Monopolies of Misinformation: How Competitive Markets Can Improve Public Dialogue.

• Author: Bogert, John

TABLE OF CONTENTS I. INTRODUCTION 199 II. BACKGROUND 202 A. Section 230 and Misinformation Politics 202 1. Section 230's Law 202 2. Misinformation's Politics 204 B. Section 7 and the Antitrust Reform Movement 206 1. Section 7 Within the Broader Antitrust Law Context 206 2. The Antitrust Reform Movement 214 C. Constitutionality of Regulating Markets and Speech 216 1. Speech Regulation and the First Amendment 216 2. Market Regulation and the Commerce Clause 217 D. Social Media Market's Network Effect 217 III. ANALYSIS 219 A. Difficulty of Section 230 Reform 219 1. Proponents of Section 230 Reform Pursue Politically Irreconcilable Goals 219 2. Amending Section 230 Risks Constitutional Criticism or Ensures Regulatory Regression 219 B. Viability of Section 7 Reform 220 1. Amending Section 7 Enjoys Constitutional Permission and Bipartisan Appeal 220 2. Strengthening Section 7 Mitigates the Harms of Misinformation 222 C. Section 7 Reform's Role Within Whole-of-Government Action 223 IV. CONCLUSION 225 I. INTRODUCTION

The Pacific Northwest tree octopus (Octopus Paxarbolis) is unique among cephalopods for its ability to survive on land, where it inhabits the tree canopies of the Olympic Peninsula's temperate rainforests. (1) It is also completely fictional and the subject of a notorious 1998 Internet hoax now "commonly used in Internet literacy classes" to teach students responsible Internet browsing. (2)

However, the lesson appears not to have stuck with students, and now misinformation plagues the Internet with consequences for the physical world. Many in the medical and political communities credit misinformation for seeding the present distrust in COVID-19 vaccines and U.S. elections, (3) and that distrust has contributed to vaccine hesitancy, the COVID-19 death count, the erosion of faith in democratic government, and the false justification of political violence. (4)

Given misinformation's ill effects, it is not surprising that Americans generally agree that misinformation should be curtailed in some manner or another. (5) Indeed, 88% of Americans believe that it has caused "some" or "a great deal" of confusion regarding "basic facts." (6) However, finding a solution has proven challenging.

So far, the debate over how to combat misinformation has stagnated around reforming controversial Section 230, (7) a provision of the Communications Decency Act that, among other things, limits the liability websites face for user-posted content on their platforms. (8) Section 230 reform efforts generally aim to alter websites' legal incentives to motivate action, (9) and although there have been many proposals, (10) thus far, none have evidently offered a solution for misinformation that has proven sufficiently politically popular, constitutionally viable, and regulatorily effective to become law. (11) For one, the politics of misinformation have become entwined with the divisive politics of how to respond to COVID-19 and claims of election fraud, (12) and secondly, the First Amendment bars a broad range of speech regulation with few exceptions. (13)

In contrast, a simultaneous antitrust reform movement is poised to alter the market incentives that websites and social media firms face when deciding how to handle misinformation on their platforms. The movement has already claimed misinformation as just another symptom of a larger monopoly problem that permits powerful firms to prioritize their own interests over consumer preferences (14)--specifically consumers' preference for trustworthy, accurate news (15)--and the support for antitrust change is growing. (16) Since the early 2000s, tech giants like Meta, which owns Facebook; (17) Google, which owns YouTube; (18) and Amazon have amassed considerable influence, both economic and otherwise, (19) leaving many to ask whether U.S. antitrust laws need to catch up with the twenty-first century. (20)

One major area of antitrust law currently under scrutiny is Section 7 of the Clayton Antitrust Act and its case law, (21) which together provide the standards that agencies and courts use to decide whether a particular merger poses too great of a threat to consumers to permit its consummation. (22) Generally, this analysis involves weighing the post-merger level of market concentration, (23) often quantified into a Herfindahl--Hirschman Index ("HHI") value, (24) against any redeeming, procompetitive qualities of the merger to predict its probable effect on competition and therefore consumers. (25) In recent years, this approach's application has been criticized as overly deferential towards merging parties. (26)

