Google Case Heads to Supreme Court With Powerful Internet Shield Law at Stake
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Google Case Heads to Supreme Court With Powerful Internet Shield Law at Stake

Company’s defence against liability in 2015 Paris terrorist attack invokes ‘Magna Carta of the internet’

By JOHN D. MCKINNON
Tue, Feb 21, 2023 8:33amGrey Clock 4 min

WASHINGTON—Google goes before the U.S. Supreme Court this week to defend what is widely regarded as a pillar of the online economy—and one that is also being blamed for a proliferation of harmful content.

The law at issue, known as Section 230, gives internet platforms legal immunity for almost all third-party content hosted on their sites. A decision to limit that immunity could scramble the business models of the internet’s biggest companies—especially social media platforms such as Instagram, TikTok and Google’s YouTube that rely heavily on recommendation algorithms.

“Unless they reaffirm the status quo, they’re going to cause a huge disruption,” said Alan Rozenshtein, a University of Minnesota law professor, at a Brookings Institution panel discussion about the case last week, where he described Section 230 as “the Magna Carta of the internet.”

There is widespread support in Congress for overhauling Section 230, but legislative efforts to do so have stalled amid partisan disagreements over the diagnosis and the cure.

Lawmakers in both parties worry that the immunity law has helped spread promotion of harmful content to vulnerable groups such as children. Democrats also say the immunity has allowed companies to ignore false and dangerous information spreading online, while Republicans say it has enabled liberal-leaning tech companies to block conservative viewpoints.

That has put the Supreme Court in position to potentially rewrite a legal cornerstone of the internet. The case, Gonzalez v. Google, was brought by the family of an American college student, Nohemi Gonzalez, who was among more than 100 people killed during the 2015 Paris terrorist attacks.

The plaintiffs allege that YouTube failed to take down some ISIS terrorist videos and even recommended them to users. They say that makes Google liable for damages under the Anti-Terrorism Act, although they haven’t presented evidence that the terrorists involved saw those videos. In essence, the plaintiffs and their allies argue that Section 230 protection shouldn’t apply to platforms’ algorithmic recommendations of harmful content.

Google, a unit of Alphabet Inc., prevailed in lower courts by arguing that it is protected by Section 230 of the 1996 Communications Decency Act. The law is often known as a shield because it prevents platforms from being sued for hosting harmful user posts, a measure that has been credited with paving the way for internet platforms to prosper economically.

Section 230 also shields platforms from suits for blocking objectionable content. Lawmakers at the time hoped this would encourage internet companies to block harmful content such as sexual images of children, but detractors say tech platforms have used it to censor conservative viewpoints.

Groups supporting the plaintiffs, including some child-safety advocates and conservative free-speech proponents, say the case is a long-overdue chance to right a fundamental legal imbalance that has given the online platforms an unhealthy amount of power and influence.

They say the internet ecosystem has become a breeding ground for a range of social ills, from hate speech to eating disorders, largely because of the 1996 immunity shield for online platforms.

In friend-of-the-court briefs, several allies of the plaintiffs focused on the potential harms done to children online by algorithmic recommendation systems that aim to maximize minors’ engagement.

“We’ve all woken up 20 years later and the internet’s not great,” said Hany Farid, a computer science professor at the University of California, Berkeley, at the recent Brookings panel. “And maybe it’s time to start thinking about how to make the internet a more civilised place.”

But the prospect that Section 230 could be scaled back by the high court has caused a wave of worry in the internet industry.

Companies and others filing friend-of-the-court briefs in support of Google include Meta Platforms Inc., owner of Instagram and Facebook, and NetChoice, a trade group that includes TikTok, which is owned by China’s ByteDance Ltd.

Microsoft Corp. also took Google’s side, saying that platforms “inevitably will have to dramatically cut down on the content they allow on their services—even content they have no reason to believe falls afoul of any law.”

A number of conservative pro-business groups have sided with Google, along with the American Civil Liberties Union and the Progressive Policy Institute.

Limiting Section 230 would stifle the internet’s creative ferment by making platforms wary about recommending personalised content—the technology that has made platforms such as TikTok and Instagram so popular, said Jeff Kosseff, author of “The Twenty Six Words That Created the Internet,” a book about the Section 230 immunity law.

Also filing a brief in support of Section 230 were the sponsors of Section 230, Sen. Ron Wyden (D., Ore.) and former Rep. Christopher Cox (R., Calif.).

A ruling against Google “would subject platforms to liability for all of their decisions to present or not present particular third-party content—the very actions that Congress intended to protect,” the two wrote.

But in a worrisome development for internet companies, the Biden administration argues that expansive readings of the federal immunity law threaten to erode other legal protections.

“An overly broad reading of [the immunity law] would undermine the enforcement of other important federal statutes by both private plaintiffs and federal agencies,” the U.S. Solicitor General wrote in a friend-of-the-court brief.

