Canada is doing a crappy job of protecting its web users from defamation suits – and that’s bad news for anyone north of the 49th who carries on conversations, hosts websites or does business in virtual space. The central problem involves the legal rights of “Internet intermediaries,” a soporific term describing passive publishers of information – anyone from bloggers to Internet service providers.
The story really starts 12 years ago, when U.S. President Bill Clinton signed into law the Communications Decency Act. It was then the springtime of the World Wide Web, and many family-values types were worried that the seed of smut was finding fresh and fertile soil on the Internet; the act was intended to beat this back by regulating obscenity online.
Although the U.S. Supreme Court struck the act down as unconstitutional two years later, an important provision remained: Section 230, which declares that providers of “interactive computer services” are not legally liable for the words of third parties who use their services.
In other words, if you go on nytimes.com and spout off about what a criminal you think Rupert Murdoch is, Murdoch can come after you – but not after the New York Times. In the U.S., you’re liable only for yourself – not for what others say on your electronic “premises”: the comments, responses, reviews, tips, emails and other user-generated text on your website.
The rationale down south is that it’s for a court, not an intermediary, to decide what is defamatory. Section 230 provides immunity for every American intermediary, from the blogger who creates a forum for discussing cats up to the Google (GOOG-Q) behemoth – which, through its YouTube and Blogger arms, facilitates hundreds of thousands of comments daily. In Canada, however – where there has been very little case law around intermediary liability – we have no such protection. Our legendary politeness and accommodation serve us poorly; we’re responsible for all the words “spoken” on our websites – whether or not we created them or are even aware of them.
Lawyers are in the business of risk management. If you were Google and were facing a defamation suit from, say, a Vancouver businessman who felt his reputation was impugned by comments on a YouTube video, your lawyer would likely tell you to simply take down the video. And what do you think he’d advise a political blogger, small-business owner or other person without the means to fight a lawsuit on principle? Obviously, the potential for libel chill is enormous, and its effects malign more than just the quality of Canadian conversations on the digital frontier. Libel chill hurts our economic prospects.
It’s hard to overestimate the pace at which the world is moving into a digital economy, and Canada’s legal ambiguity around intermediaries is a drag on innovation and competition. The digital revolution is fundamentally altering the way we make goods and provide services; it's transforming industries and creating new categories of products and businesses – all at startling speed. Canada, which is already an also-ran in Internet speed and breadth of coverage, can scarcely afford to handicap itself legally as well. (Canada’s web connections, for example, are 13.5 times slower than Japan’s, and a full third of our population is still without access.)
The stakes are high. According to the Digital Economy Fact Book, online sales totalled $176.4 billion in 2005, an increase of 25 per cent over 2004; in 2006 they reached $211.4 billion, a 20 per cent increase. Experts forecast double-digit growth for the foreseeable future. Today some 280 million blogs exist worldwide – 60 times as many as there were three years ago. Those of you still working in the brick-and-mortar economy, take note: by 2010, 70 per cent of the developed world will spend 10 times as much time interacting with people electronically as physically. That’s a lot of comment, a lot of potential libel – and a lot of money to be made.
The Internet is now a commercial commons as much as it is a wellspring of information. A more punitive liability model made sense in the past – when large companies dominated the media, and news and entertainment originated with the few firms that had the means of production – but it makes sense no longer. In this great upwelling of online participation and opportunity, a majority of us are not only consumers of media but hosts and producers of it too. It’s for this reason that our legal protection as intermediaries should be made certain.