Google Immune from Liability Under § 230 of the CDA for AdWords Content Created by Third Parties

Author: Matt Kellogg

In the Northern District of California, the District Court granted Google’s motion to dismiss in a suit claiming that Google had been complicit in fraud perpetrated through its AdWords program. Because the plaintiff did not allege that Google had helped to develop the offending content, Google was immune under § 230 of the Communications Decency Act of 1996, which shields website operators from liability for hosting unlawful content created by third parties.

In the U.S. District Court for the Northern District of California, Plaintiff Jenna Goddard brought suit against Google for its role in the allegedly fraudulent practices of mobile service subscription providers, or MSSPs. On December 17, 2008, the court granted Google's motion to dismiss for failure to state a claim, giving Goddard 30 days to amend her complaint in response to the court's decision.

MSSPs sell consumer products, including ring tones, news alerts, and Internet radio, for mobile devices. According to the complaint, because MSSPs bill the consumer by effectively adding charges to the consumer's general phone bill, the amounts are "largely unverifiable" and have "resulted in a high incidence of fraud." Goddard alleged that an MSSP had charged her for "unwanted mobile content services" after she followed an ad hosted on Google's AdWords platform, thereby making Google complicit in the MSSP's fraud.

Specifically, Goddard claimed that (1) Google's behavior violated the California Unfair Competition Law (UCL); (2) Google breached its own Content Policy; (3) Google was negligent in failing to follow its Content Policy; and (4) Google aided and abetted the MSSPs. In response, Google filed a motion to dismiss, arguing that § 230 of the Communications Decency Act of 1996 (CDA) immunizes it from claims based on third-party content.

The court began its discussion by examining the language and purpose of § 230. The court explained that, under § 230, a company that provides Internet-based services is free from liability for hosting or publishing unlawful content created by a third party. If the provider played a role in developing the content, however, it may lose its protection under § 230.

The Ninth Circuit's recent decision in Fair Housing Council of San Fernando Valley v. illustrates this distinction. In that case, the Ninth Circuit held that a website operator was immune from liability for content posted voluntarily by its users but that it was not immune for content that the operator required its users to provide in order to access the site. By contrast, the mere fact that the operator knew about user misconduct or that the website was operated for a profit was not enough to alter a finding of immunity.

Turning to Goddard's first claim under California's UCL, the court found that Goddard could not construe her claim to circumvent the application of § 230 and its immunity provisions. Goddard claimed that she was harmed by "Google's acceptance of tainted funds from fraudulent mobile content providers," but the court rejected this characterization of her claim because it would have nonetheless held Google responsible for publishing third-party content, in direct violation of § 230. The court relied on decisions in Gentry v. eBay and Doe v. MySpace, both of which denied comparable attempts at creative pleading by the plaintiffs.

The court rejected Goddard's breach and negligence claims on nearly identical grounds. To impose liability for either (1) failing to remove MSSP ads under Google's Content Policy or (2) negligently failing to enforce that policy would be to ignore § 230. The court looked to the Third Circuit's example in Green v. AOL, which came to a similar conclusion regarding a claim that AOL had breached its own policies. The court also distinguished the decision in Mazur v. eBay, which found that eBay was not immune only when it made "affirmative representations" that its policies had been followed. Because Goddard had not alleged any such affirmative representations by Google, her claim failed.

The court, however, did not accept Google's argument that its Content Policy was also protected by § 230(c)(2), which "encourage[s] efforts by Internet service providers to eliminate [objectionable] material by immunizing them from liability where those efforts failed." Relying on the reasoning of National Numismatic Certification v. eBay, the court said that Congress intended § 230(c)(2) to cover policies regarding only "obscene, lewd, lascivious, filthy, excessively violent, harassing, or other otherwise objectionable" content. Google's Content Policy dealt instead with normal business practices and thus fell outside the § 230(c)(2) exception.

Finally, the court characterized Goddard's aiding and abetting claims as a misreading of Fair Housing Council. Although the Ninth Circuit said in that case that "if [website operators] don't encourage illegal content . . . [,] [they] will be immune," Goddard incorrectly attempted to link "encourage" to the "substantial assistance or encouragement" aspect of aiding and abetting law. The court therefore found no aiding and abetting exception to § 230.

After granting Google's motion to dismiss, the court noted that Goddard would have a stronger claim if she could show that Google had collaborated in the development of the MSSPs' ads and therefore acted as an "information content provider" outside the protection of § 230. The court gave Goddard an additional 30 days to amend her complaint accordingly, though the court noted that "it appears unlikely" she would be able to demonstrate this kind of involvement. Goddard met the court’s deadline, filing an amended complaint on January 16, 2009.


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