The Supreme Court decided last fall to hear the case. Many legal scholars believe that Justice Clarence Thomas likely led the push to review the Gonzalez case, since he had previously suggested in court statements and opinions that the federal courts’ current interpretation of Section 230 could be too broad.

The case is scheduled for oral arguments before the court Tuesday, with a decision expected by the end of the high court’s term in late June or early July.

Some scholars believe that the justices could yet stop short of deciding the Gonzalez case. That is because the plaintiffs’ underlying claims under the Anti-Terrorism Act could be rejected by the justices in a similar case, Twitter Inc. v. Taamneh, which is set for arguments Wednesday.

The Twitter case was brought by family members of Nawras Alassaf, who was killed in an ISIS attack at an Istanbul nightclub in 2017. Mr. Alassaf’s relatives allege that Twitter, Google and Meta provided material support to ISIS and are “the vehicle of choice in spreading propaganda.”

Lawyers for Twitter, Google and Facebook have said in court filings that they have made extensive efforts to remove ISIS content and that there is no direct causal link between the websites and the Paris and Istanbul attacks.



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Why Prices of the World’s Most Expensive Handbags Keep Rising

Designers are charging more for their most recognisable bags to maintain the appearance of exclusivity as the industry balloons

By CAROL RYAN
Tue, Mar 5, 2024 3 min

The price of a basic Hermès Birkin handbag has jumped $1,000. This first-world problem for fashionistas is a sign that luxury brands are playing harder to get with their most sought-after products.

Hermès recently raised the cost of a basic Birkin 25-centimeter handbag in its U.S. stores by 10% to $11,400 before sales tax, according to data from luxury handbag forum PurseBop. Rarer Birkins made with exotic skins such as crocodile have jumped more than 20%. The Paris brand says it only increases prices to offset higher manufacturing costs, but this year’s increase is its largest in at least a decade.

The brand may feel under pressure to defend its reputation as the maker of the world’s most expensive handbags. The “Birkin premium”—the price difference between the Hermès bag and its closest competitor , the Chanel Classic Flap in medium—shrank from 70% in 2019 to 2% last year, according to PurseBop founder Monika Arora. Privately owned Chanel has jacked up the price of its most popular handbag by 75% since before the pandemic.

Eye-watering price increases on luxury brands’ benchmark products are a wider trend. Prada ’s Galleria bag will set shoppers back a cool $4,600—85% more than in 2019, according to the Wayback Machine internet archive. Christian Dior ’s Lady Dior bag and the Louis Vuitton Neverfull are both 45% more expensive, PurseBop data show.

With the U.S. consumer-price index up a fifth since 2019, luxury brands do need to offset higher wage and materials costs. But the inflation-beating increases are also a way to manage the challenge presented by their own success: how to maintain an aura of exclusivity at the same time as strong sales.

Luxury brands have grown enormously in recent years, helped by the Covid-19 lockdowns, when consumers had fewer outlets for spending. LVMH ’s fashion and leather goods division alone has almost doubled in size since 2019, with €42.2 billion in sales last year, equivalent to $45.8 billion at current exchange rates. Gucci, Chanel and Hermès all make more than $10 billion in sales a year. One way to avoid overexposure is to sell fewer items at much higher prices.

Many aspirational shoppers can no longer afford the handbags, but luxury brands can’t risk alienating them altogether. This may explain why labels such as Hermès and Prada have launched makeup lines and Gucci’s owner Kering is pushing deeper into eyewear. These cheaper categories can be a kind of consolation prize. They can also be sold in the tens of millions without saturating the market.

“Cosmetics are invisible—unless you catch someone applying lipstick and see the logo, you can’t tell the brand,” says Luca Solca, luxury analyst at Bernstein.

Most of the luxury industry’s growth in 2024 will come from price increases. Sales are expected to rise by 7% this year, according to Bernstein estimates, even as brands only sell 1% to 2% more stuff.

Limiting volume growth this way only works if a brand is so popular that shoppers won’t balk at climbing prices and defect to another label. Some companies may have pushed prices beyond what consumers think they are worth. Sales of Prada’s handbags rose a meagre 1% in its last quarter and the group’s cheaper sister label Miu Miu is growing faster.

Ramping up prices can invite unflattering comparisons. At more than $2,000, Burberry ’s small Lola bag is around 40% more expensive today than it was a few years ago. Luxury shoppers may decide that tried and tested styles such as Louis Vuitton’s Neverfull bag, which is now a little cheaper than the Burberry bag, are a better buy—especially as Louis Vuitton bags hold their value better in the resale market.

Aggressive price increases can also drive shoppers to secondhand websites. If a barely used Prada Galleria bag in excellent condition can be picked up for $1,500 on luxury resale website The Real Real, it is less appealing to pay three times that amount for the bag brand new.

The strategy won’t help everyone, but for the best luxury brands, stretching the price spectrum can keep the risks of growth in check.

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