Blown To Bits

United Airlines and the Communications Decency Act

Friday, September 12th, 2008 by Harry Lewis

United Airlines is the company whose stock lost most of its value — a billion dollars, give or take a few — when Bloomberg News posted a headline of an old article stating that UAL had declared bankruptcy. UAL had indeed declared bankruptcy, but that was six years ago. The misleading headline triggered a sell-off that nearly wiped out the entire value of the company’s stock in a few minutes. Hal blogged this a few days ago.

People lost a lot of money because of this mistake. Who’s responsible, and is anyone liable?

Google returned the old article in response to a query for “bankruptcy 2008.” Not clear why that happened, but I’ve been noticing some old articles turning up in response to Google Alerts the past few days. Maybe they are doing some re-indexing. Whatever — it’s hard to hold Google responsible for what happened later, and you certainly couldn’t consider them liable. They make no promises about their search results. Bloomberg and the service that fed the article to Bloomberg misused the information that came back from Google.

It feels like Bloomberg should be on the hook. They posted the headline without checking its accuracy, as would have been trivially easy to do. But they aren’t liable, because of the provisions of Section 230 of the Communications Decency Act, the Good Samaritan Clause. As we explain in detail in Chapter 7, this clause says:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

This law was meant to encourage Web site operators to make their sites child-friendly without running the risks a print publisher would incur if they missed something obscene or slanderous. But it’s a blanket get-out-of-jail-free card for businesses like Bloomberg, which post things others have reported.

So the folks who lost that billion dollars can’t collect from Bloomberg. Ironically, Hal described what happened in slightly incorrect language, saying that the selloff happened because of “Bloomberg News Wire printing a one-line note.” Not printing actually, but posting online. If Bloomberg had actually printed it on paper, CDA Section 230 would not apply, and Bloomberg might be in big, big trouble!

Thanks to a poster from the Volokh Conspiracy for pointing this out.

One Response to “United Airlines and the Communications Decency Act”

  1. Ron Thomas Says:

    I’m one of the students using this text in the current course at the Harvard Extension School and one of our assignments is to check out the accompanying blog. This blog entry resonated for a couple of reasons. Since I work at an aeronautical university, airline story always catch my eye.

    Plus, this morning, as I was getting ready for work I was reviewing last night’s DVR captures, which included MSNBC’s replay of 9/11 “As It Happened.” My mother, who’s visiting, passed through the living room, and gasped “What happened now?” so I had to explain.

    So, basically, just as truth is an absolute defense in libel, is “I only passed it along” an absolute defense in rumor-mongering? Who needs opposition research when a chain letter will do?