Combined and compared side-by-side, the parallel reform movements behind Section 230 and Section 7 convene at the following conclusion: the unfettered spread of misinformation continues to pose a serious, present threat to public health and debate, but the remedy of Section 230 reform alone risks being too politically unpopular, too constitutionally vulnerable, or too regulatorily ineffective to await. Therefore, until these conditions change, Congress should prioritize antitrust reform and amend Section 7 by joint resolution to incorporate a bright-line HHI ceiling for the social media market to hinder market concentration, increase competition, and ultimately empower consumers to demand greater content scrutiny from their social media platforms.

To support this proposal, this Note first compares Section 230 and Section 7 in their respective regulatory, political, and constitutional contexts. Then, this Note argues that establishing an HHI ceiling for Section 7 merger review is likely to both minimize misinformation's ill effects and provide a more reliable tool than Section 230 reform for combatting misinformation, at least until the political and constitutional context surrounding Section 230 shifts.

The background is divided into four parts. Section II.A explains how Section 230 protects social media firms from legal liability for misinformation and how the divisive politics of misinformation render changing Section 230 politically difficult. Section II.B discusses how Section 7 aligns social media firms' market incentives with consumers' preferences against misinformation and how antitrust politics are united towards increasing the regulation of social media firms. Section II.C highlights the stark disparity in constitutional scrutiny that reform options would endure to amend Section 230 under the demanding First Amendment and Section 7 under the permissive commerce clause. Section II.D briefly covers the typical business model of social media firms and how the social media market's economics renders it vulnerable to monopolization and suitable for antitrust regulation.

The analysis that follows is bifurcated and concludes by addressing rebuttals. Section III.A argues (1) that anti-misinformation Section 230 reform is unlikely to muster the political support required in Congress and (2) that even if it were to, Section 230 reform is likely to either be regulatorily counterproductive or constitutionally vulnerable. Section III.B then argues that Section 7 reform is not only constitutionally safe and politically popular but also capable of compelling social media firms to mitigate misinformation. At last, Section III.C concludes by addressing likely criticisms of the proposal within the context of a whole-of-government effort to mitigate misinformation wherever and whenever possible, within which the social media market's HHI ceiling exists as a humble but nonetheless valuable tool.

2. BACKGROUND

   1. Section 230 and Misinformation Politics

      1. Section 230's Law

         Section 230 of the Communications Decency Act limits the liability of websites for their user-posted content and was passed in the early years of the Internet when courts differed on whether a website could be liable for such content. (27) Consider the tort of defamation, for example. Common law defamation possesses four elements:

         (a) a false and defamatory statement concerning another, (b) an unprivileged publication to a third party, (c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication. (28) Because "publication" includes "intentionally and unreasonably fail[ing] to remove defamatory matter that [someone] knows to be... in his possession or under his control," (29) whether a website could be held liable for defamatory content posted on its site by a third-party turned on whether the website was a "publisher," (30) and this question divided courts. (31)

         In Cubby, Inc. v. CompuServe Inc., the Southern District of New York held an Internet service provider not liable for a third-party's defamatory post "because it had 'no more editorial control' than would 'a public library, book store, or newsstand' and therefore was a mere distributor that did not know or have reason to know of the content." (32) But in Stratton Oakmont, Inc. v. Prodigy Servs., a New York state court held the owner of a website was "liable as a publisher of defamatory posts" because the owner possessed and "exercised 'editorial control' over offensive content" by electing to moderate such content. (33) Seeking to remedy this potentially perverse incentive for websites to turn a blind eye to their users' posts to avoid legal vulnerability as a publisher, (34) then-Congressmen Ron Wyden and Chris Cox proposed Section 230, framing it as a "'sword and shield' for Internet companies." (35) The sword empowered websites to moderate and censor without fear of liability, declaring that

         [n]o provider or user of an interactive computer service shall be held liable on account of... any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise...