🗞️ The Supreme Court of Facebook sends the Trump problem back to Zuckerberg

This week: Facebook’s internal court goes big, and Snapchat loses a key Section 230 decision. Plus: lawyers and lobbyists enter the crypto regulation space.

🧑‍⚖️ Inside the Facebook oversight board’s Trump decision

The Supreme Court of Facebook made its biggest ruling yet last week, telling Facebook it had to decide Donald Trump’s social media fate on its own. 

In January, Facebook suspended Trump indefinitely: The move followed an incendiary post by Trump on the day of the capitol riot. 

Facebook then asked its board of journalists, activists, professors, and former politicians about the suspension: Zuckerberg, as the New York Times reports, has compared the board to the Supreme Court, saying it was “made up of independent folks who don’t work for Facebook who ultimately get to make the final judgment call on what should be acceptable speech in a community.” Zuck saw the board as a mechanism for making decisions -- which Facebook says are binding --  that are too important for the company itself to make.

And this was a huge decision: The board agreed Facebook was justified in suspending Trump but said the suspension should not have been indefinite because the company had no established policies for making such a move. It told Facebook to decide whether to ban Trump forever or put him back on the platform, ironically giving Zuckerberg and other execs the power to make the type of consequential moves he didn’t want.   

Consider this a Marbury v. Madison moment

The advisory board illustrated its independence from Facebook and also acted a lot like the real Supreme Court. As Michael Barbaro commented on The Daily, “Facebook’s ‘Supreme Court’ is kicking a case back down to a lower court. In this case, to Facebook itself, and saying, you didn’t do this correctly, and it’s your problem to figure out how to do it correctly.” (The entire episode is worth a listen, as is a Q&A with a St. John’s law professor who has researched the board since its inception.) 

The Verdict

The advisory board gave Facebook six months to make its final decision on Trump.  

😬 The Snapchat lawsuit that may change years of legal precedent 

As we’ve written many times, Section 230, the law giving internet companies immunity from lawsuits based on content made by users, may undergo reform thanks to pressure from both sides of the political aisle.  

But a federal appeals court is already picking it apart, according to NPR. 

Snapchat was recently sued over the “speed filter” on its app: Three teenagers had been using Snap to document their 120 mph-plus drive on backroads in Wisconsin when they crashed into a tree and died. The family sued, arguing the Snap filter was partially to blame for their death. A trial court threw out the case, but the 9th Circuit Court of Appeals ruled it could proceed. 

Section 230 has traditionally kept these cases from getting far: But this time the court deemed the design of the app itself to be the problem, rather than the content created by the user. Judge Kim McLane Wardlaw wrote, "This type of claim rests on the premise that manufacturers have a 'duty to exercise due care in supplying products that do not present an unreasonable risk of injury or harm to the public.'"   

There’s no guarantee this will be more than a narrow ruling

For now, the case goes back to the original trial court. If that court also deems Section 230 inapplicable, then we could see some major legal questions arise.

In the meantime, experts anticipate trial lawyers to bring new cases against tech companies, albeit with limited success. "I don't think that this opinion actually will open up the Pandora's Box of saying, 'You can sue a website for how it's designed under all circumstances,'" Santa Clara law professor Eric Goldman told NPR.  

The Verdict

Given this new ruling, which contrasts with decisions made by the other federal appeals courts, the Supreme Court may be more likely to take up Section 230 in the near future.

👛 Crypto companies are hiring top lawyers and lobbyists to keep regulators at bay 

In case you needed another sign that cryptocurrency is here to stay: Lawyers are starting to get involved. 

Since the dawn of Bitcoin more than a decade ago crypto markets have been the wild west: Regulations have been minimal, and the ethos of decentralization has pervaded. Crypto assets, for instance, have been classified by Deloitte as intangible assets because nothing else fits. But the U.S. government considers crypto a commodity and uses the CFTC for regulation. Now that some 25% of investors have a connection to crypto the government is more likely to increase its involvement. 

So crypto companies are getting serious about the law: The number of lobbying contracts affiliated with crypto is already at 65, up from 20 in 2019, according to the New York Times. The industry filed a list of lobbying goals with the Biden administration earlier this year, asking for a “light regulatory approach.” 

They may have reason to worry: Biden’s treasury secretary Janet Yellen has expressed concern about crypto, saying, “It is a highly speculative asset, and I think people should beware it is extremely volatile.”

The Verdict

The company Ripple is especially leading the way for the crypto legal age. Its general counsel has pushed back against an SEC investigation and raised awareness for others in the industry. An intervenor in the Ripple lawsuit told the NYT, “The industry needs to accept that good legislation and regulation is what is required, not no regulation.”