Did 'Roommates.com' Nix Consumer-Generated Content?

Section 230 of the Communications Decency Act (47 U.S.C. '230) ('CDA') essentially gives Internet service providers immunity from liability for publishing false or defamatory material as long as that material was provided by another party.

The Roommates.com Case

In Fair Housing Council of San Fernando Valley v. Roommates.com LLC, 521 F.3d 1157 (9th Cir. 2008), an en banc panel of the U.S. Court of Appeals for the Ninth Circuit affirmed an earlier ruling that a commercial roommate-matching service may be liable for violations of the Fair Housing Act because of the manner in which the site elicits information from prospective roommates. The Ninth Circuit, in the opinion, clearly enunciated that a site cannot participate in the development of violative material and still claim immunity under '230. The timing of this ruling coincides with an explosion in the use of consumer-generated content ('CGC') by advertisers on marketing Web sites.

This article addresses the application of '230 to CGC used for commercial purposes, and examines the impact Roommates.com likely will have on the development and use of such content.

Briefly, '230 defines an 'information content provider' as anyone who creates or develops, in whole or in part, content on the Internet. Information content providers are liable for content they create. Section 230 provides immunity to 'interactive computer services' so long as the interactive computer service is not responsible, in whole or in part, for creating or developing the allegedly unlawful content. The central issue in '230 cases such as Roommates.com is determining when Web sites cross the line and are properly considered 'information content provider[s].'

Into this dichotomy come Web sites that solicit, rather than create, information content. CGC is any material created and uploaded to the Internet by non-media professionals. For the past five years, CGC has been gaining momentum as a form of global media, and is now one of the most rapidly expanding forms of Internet content. According to a report issued by the Internet Advertising Bureau ('IAB'), CGC sites attracted 69 million U.S. users in 2006 and generated $1 billion in advertising revenue in 2007. The IAB report projects that by 2011 sites featuring CGC will draw over 100 million U.S. individual visitors and produce $4.3 billion in advertising revenue.

With this staggering growth in the popularity of CGC, advertisers have quickly begun building campaigns around CGC and sponsoring promotions involving CGC. Last year, in a high-profile example, Frito-Lay ran a competition in which consumers created 30-second commercials for Doritos brand chips to air during the 2007 Super Bowl. The winning ad from thousands of submissions was a fan favorite; according to IAG research, the CGC advertisement was the best-liked advertisement of the 2007 Super Bowl. Leading brands such as Converse, Alka-Seltzer, the NFL, and Chevrolet have all followed suit with high-profile CGC advertising campaigns of their own.

Risk of Lanham Act Litigation

With this increase in consumer-generated advertising comes the risk of Lanham Act litigation based on infringing content or false claims originating from consumers. This is precisely the case in a dispute between sandwich chains Subway and Quiznos, presently before the U.S. District Court for the District of Connecticut in Doctor's Associates Inc. v. QIP Holders, LLC. Quiznos sponsored a nationwide contest inviting consumers to submit video clips comparing a Subway sandwich with a Quiznos sandwich. Contestants were encouraged to '[g]rab a camera and show us why you think Quiznos is better.' Quiznos created a Web site on which entries were to be uploaded, and created and posted three sample videos on the Web site. Subway sued Quiznos, alleging that the CGC created under the contest portrayed its sandwiches in a false and misleading manner in violation of the Lanham Act.

Quiznos moved to dismiss pursuant to Rule 12(b)(6), arguing that it was not an 'information content provider' under '230. Quiznos argued that the contestants created the videos themselves and that Quiznos played no part in either creating or developing any video content. The rules of the contest 'expressly prohibited ' any false or misleading statement ' regarding Quiznos or Subway, or of either companies' products or services,' and Quiznos argued that all submissions were screened to ensure compliance with the official rules. Subway countered that, through its encouragement and sample videos, Quiznos was responsible for the content of the consumer videos. Subway argued that responsibility for content may be assigned even in the absence of actual creation or development of the information.

