Debates about the intermediary liability framework provided by Section 230 have animated policy conversations as lawmakers grapple with harmful online content, including around election integrity, health information, and children’s safety. But those debates are almost exclusively focused on the largest Internet companies. Section 230, however, applies to all services of all sizes that host all types of user-generated content, including startups.
Section 230 helps startups avoid being inundated with lawsuits over their users’ speech and limits potentially-ruinous legal costs. Startups still have incentives to invest their limited time and resources in content moderation, including, for example, to ensure that content appearing on their site is useful and relevant to their users or within their terms of service. In fact, Section 230 ensures they won’t be held liable for users’ speech even though they’re active moderators. Despite startups’ efforts, content moderation is inherently imperfect. Placing even higher, unrealistic expectations on startups—such as opening the door to lawsuits when a startup inevitably fails to perfectly and immediately remove harmful content—could take content moderation costs from burdensome to catastrophic, or even push startups to avoid hosting user content entirely.
To better understand how startups moderate content on their services, how that differs from mid-sized online service providers, and the value of Section 230 for startups, we surveyed and had conversations with user content-hosting startups in the Engine network, mid-size online service providers, and attorneys that work on 230-related cases. (We originally released a document on the costs of 230-related litigation in 2019. We confirmed that the figures below are accurate as of 2021.) As the responses show, startups have limited resources to moderate content on their sites, but they spend more per user than mid-sized content-hosting companies. And, even with Section 230 in place, defending against lawsuits involving user speech online can quickly become expensive.
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