Companies in the online marketplace have been paying close attention to Section 230 of the U.S. Communications Decency Act of 1996 (CDA) in recent weeks and months. As noted in our previous client alert, CDA Section 230 “is a powerful law that provides websites, blogs, and social networks that host third-party speech with liability protection against a range of laws that might otherwise hold them legally responsible for what their users say and do.”
On July 1, the new U.S.-Mexico-Canada (USMCA) trade agreement went into effect. The USMCA for the first time in any trade agreement requires U.S. trading partners to adopt provisions modeled on Section 230. This furthers the policy of the U.S. as articulated in the CDA “to promote the continued development of the Internet and other interactive computer services and other interactive media” with the purpose to “preserve the vibrant and competitive free market” for “Internet and other interactive computer services.” Congress articulated its policy broadly to “maximize user control” and facilitate “political diversity”, “cultural development” and “intellectual activity” and “maximize user control.” The online liability provisions of USMCA are aligned with CDA Section 230. The purpose of these provisions is to ensure that interactive computer service providers are not held liable for third party content published on their platforms. An interactive computer service provider is defined in the USMCA as a “system or service that provides or enables electronic access by multiple users to a computer server.” Article 19.17 of USMCA Chapter 19 (Digital Trade) states:
… no Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.
The Advisory Committee on Trade Policy and Negotiations (ACTPN), which is required by U.S. statute to review all proposed FTAs, considered both the USMCA’s digital trade chapter (Chapter 19) containing this provision and its intellectual property chapter (Chapter 20). It noted that it “is pleased with these high-standard chapters and recommend they serve as models for future trade agreements.”
ACTPN effectively recognized the value of adding both liability protection for interactive computer services for user-posted content in Chapter 19 as well as the expanded intellectual property provisions of Chapter 20. Article 19.17 makes clear that liability protections are not applicable to expanded protection of intellectual property, a long-standing negotiating priority of the U.S.
Annex 19-A provides that Article 19.17 shall not apply to Mexico until three years after USMCA enters into force. An equivalent to section 230 does not exist in Canadian law, although the obligations are applicable to Canada and will require future clarity by Canadian law and practice.
With President Trump’s recent Executive Order on Preventing Online Censorship, which seeks to curb some of the statutory provisions enumerated in Section 230, the steps the U.S. will take to ensure that Canada and Mexico meet their new obligations remain unclear. What is known, however, is that with the USMCA’s entry into force, the principles of Section 230 are now included in U.S. trade obligations as effectively affirmed by the U.S. Congress when considering USMCA and its implementing legislation. As in all trade agreements, national sovereignty is protected, including the ability of Congress to make legislative adjustments to underlying statues in the future.
Companies will find that the USMCA provides many new benefits as well as processes to enhance the flow of goods, services and, for the first time, digital trade across North America. USMCA reflects a growing recognition across North America of the purposes and value of the approach that the U.S. Congress initiated through the 1996 Communications Decency Act. To review other significant provisions in the USMCA see the webinar by our colleagues on the future impact of the agreement.