The court last year denied Quiznos' motion to dismiss, allowing the parties to proceed with discovery on Subway's claim that Quiznos is an 'information content provider' because, inter alia, it encouraged and solicited the submissions of videos in such a manner that it may be considered to have shaped the content of the submissions (see, 2007 WL 1186026 (D. Conn. April 19, 2007).

While the Doctor's Associates court, in denying Quiznos' motion, noted that '230 immunity is generally interpreted very broadly, the Ninth Circuit's recent decision in Roommates. com suggests a possible shift in that trend. Roommates.com required users to create a profile by selecting information from drop-down menus, including age, gender, sexual orientation and family status. These profiles were then posted on the site and users of the service could search profiles of potential roommates that matched their preferences. The Fair Housing Councils of San Fernando Valley and San Diego sued, claiming Roommates. com was a housing broker in violation of state and federal housing laws that prohibited solicitation based on protected categories.

Web-Site 'Created' Content

Among other holdings, the court ruled that the Web site 'created' content by creating a questionnaire that users were required to answer with choices provided by the site. It further held that the site lost '230 immunity due to the design of its search functionality. The Ninth Circuit ruled that if a Web site 'materially contributes' to the allegedly illegal content, instead of providing only 'neutral tools' for communicating information, it may be deemed an 'information content provider' that is ineligible for immunity under '230 (see, 521 F.3d at 1167-68).

The court explained that by requiring subscribers to provide information as a condition of using the service and by providing the pre-populated answers regarding protected categories, the Web site operator became a developer, in part, of that information. The court contrasted Roommates. com's search function to that of 'generic search engines,' noting that ordinary search engines do not limit the scope of searches using unlawful criteria designed to achieve illegal ends. As a result, the court concluded that such search engines do not take part in the 'development' of unlawful user searches. Id. at 1168-69.

The mandate from the Ninth Circuit is that even if data is supplied by a third party, a Web site operator that contributes to the content's illegality may be ruled an 'information content provider' and not qualify for immunity under '230. The challenge thus presented to advertisers seeking to use CGC is to determine what activities rise to the level of 'materially contributing' to the consumer content posted on their site. A number of cases considering '230 immunity outside of the CGC arena can provide guidance on this issue.

In Corbis Corp. v. Amazon.com Inc., 351 F. Supp.2d 1090 (W.D. Wash. 2004), the court ruled that Amazon was not liable for the infringing materials posted by vendors on a sales platform hosted by the site, notwithstanding the facts that Amazon: a) provided tools and forms by which the vendors sold their products; and b) provided credit-card processing services for the vendor's transactions. A dating site was ruled not to be an 'information content provider' in Carafano v. Metrosplash.com Inc., 339 F.3d 1119 (9th Cir. 2003), notwithstanding the fact that information posted by users was formulated in response to a questionnaire posted by the site. The Ninth Circuit there ruled that 'so long as a third party willingly provides the essential published content, the interactive service provider receives full immunity regardless of the specific editing or selection process.' Id. at 1124. The Third Circuit, in Green v. America Online, 318 F.3d 465 (3d Cir. 2003), ruled that a Web site can provide communication tools, such as a chat room, and still claim immunity under '230. Likewise, the First Circuit, in Universal Communication Systems Inc. v. Lycos, 478 F.3d 413 (1st Cir. 2007), recently concluded that a Web site was not rendered a developer of a users' misinformation even if the site made it marginally easier to develop and disseminate such misinformation through common online tools.

On the other hand, in MCW Inc. v. Badbusinessbureau.com LLC, 2004 WL 2004 833595 (N.D. Tex. April 19, 2004), the court ruled that the operator of a consumer complaint Web site was not entitled to immunity under '230 because it participated in the content found on the site. In that case, aside from receiving and posting consumer complaints, the defendants themselves created report titles and various headings and used the Web site to sell 'rip-off revenge' packs encouraging consumers to avenge themselves on those companies they believed had cheated them. The court held that: 1) the titles and headings were clearly part of the consumer reports; and 2) the defendants' active encouragement, instruction, and participation in the customer complaints surpassed an editorial role and instead partially created the Web content.

