as a liability immunity provision. While the United States imposes stringent legal regulations on platforms in numerous fields, it may not have equivalent rule comparable to China’s "Nine Prohibitions". Even so, prior to the adoption of Section 230, the U.S. regulatory system was burdened with what may be figuratively described as "999 prohibitions". At that time, the Clinton administration recognized the promising prospects of internet development and judged that such sweeping prohibitions would hinder industrial growth. It therefore introduced Section 230 to grant platforms liability immunity. The subsequent ruling in Zeran substantially expanded the scope of this immunity. This gave rise to a well-known view widely discussed in academic circles: "Section 230 laid the groundwork for the rise of Silicon Valley." By contrast, China’s original internet regulatory system differs drastically from that of the United States in both legislation and enforcement. Paradoxically, it produced effects analogous to Section 230 by furnishing platforms with a relatively liberal operational space, which fueled the rapid expansion of China’s internet industry. As scholar Hu Ling put it, the domestic internet sector achieved its "unregulated rise". It can thus be said that despite their different legal and institutional backdrops, China and the United States arrived at identical outcomes with respect to platform regulation and the corresponding growth of their digital industries, taking separate roads to the same destination.

      Lastly, it is worth noting that the legal standing of Section 230 has undergone constant shifts over the past two decades. For instance, several U.S. states have enacted legislation and secured court judgments to override Section 230 protections, alongside a host of lawsuits challenging its scope, such as the Roommates.com case cited in the article. Meanwhile, Section 230 principles are seeing a trend of cross-jurisdictional expansion. 

Ding Xiaodong, Associate Professor, Renmin University of China Law School:

      These two papers offer limited novel theoretical insights and center mainly on lucid factual accounts. The first one reviews the two-decade history of online platform liability immunity. U.S. platform liability regulation is marked by prominent path dependence, since its earliest legal debates revolved around the classification of platforms: should they be treated as speakers, editors, newsstand-like distributors, or live television broadcasters? CDA230 defines platforms as neither speakers nor editors, which drastically reduces their legal liabilities and exempts them from duties comparable to those of book editors. The Zeran case further expanded platform immunity through interpretations of CDA230. Undoubtedly, CDA230 now faces a series of challenges, and the corresponding responses remain to be seen. Conceptually, CDA230 presumes platforms to be "good-faith moderators". Logically, platforms may need to bear heavier self-governance obligations to sustain immunity protections. The second paper analyzes platform liability from the FTC’s perspective. It holds that the FTC’s harm-and-enforcement-based approach remains generally viable and adjustable to emerging challenges. The FTC’s in-process and ex post regulatory model differs vastly from China’s and may not be applicable domestically. China maintains relatively strict ex ante regulation, and regulators tend to resort to preemptive oversight even after incidents occur. There is room for institutional optimization: we could adopt a more prudent stance on ex ante rules while ramping up in-process and ex post supervision.

Xiong Bingwan, Research Fellow, Renmin Law and Technology Institute, Renmin University of China:

      As the speaker and guests have pointed out, the two papers put forward many questions worthy of further research. From a descriptive perspective, the first article elaborates on the two-decade evolution of U.S. online platform liability models, which raises a key question: what are the driving forces behind such evolution? Technological advancement serves as one explanation, yet it remains unclear whether technology acts as the primary driver or merely a facilitating precondition. 

      From a normative standpoint, neither of the two papers addresses the question raised by Shen Chen concerning the legitimacy basis of platform liability, a subject that may be analyzed in other academic literatures. Returning to the descriptive issues discussed earlier, China faces comparable challenges, exemplified by liability rules for cloud platforms. What scope of liability ought cloud platforms to assume? The answer depends not merely on their technical capabilities, but also on the authority conferred upon them by law. As for illegal activities that can only be uncovered through routine inspections on cloud infrastructure, regulators have not authorized cloud platforms to access other parties’ confidential data repositories. Under such circumstances, mandating cloud platforms to crack the databases of other data enterprises that utilize cloud services for the detection of illegal information may land cloud platforms in a dilemma of breaching contracts with their users. In this context, the bottleneck restricting platforms is not necessarily a lack of technical capacity, but rather the allocation of regulatory powers. At present, cloud platforms may persuade regulators not to impose general routine inspection obligations on them by stressing that such requirements run counter to international trends and undermine the global competitiveness of domestic industries.

