Big Tech Can’t Hide Behind Section 230 Anymore

A federal judge just obliterated Big Tech’s favorite legal shield, section 230, ruling that Apple, Meta, and Google must face lawsuits for hosting casino-style gambling apps. Allegedly, these apps fueled gambling addiction, while the companies skimmed a 30% commission off the top, earning around $2 billion. Content moderation is not under contest here, the money is. 

For years, these apps have asserted that they’re a mutual market place and can’t be held accountable for what happens on those platforms. But when they profit directly from those harmful apps, the neutrality crumbles. The ruling doesn’t just open the doors for a lawsuit but challenges the entire economic model of app stores. 

Myth of Neutrality

The court rejected the defense under Section 230. The section is Section 230 of the Communications Decency Act (1996), is a legal immunity that states that “If you run an online platform, you’re not legally responsible for what users post on it.” but the court asserted that platforms that charge a 30% payment processing fee and push the content to users aren’t neutral, they’re active business partners. The precedent is massive. The legal immunity that shielded these tech giants for decades is suddenly under question. 

This means that any platform that earns money from a third-party content is up against a significant legal risk. Amazon can’t hide behind “We just host it” while selling counterfeit goods; Youtube can’t claim neutrality while monetizing misinformation; and app stores can’t profit from gambling apps by ranking them high or advertising them and stay unanswerable for them. 

Beyond Antitrust

Usually, Antitrust cases try to reshape markets, this one aims bigger. It tears down the legal shield that protects trillions in platform profit. If courts decide that processing payments would be counted as active participation, fin-tech apps like Stripe, PayPal, and Square, could face similar action for facilitating risky or harmful transactions. 

Till yet, the platform economy depends on the idea that intermediaries aren’t responsible for the apps they host. The ruling suggests otherwise. The business model which goes by the philosophy of “platform as neutral middleman” is on a shaky ground now and some of the most profitable companies are under a real legal risk. 

What Comes Next

The casino was always in their pocket and now the court is forcing them to come clean. The ideal result would be that the platforms soon start taking responsibility for the content and transitions they profit from. 

But, we have seen this movie many times before. Apple, Meta, and Google will file an appeal and try dragging the court battle over the years ultimately settling on a fine that is barely more than a parking ticket compared to the profit they have earned so far from these apps. 

Anyhow, the emphasis is less on the money and more on the precedent here. The bold claim of neutrality is under the radar and if nothing, it at least opens avenues for further reformation (Hopefully so).