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People wait in line outside the US Supreme Court in Washington, DC, on February 21, 2023 to hear oral arguments in two cases that test Section 230, the law that provides tech companies a legal shield over what their users post online.

Jim Watson | AFP | Getty Images

Supreme Court Justices voiced hesitation on Tuesday about upending a key legal shield that protects tech companies from liability for their users’ posts, and for how the companies moderate messages on their sites.

Justices across the ideological spectrum expressed concern with breaking the delicate balance set by Section 230 of the Communications Decency Act as they rule on the pivotal case, Gonzalez v. Google, even as some suggested a narrower reading of the liability shield could sometimes make sense.

The current case was brought by the family of an American killed in a 2015 terrorist attack in Paris. The petitioners argue that Google, through its subsidiary YouTube, violated the Anti-Terrorism Act by aiding and abetting ISIS, as it promoted the group’s videos through its recommendation algorithm. Lower courts sided with Google, saying Section 230 protects the company from being held liable for third-party content posted on its service.

The petitioners contend that YouTube’s recommendations actually constitute the company’s own speech, which would fall outside the bounds of the liability shield.

But the justices struggled to understand where the petitioner’s counsel, Eric Schnapper, was drawing the line on what counts as content created by YouTube itself.

Conservative Justice Samuel Alito at one point said he was “completely confused” by the distinction Schnapper tried to draw between YouTube’s own speech and that of a third party.

Schnapper repeatedly pointed to the thumbnail image YouTube shows users to display what video is coming up next, or is suggested based on their views. He said that thumbnail was a joint creation between YouTube and the third party that posted the video, in this case ISIS, because YouTube contributes the URL.

But several justices questioned whether that argument would apply to any attempt to organize information from the internet, including a search engine results page. They expressed concern that such a broad interpretation could have far-reaching effects the high court may not be prepared to predict.

Conservative Justice Brett Kavanaugh noted that courts have applied Section 230 consistently since its inception in the 1990s and pointed to the amici briefs that warned overhauling that interpretation would cause massive economic consequences for many businesses, as well as their workers, consumers and investors. Kavanaugh said those are “serious concerns” Congress could consider if it sought to rework the statute. But the Supreme Court, he said, is “not equipped to account for that.”

“You’re asking us right now to make a very precise predictive judgment that ‘Don’t worry, that it’s really not going to be that bad,'” Kavanaugh told U.S. Deputy Solicitor General Malcolm Stewart, who was arguing the high court should send the case back to the lower court for further consideration. “I don’t know that that’s at all the case. And I don’t know how we can assess that in any meaningful way.”

When Stewart suggested that Congress could amend 230 to account for changes in the reality of the internet today, Chief Justice John Roberts pushed back, noting “the amici suggests that if we wait for Congress to make that choice, the internet will be sunk.”

Even conservative Justice Clarence Thomas, who has openly written that the court should take up a case around Section 230, seemed skeptical of the petitioners’ line in the sand. Thomas noted that YouTube uses the same algorithm to recommend ISIS videos to users interested in that kind of content, as it uses to promote cooking videos to those interested in that subject. Plus, he said, he sees those as suggestions, not affirmative recommendations.

“I don’t understand how a neutral suggestion about something that you’ve expressed an interest in is aiding and abetting,” Thomas said.

The justices had tough questions for Google too, wondering if the liability protections are quite as broad as the tech industry would like to believe. Liberal Justice Ketanji Brown Jackson, for example, had a long back and forth with Lisa Blatt, counsel arguing on behalf of Google, about whether YouTube would be protected by Section 230 in the hypothetical scenario in which the company promotes an ISIS video on its homepage in a box marked “featured.”

Blatt said publishing a homepage is inherent to operating a website so should be covered by Section 230, and that organization is a core function of platforms, so if topic headings can’t be covered, the statute basically becomes a “dead letter.”

Liberal Justice Elena Kagan suggested it’s not necessary to agree completely with Google’s assessment of the fallout from altering 230 to fear the potential consequences.

“I don’t have to accept all of Ms. Blatt’s ‘the sky is falling’ stuff to accept something about, ‘Boy, there’s a lot of uncertainty about going the way you would have us go,’ in part just because of the difficulty of drawing lines in this area,” Kagan told Schnapper, adding the job may be better suited for Congress.

“We’re a court, we really don’t know about these things,” Kagan said. “These are not like the nine greatest experts on the internet.”

Section 230 proponents are optimistic

Several experts rooting for Google’s success in this case said they were more optimistic after the arguments than before at a press conference convened by Chamber of Progress, a center-left industry group that Google and other major tech platforms support.

Cathy Gellis is an independent attorney in the San Francisco Bay Area who filed an amicus brief on behalf of a person running a Mastodon server, as well as a Google-funded startup advocacy group and a digital think tank. She told CNBC that briefs like hers and others seemed to have a big impact on the court.