Shen Chen, Postdoctoral Research Fellow, Renmin University of China:

      While reading these two papers, one question kept occupying my thoughts: what constitutes the normative legitimacy of platform liability. A platform, by definition, is an internet service provider that establishes service agreements with an unspecified multitude of users and facilitates interactions among those users — only such a structure qualifies as a platform. To draw an analogy to physical life, it is like an operator running a sports court where crowds come to play. In the offline world, if conflicts arise between players, they cannot hold the court owner accountable. Why, however, may platforms be held liable in the online sphere? I believe there are two analytical approaches to this question. The first proceeds from a transactional perspective: platforms may charge users fees or generate profits from user interactions. In return, they ought to bear an implied obligation to ensure user safety. This line of reasoning, however, raises a core question regarding how we should interpret the "consideration" underlying such liability. The second approach focuses on minimizing the overall social cost of dispute resolution. Given the inherent traits of cyberspace, once a dispute emerges, the costs borne by users—whether they resort to private self-help against one another or pursue public relief from state authorities—far outweigh the costs incurred if the platform handles the dispute internally. Nevertheless, this rationale is open to criticism: platforms are private actors, so what justification exists for imposing such social obligations on them? Accordingly, platform liability possesses legitimate grounds under either analytical framework, yet its scope is subject to inherent proportional limits.

Wang Yanhui, Doctoral Candidate in Legal Theory, Class of 2018:

      The Mode of Legal Professionals’ Reasoning: at the macro level lies the normative analytical approach, which adheres to the dichotomy of facts and norms. When factual social relations evolve, we analyze corresponding shifts in legal relations and examine whether traditional legal dogma can accommodate emerging legal subjects, objects, rights and obligations. Facts merely raise legal questions, which legal practitioners must address from a normative standpoint. The crux is not the design of regulatory mechanisms, but how to strike a balance among the interests of all relevant parties.

      Deep Integration of Law and Technology: the gradual advancement of information technology has given rise to a new mode of life featuring integrated virtual and physical realms as well as human-machine interaction. The reason why this information revolution is disruptive is that it has transformed people’s modes of communication. The online and offline spheres can no longer be completely separated, and digital elements are inseparably embedded in all human conduct. Accordingly, when analyzing legal issues—namely, assessing the nature and consequences of human behavior—this third digital dimension must be taken into account, which has brought platforms into being as an intermediate actor standing between the state and individuals. At the same time, legal regulatory methods and adjustment tools have become increasingly technical, a phenomenon known as the codification of law. Meanwhile, technical rules formulated by platforms, having been refined and validated through practice, are progressively incorporated into state laws, a process referred to as the legalization of code.

      Specific Reflections on Platform Liability: Drawing on the core arguments of the two papers, two primary themes stand out. First, regarding platform liability for user-generated content, the immunity provisions under Section 230 carve out a regulatory enclave to create breathing room for innovation in new technologies. Second, the FTC, as a public authority, has shifted its regulatory focus from antitrust enforcement to consumer rights protection. Synthesizing these observations yields two lines of analysis. For one thing, the papers reveal intricate overlapping relationships among all market participants, making it impossible for platforms to remain detached from such complex interactions. For another, regulation is visibly growing stricter after an era of broad immunity. This shift compels us to confront the risks of a "winner-takes-all" dynamic spawned by the alliance between capital and technology. The formation of such monopolistic power inevitably triggers constant trade-offs in regulatory philosophy, as exemplified by disputes over users’ privacy rights.

Editor:Xu Liuya

Reviewer: Zhu Peiwen