The Volokh Conspiracy - A Cyberlaw Connection to the Bloomberg Fiasco:

There's an interesting little cyber-law connection to the Bloomberg f***-up that sent out the (false) news that United Airlines had entered Chapter 11, and that sent United stock tumbling in a matter of minutes on Monday (wiping out more than $1 billion in shareholder value in less than an hour before trading was halted).

According to the Int. Herald Tribune/NY Times,

"United blamed an old Chicago Tribune article that, it said, was posted on the Web site of The South Florida Sun-Sentinel newspaper. That article was picked up by a research firm, Income Securities Advisors, which then posted a link to it on a page on Bloomberg News, which sent a news alert based on the old article."

If United (or United shareholders) are thinking (as they may well be thinking) of suing Bloomberg for the damage, they will come up against an important little principle of US law that cyber-law folks are very familiar with but which may be unfamiliar to others. Section 230 of the Communications Decency Act, which was part of the Telecomm Reform Act of 1996, provides that

"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."

It's not the most artfully-drafted statutory section around (what exactly does it mean to "treat" an entity "as the publisher or speaker" of information?), but it has been interpreted -- somewhat controversially, but plausibly, in my own opinion -- to provide a near-blanket immunity for online information redistributors (like Bloomberg) from all liability arising out of that redistribution. (Important exception: the statute expressly provides that IP claims (e.g., copyright or trademark) are not affected by this provision). Bloomberg is clearly a "provider of an interactive computer service" (defined as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server"), and the information that United had entered bankruptcy was clearly provided by "another information content provider" (defined as "ny person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service). So Bloomberg cannot be treated as the publisher or speaker of that information. I don't think we know for sure whether that would immunize it from e.g. Securities Act liability, for example -- but I'm pretty sure that it would.

Among the interesting things about section 230 is that it only applies online. That is, had Bloomberg published the same information via a hardcopy newsletter, they'd have a liability nightmare on their hands. But because it was online, they have sec. 230 to protect them.

	[David Post, September 10, 2008 at 9:40am] Trackbacks A Cyberlaw Connection to the Bloomberg Fiasco: There's an interesting little cyber-law connection to the Bloomberg f***-up that sent out the (false) news that United Airlines had entered Chapter 11, and that sent United stock tumbling in a matter of minutes on Monday (wiping out more than $1 billion in shareholder value in less than an hour before trading was halted). According to the Int. Herald Tribune/NY Times, "United blamed an old Chicago Tribune article that, it said, was posted on the Web site of The South Florida Sun-Sentinel newspaper. That article was picked up by a research firm, Income Securities Advisors, which then posted a link to it on a page on Bloomberg News, which sent a news alert based on the old article." If United (or United shareholders) are thinking (as they may well be thinking) of suing Bloomberg for the damage, they will come up against an important little principle of US law that cyber-law folks are very familiar with but which may be unfamiliar to others. Section 230 of the Communications Decency Act, which was part of the Telecomm Reform Act of 1996, provides that "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." It's not the most artfully-drafted statutory section around (what exactly does it mean to "treat" an entity "as the publisher or speaker" of information?), but it has been interpreted -- somewhat controversially, but plausibly, in my own opinion -- to provide a near-blanket immunity for online information redistributors (like Bloomberg) from all liability arising out of that redistribution. (Important exception: the statute expressly provides that IP claims (e.g., copyright or trademark) are not affected by this provision). Bloomberg is clearly a "provider of an interactive computer service" (defined as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server"), and the information that United had entered bankruptcy was clearly provided by "another information content provider" (defined as "ny person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service). So Bloomberg cannot be treated as the publisher or speaker of that information. I don't think we know for sure whether that would immunize it from e.g. Securities Act liability, for example -- but I'm pretty sure that it would. Among the interesting things about section 230 is that it only applies online. That is, had Bloomberg published the same information via a hardcopy newsletter, they'd have a liability nightmare on their hands. But because it was online, they have sec. 230 to protect them.