“It would appear that if nothing else, amicus counsel, not just myself, but my other colleagues, may have saved the day because it was evident that the justices took a lot of those lessons on board,” Gellis said.

“And it appeared overall that there was not a huge appetite to upend the internet, especially on a case that I believe for them looked rather weak from a plaintiff’s point of view.”

Still, Eric Goldman, a professor at Santa Clara University School of Law, said while he felt more optimistic on the outcome of the Gonzalez case, he remains concerned for the future of Section 230.

“I remain petrified that the opinion is going to put all of us in an unexpected circumstance,” Goldman said.

On Wednesday, the justices will hear a similar case with a different legal question.

In Twitter v. Taamneh, the justices will similarly consider whether Twitter can be held liable for aiding and abetting under the Anti-Terrorism Act. But in this case, the focus is on whether Twitter’s decision to regularly remove terrorist posts means it had knowledge of such messages on its platform and should have taken more aggressive action against them.

Conservative Justice Amy Coney Barrett asked Schnapper how the decision in that case could impact the one in the Google matter. Schnapper said if the court ruled against Taamneh, the Gonzalez counsel should be given the chance to amend their arguments in a way that fits the standard set in the other case.

WATCH: Should social media companies be held liable for user content? The consequences of changing section 230

Should social media companies be held liable for user content? The consequences of changing section 230

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AI could affect 40% of jobs and widen inequality between nations, UN warns

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AI could affect 40% of jobs and widen inequality between nations, UN warns

Artificial intelligence robot looking at futuristic digital data display.

Yuichiro Chino | Moment | Getty Images

Artificial intelligence is projected to reach $4.8 trillion in market value by 2033, but the technology’s benefits remain highly concentrated, according to the U.N. Trade and Development agency.

In a report released on Thursday, UNCTAD said the AI market cap would roughly equate to the size of Germany’s economy, with the technology offering productivity gains and driving digital transformation. 

However, the agency also raised concerns about automation and job displacement, warning that AI could affect 40% of jobs worldwide. On top of that, AI is not inherently inclusive, meaning the economic gains from the tech remain “highly concentrated,” the report added. 

“The benefits of AI-driven automation often favour capital over labour, which could widen inequality and reduce the competitive advantage of low-cost labour in developing economies,” it said. 

The potential for AI to cause unemployment and inequality is a long-standing concern, with the IMF making similar warnings over a year ago. In January, The World Economic Forum released findings that as many as 41% of employers were planning on downsizing their staff in areas where AI could replicate them.  

However, the UNCTAD report also highlights inequalities between nations, with U.N. data showing that 40% of global corporate research and development spending in AI is concentrated among just 100 firms, mainly those in the U.S. and China. 

Furthermore, it notes that leading tech giants, such as Apple, Nvidia and Microsoft — companies that stand to benefit from the AI boom — have a market value that rivals the gross domestic product of the entire African continent. 

This AI dominance at national and corporate levels threatens to widen those technological divides, leaving many nations at risk of lagging behind, UNCTAD said. It noted that 118 countries — mostly in the Global South — are absent from major AI governance discussions. 

UN recommendations 

But AI is not just about job replacement, the report said, noting that it can also “create new industries and and empower workers” — provided there is adequate investment in reskilling and upskilling.

But in order for developing nations not to fall behind, they must “have a seat at the table” when it comes to AI regulation and ethical frameworks, it said.

In its report, UNCTAD makes a number of recommendations to the international community for driving inclusive growth. They include an AI public disclosure mechanism, shared AI infrastructure, the use of open-source AI models and initiatives to share AI knowledge and resources. 

Open-source generally refers to software in which the source code is made freely available on the web for possible modification and redistribution.

“AI can be a catalyst for progress, innovation, and shared prosperity – but only if countries actively shape its trajectory,” the report concludes. 

“Strategic investments, inclusive governance, and international cooperation are key to ensuring that AI benefits all, rather than reinforcing existing divides.”

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Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner

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Nvidia positioned to weather Trump tariffs, chip demand 'off the charts,' says Altimeter's Gerstner

Altimeter CEO Brad Gerstner is buying Nvidia

Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.

“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.

President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.

The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.

Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.

Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”

He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.

“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”

WATCH: Brad Gerstner is buying Nvidia

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YouTube announces Shorts editing features amid potential TikTok ban

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YouTube announces Shorts editing features amid potential TikTok ban

Jaque Silva | Nurphoto | Getty Images

YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok. 

The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.

Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.

The creator tools will become available later this spring, said YouTube, which is owned by Google

Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement. 

Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.

“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”

WATCH: TikTok is a digital Trojan horse, says Hayman Capital’s Kyle Bass

TikTok is a digital Trojan horse, says Hayman Capital's Kyle Bass

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