A motion to dismiss predicated upon '230 immunity was also dismissed in Anthony v. Yahoo! Inc., 421 F. Supp.2d 1257 (N.D. Cal. 2006), in which the plaintiff alleged fraud and negligent misrepresentation against the defendant's dating Web sites. With respect to third-party content, on the defendant's motion to dismiss, the court found that where the defendant disseminated real profiles of former subscribers, with expired subscriptions, '230 immunity would not protect the Web site. In this regard, the court ruled that 'because [plaintiff] posits that [defendant's] manner of presenting the profiles, not the underlying profiles themselves, constitute fraud, the CDA does not apply.' Id. at 1263.

Advertiser Considerations

Against this backdrop, advertisers will continue to capitalize on the popularity of CGC by developing advertising using these materials. In view of the most recent judicial interpretations of '230 immunity, an advertiser using CGC would be well advised to consider the following:

• Avoid contests that pit the sponsor's product against that of a competitor;
• Provide tools that are unquestionably neutral, such as technology platforms, competition Web sites, and online editing capability;
• Avoid suggestions as to content;
• Provide general contest parameters outlining the ad campaign's subject matter, judging guidelines, and technical requirements, but avoid specific examples in an attempt to guide the contestants;
• Include prohibitions on false, misleading, defamatory, or fraudulent content; and
• Do not create titles or names for the content submitted.

Conclusion

The use of CGC in advertising is here to stay. As companies increasingly rely on consumer content for their advertising, they must be wary of the risk that they will be held liable for infringing content contained within the materials independently created by consumers. As the Ninth Circuit in Roommates.com has further refined the definition of an 'information content provider,' there soon may not be room for CGC under the roof of '230.

Section 230 of the Communications Decency Act (47 U.S.C. '230) ('CDA') essentially gives Internet service providers immunity from liability for publishing false or defamatory material as long as that material was provided by another party.

The Roommates.com Case

In Fair Housing Council of San Fernando Valley v. Roommates.com LLC , 521 F.3d 1157 (9th Cir. 2008), an en banc panel of the U.S. Court of Appeals for the Ninth Circuit affirmed an earlier ruling that a commercial roommate-matching service may be liable for violations of the Fair Housing Act because of the manner in which the site elicits information from prospective roommates. The Ninth Circuit, in the opinion, clearly enunciated that a site cannot participate in the development of violative material and still claim immunity under '230. The timing of this ruling coincides with an explosion in the use of consumer-generated content ('CGC') by advertisers on marketing Web sites.

This article addresses the application of '230 to CGC used for commercial purposes, and examines the impact Roommates.com likely will have on the development and use of such content.

Briefly, '230 defines an 'information content provider' as anyone who creates or develops, in whole or in part, content on the Internet. Information content providers are liable for content they create. Section 230 provides immunity to 'interactive computer services' so long as the interactive computer service is not responsible, in whole or in part, for creating or developing the allegedly unlawful content. The central issue in '230 cases such as Roommates.com is determining when Web sites cross the line and are properly considered 'information content provider[s].'

Into this dichotomy come Web sites that solicit, rather than create, information content. CGC is any material created and uploaded to the Internet by non-media professionals. For the past five years, CGC has been gaining momentum as a form of global media, and is now one of the most rapidly expanding forms of Internet content. According to a report issued by the Internet Advertising Bureau ('IAB'), CGC sites attracted 69 million U.S. users in 2006 and generated $1 billion in advertising revenue in 2007. The IAB report projects that by 2011 sites featuring CGC will draw over 100 million U.S. individual visitors and produce $4.3 billion in advertising revenue.

