Legislating the Internet - The Good
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One law that is dear to both mine and Goldman’s hearts is H.R. 4328, or as it is more commonly known, the Internet Tax Freedom Act. It’s not as wide-ranging as its name implies, however. For instance, some people think that it means you don’t have to pay sales tax if you purchase something over the Internet. It doesn’t; nor does it keep the IRS out of online transactions of virtual goods. What the law actually did was both more subtle and more economically helpful.
The law prevented states, at least temporarily, from “enacting Internet access taxes or e-commerce specific taxes,” according to Goldman. So the government couldn’t charge an extra tax just for someone purchasing access to the Internet (and if you don’t think that’s a big deal, ask the telecoms). States also couldn’t charge an extra tax just because a transaction took place over the Internet. This meant that the dot-com boom and bust played out naturally, without state governments getting involved -- think how it would have played out if they got fat off the revenues which they’d then lose when the bubble burst. The moratorium on taxes is temporary, but there are proposals in both the House and Senate to make it permanent before it expires in November.
Another favorite of Goldman’s is 47 USC 230. He describes it as part of the Communications Decency Act and says that “the law provides websites and other intermediaries a near-absolute immunization from liability for their users’ content—even if offline publishers would be liable for publishing the exact same user content in dead trees.” While we have a notice-and-takedown regime for copyright law when it comes to the Internet, we don’t have that regime for simple comments made by someone online –- because web hosts aren’t responsible for what their users say online.
Without this law, Company X could contact the web host of the site CompanyXSucks and tell them to take it down because it’s defamatory, and back up that complaint with a threat to sue the web host. It wouldn’t even have to be a whole site; Company X could ask them to take down a single comment. With this law in place, it’s not the web host that’s liable; it’s the person making the comment. The effect of this is wider-ranging than you might think.
What would happen in general if we did not have the law? Since companies would try to get as many negative comments taken down as possible, and web hosts would be eager to help to avoid lawsuits, “This would ruin the capability of the consumer opinion sites (for example, eBay’s feedback forum and Amazon product reviews) to hold people and companies accountable for their choices. Indeed, by undermining the credibility of Internet content generally, a notice-and-takedown scheme could diminish the Internet’s vitality as a mainstream information resource,” according to Goldman.
Next: The Questionable >>
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