The intermediary liability pitfalls of choosing UK law vs. US law for content processors and providers.

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With common language and common cultural roots, many U.S. content providers and content management system operators are building relationships with content distributors and providers in the United Kingdom.  When the issue of choice of law comes up, many American companies don’t give much thought to agree to UK law.  After all, UK courts require the non-prevailing party to pay legal costs.

However, American content providers and processors should review their business practices prior to agreeing to UK law due to differing approaches to intermediary liability with respect to defamation.

Under Section 230 of the Communications Decency Act (Title V of the Telecommunications Act of 1997), “Interactive Computer Services” are immune from liability for defamatory statements posted or provided by third parties. 47 U.S.C. § 230.  This sweeping immunity from intermediary liability for republishing defamatory statements was in response to several court case, most notably Stratton Oakmont, Inc. v. Prodigy Services Co., 31063/94, 1995 WL 323710, 1995 N.Y. Misc. LEXIS 712 (N.Y. Sup. Ct. 1995), which had held that companies that exercise any modicum of editorial discretion over content and are notified of the existence of defamatory content are liable for defamatory comments posted.  This immunity was upheld in Zeran v. Am. Online, Inc., 129 F.3d 327, 331 (4th Cir. 1997), citing Congress’ intent to remove liability.for content processors and carriers both to encourage reasonable monitoring and because of the sheer volume of content many service providers deal with.

The definition of “Interactive Computer Service” includes “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server. . .” 47 U.S.C. § 230.  This definition is broad enough to include ISPs as well as content management services such as SaaS providers that process or distribute third-party content.

The United Kingdom still lives in a Stratton world where notification triggers liability. The United Kingdom is known for robust anti-defamation (libel and slander) laws. Prior to 2013, republishers and processors of online defamatory content were treated equally.  Updates to the Defamation Act, passed in 2013, allow for a defense against claims of posting defamatory statements online if,  “the operator shows that it was not the operator who posted the statement on the website.”  However, even then, such a defense can be defeated if the defendant operator can not identify the party who made the defamatory statement and fails to remove the statement after being notified of its existence.

This means that content processors, distributors, and managers doing business under United Kingdom laws must have staff and processes to manage claims of defamatory statements.  If you are in the business of content management, processing or distribution and your content sources create risk of defamation such as third-party news, opinion or comments, make sure you have the resources to respond or keep your agreements under United States laws.

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