The Big Story: 30 years of Section 230 supporting user expression online, despite continued scrutiny
For the last 30 years, Section 230 has successfully supported innovation and user expression online, but many critics, including some in Congress, continue to call for the law’s repeal. While often criticized in the context of controversial content moderation decisions made by large social media companies, Section 230—passed as part of the Telecommunications Act of 1996—applies to Internet companies of all sizes that host content created by someone else, ensuring that they can host, surface, and moderate that content as they see fit without risking ruinous legal costs.
Section 230 allows Internet platforms to seek early dismissal of lawsuits over third-party content, shortening a legal process that would easily consume a startup’s limited time and resources—ultimately removing the ability of bad actors to use legal threats to force platforms into making content moderation decisions. As we explained in testimony in 2024, this legal framework is especially critical for startups and other small websites that host user content—including comments, messages, reviews, images, videos, files, and more—and lack the time and resources to fight expensive, drawn-out legal battles. Even successfully defending against a lawsuit over user content could cost hundreds of thousands of dollars, quickly eating away at many months of the average seed stage startup’s runway. Absent Section 230, Internet platforms looking to avoid ruinous litigation centered on user content they don’t have control over would have to either over-remove user content to avoid anything that might get them sued or abandon content moderation efforts altogether to avoid being held legally liable. Those two outcomes would cut against the stated goals of many of Section 230’s critics, including the lawmakers behind a bill introduced late last year to sunset Section 230—which was the focus of an event on Capitol Hill this week—in the name of preventing harm to children.
Lawmakers understandably want Internet legal frameworks to support expression and innovation while empowering Internet companies to keep their corners of the Internet safe, healthy, and relevant for users. For startups and other small Internet platforms hosting a wide range of content, created and shared by diverse communities of users, Section 230 is the tool that empowers them to host and moderate user content in the ways that make the most sense for them and their users.
Policy Roundup:
SBA restricts access to small business loan program. The Small Business Administration announced new guidance requiring 100 percent U.S. citizen ownership for businesses seeking loans through its primary 7(a) program, reversing a prior policy that allowed limited ownership by green card holders. The change, set to take effect March 1, will exclude legal permanent residents from accessing one of the most widely used sources of government-backed small business capital.
U.S. to pursue permanent moratorium on digital tariffs. U.S. Ambassador to the World Trade Organization Joseph Barloon indicated this week that the U.S. will push for making permanent the moratorium on the imposition of customs duties on electronic transmissions at next month’s Ministerial Conference. The moratorium—which supports U.S. startup success by preventing digital tariffs—has existed since 1998 and been periodically renewed. Barloon underscored that further conference-by-conference extensions don't “give businesses the type of certainty” they need. Barloon’s comments come as President Trump announced progress on a long-delayed trade deal this week with India, a frequent skeptic of the moratorium.
Lawmakers review AI’s growing role in the workforce. A House Education and Workforce subcommittee held a hearing on AI adoption in the workplace this week, which included a broad discussion of state AI laws, the need for AI upskilling, and how to gather better data on AI in the workforce. Witnesses and members from both sides of the aisle underscored the need for federal action on AI to both promote innovation and ensure AI benefits the public.
On the Horizon:
TUE 02/10: The Senate Indian Affairs Committee will convene a hearing to examine the Small Business Administration’s Native 8(a) program and its role in supporting Native-owned small businesses at 10:00 AM ET.
TUE 02/10: The Senate Appropriations subcommittee on commerce, justice, science, and related agencies will convene a hearing to review broadband deployment funding at the Department of Commerce at 9:30 AM ET
WED 02/11: The House Education and Workforce subcommittee on workforce protections will convene a hearing to discuss how technology can support safer workplaces and workforce protections as AI adoption grows at 10:15 AM ET.
WED 02/11: The National Telecommunications and Information Administration will convene a virtual roundtable session on broadband funding at 2:00 PM ET.
Startup Roundup:
#StartupsEverywhere: New York, New York. Despite decades of technological innovation, filing an insurance claim today remains as unnerving, unclear, and unpleasant for the policyholder as it was 30 years ago. Regina Jaslow decided there needed to be a way to improve the insurance claims process for all stakeholders involved, from the policyholder to the insurance carrier, and everyone along the way that is involved in the claims process. We recently had the opportunity to chat with Regina about her company Innocuous, her product, and why it’s important to engage with regulators about the realities of AI in the insurance sector.