With this staggering growth in the popularity of CGC, advertisers have quickly begun building campaigns around CGC and sponsoring promotions involving CGC. Last year, in a high-profile example, Frito-Lay ran a competition in which consumers created 30-second commercials for Doritos brand chips to air during the 2007 Super Bowl. The winning ad from thousands of submissions was a fan favorite; according to IAG research, the CGC advertisement was the best-liked advertisement of the 2007 Super Bowl. Leading brands such as Converse, Alka-Seltzer, the NFL, and Chevrolet have all followed suit with high-profile CGC advertising campaigns of their own.

Risk of Lanham Act Litigation

With this increase in consumer-generated advertising comes the risk of Lanham Act litigation based on infringing content or false claims originating from consumers. This is precisely the case in a dispute between sandwich chains Subway and Quiznos, presently before the U.S. District Court for the District of Connecticut in Doctor's Associates Inc. v. QIP Holders, LLC. Quiznos sponsored a nationwide contest inviting consumers to submit video clips comparing a Subway sandwich with a Quiznos sandwich. Contestants were encouraged to '[g]rab a camera and show us why you think Quiznos is better.' Quiznos created a Web site on which entries were to be uploaded, and created and posted three sample videos on the Web site. Subway sued Quiznos, alleging that the CGC created under the contest portrayed its sandwiches in a false and misleading manner in violation of the Lanham Act.

Quiznos moved to dismiss pursuant to Rule 12(b)(6), arguing that it was not an 'information content provider' under '230. Quiznos argued that the contestants created the videos themselves and that Quiznos played no part in either creating or developing any video content. The rules of the contest 'expressly prohibited ' any false or misleading statement ' regarding Quiznos or Subway, or of either companies' products or services,' and Quiznos argued that all submissions were screened to ensure compliance with the official rules. Subway countered that, through its encouragement and sample videos, Quiznos was responsible for the content of the consumer videos. Subway argued that responsibility for content may be assigned even in the absence of actual creation or development of the information.

The court last year denied Quiznos' motion to dismiss, allowing the parties to proceed with discovery on Subway's claim that Quiznos is an 'information content provider' because, inter alia, it encouraged and solicited the submissions of videos in such a manner that it may be considered to have shaped the content of the submissions (see, 2007 WL 1186026 (D. Conn. April 19, 2007).

While the Doctor's Associates court, in denying Quiznos' motion, noted that '230 immunity is generally interpreted very broadly, the Ninth Circuit's recent decision in Roommates. com suggests a possible shift in that trend. Roommates.com required users to create a profile by selecting information from drop-down menus, including age, gender, sexual orientation and family status. These profiles were then posted on the site and users of the service could search profiles of potential roommates that matched their preferences. The Fair Housing Councils of San Fernando Valley and San Diego sued, claiming Roommates. com was a housing broker in violation of state and federal housing laws that prohibited solicitation based on protected categories.

Web-Site 'Created' Content

Among other holdings, the court ruled that the Web site 'created' content by creating a questionnaire that users were required to answer with choices provided by the site. It further held that the site lost '230 immunity due to the design of its search functionality. The Ninth Circuit ruled that if a Web site 'materially contributes' to the allegedly illegal content, instead of providing only 'neutral tools' for communicating information, it may be deemed an 'information content provider' that is ineligible for immunity under '230 (see, 521 F.3d at 1167-68).

The court explained that by requiring subscribers to provide information as a condition of using the service and by providing the pre-populated answers regarding protected categories, the Web site operator became a developer, in part, of that information. The court contrasted Roommates. com's search function to that of 'generic search engines,' noting that ordinary search engines do not limit the scope of searches using unlawful criteria designed to achieve illegal ends. As a result, the court concluded that such search engines do not take part in the 'development' of unlawful user searches. Id. at 1168-69.

The mandate from the Ninth Circuit is that even if data is supplied by a third party, a Web site operator that contributes to the content's illegality may be ruled an 'information content provider' and not qualify for immunity under '230. The challenge thus presented to advertisers seeking to use CGC is to determine what activities rise to the level of 'materially contributing' to the consumer content posted on their site. A number of cases considering '230 immunity outside of the CGC arena can provide guidance on this issue.

In Corbis Corp. v. Amazon.com Inc. , 351 F. Supp.2d 1090 (W.D. Wash. 2004), the court ruled that Amazon was not liable for the infringing materials posted by vendors on a sales platform hosted by the site, notwithstanding the facts that Amazon: a) provided tools and forms by which the vendors sold their products; and b) provided credit-card processing services for the vendor's transactions. A dating site was ruled not to be an 'information content provider' in Carafano v. Metrosplash.com Inc. , 339 F.3d 1119 (9th Cir. 2003), notwithstanding the fact that information posted by users was formulated in response to a questionnaire posted by the site. The Ninth Circuit there ruled that 'so long as a third party willingly provides the essential published content, the interactive service provider receives full immunity regardless of the specific editing or selection process.' Id. at 1124. The Third Circuit, in Green v. America Online , 318 F.3d 465 (3d Cir. 2003), ruled that a Web site can provide communication tools, such as a chat room, and still claim immunity under '230. Likewise, the First Circuit, in Universal Communication Systems Inc. v. Lycos , 478 F.3d 413 (1st Cir. 2007), recently concluded that a Web site was not rendered a developer of a users' misinformation even if the site made it marginally easier to develop and disseminate such misinformation through common online tools.

On the other hand, in MCW Inc. v. Badbusinessbureau.com LLC, 2004 WL 2004 833595 (N.D. Tex. April 19, 2004), the court ruled that the operator of a consumer complaint Web site was not entitled to immunity under '230 because it participated in the content found on the site. In that case, aside from receiving and posting consumer complaints, the defendants themselves created report titles and various headings and used the Web site to sell 'rip-off revenge' packs encouraging consumers to avenge themselves on those companies they believed had cheated them. The court held that: 1) the titles and headings were clearly part of the consumer reports; and 2) the defendants' active encouragement, instruction, and participation in the customer complaints surpassed an editorial role and instead partially created the Web content.

A motion to dismiss predicated upon '230 immunity was also dismissed in Anthony v. Yahoo! Inc. , 421 F. Supp.2d 1257 (N.D. Cal. 2006), in which the plaintiff alleged fraud and negligent misrepresentation against the defendant's dating Web sites. With respect to third-party content, on the defendant's motion to dismiss, the court found that where the defendant disseminated real profiles of former subscribers, with expired subscriptions, '230 immunity would not protect the Web site. In this regard, the court ruled that 'because [plaintiff] posits that [defendant's] manner of presenting the profiles, not the underlying profiles themselves, constitute fraud, the CDA does not apply.' Id. at 1263.

Advertiser Considerations

Against this backdrop, advertisers will continue to capitalize on the popularity of CGC by developing advertising using these materials. In view of the most recent judicial interpretations of '230 immunity, an advertiser using CGC would be well advised to consider the following:

• Avoid contests that pit the sponsor's product against that of a competitor;
• Provide tools that are unquestionably neutral, such as technology platforms, competition Web sites, and online editing capability;
• Avoid suggestions as to content;
• Provide general contest parameters outlining the ad campaign's subject matter, judging guidelines, and technical requirements, but avoid specific examples in an attempt to guide the contestants;
• Include prohibitions on false, misleading, defamatory, or fraudulent content; and
• Do not create titles or names for the content submitted.

Conclusion

The use of CGC in advertising is here to stay. As companies increasingly rely on consumer content for their advertising, they must be wary of the risk that they will be held liable for infringing content contained within the materials independently created by consumers. As the Ninth Circuit in Roommates.com has further refined the definition of an 'information content provider,' there soon may not be room for CGC under the roof of '230.