How an obscure legal doctrine called the Henderson test could weaken Section 230 and change free speech on the internet
The U.S. Supreme Court against a blue sky in Washington, D.C., US. Photographer: Stefani Reynolds/Bloomberg
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A legal test that Google’s lawyer told the Supreme Court was roughly “96% correct” could drastically undermine the liability shield that the company and other tech platforms have relied on for decades, according to several experts who advocate for upholding the law to the highest degree.
The so-called “Henderson test” would significantly weaken the power of Section 230 of the Communications Decency Act, several experts said in conversations and briefings following oral arguments in the case Gonzalez v. Google. Some of those who criticized Google’s concession even work for groups backed by the company.
Section 230 is the statute that protects tech platforms’ ability to host material from users — like social media posts, uploaded video and audio files, and comments — without being held legally liable for their content. It also allows platforms to moderate their services and remove posts they consider objectionable.
The law is central to the question that will be decided by the Supreme Court in the Gonzalez case, which asks whether platforms like Google’s YouTube can be held responsible for algorithmicaly recommending user posts that seem to endorse or promote terrorism.
In arguments on Tuesday, the justices seemed hesitant to issue a ruling that would overhaul Section 230.
But even if they avoid commenting on that law, they could still issue caveats that change the way it’s enforced, or clear a path for changing the law in the future.
What is the Henderson test?
One way the Supreme Court could undercut Section 230 is by endorsing the Henderson test, some advocates believe. Ironically, Google’s own lawyers may have given the court more confidence to endorse this test, if it chooses to do so.
The Henderson test came about from a November ruling by the Fourth Circuit appeals court in Henderson v. The Source for Public Data. The plaintiffs in that case sued a group of companies that collect public information about individuals, like criminal records, voting records and driving information, then put in a database that they sell to third parties. The plaintiffs alleged that the companies violated the Fair Credit Reporting Act by failing to maintain accurate information, and by providing inaccurate information to a potential employer.
A lower court ruled that Section 230 barred the claims, but the appeals court overturned that decision.
The appeals court wrote that for Section 230 protection to apply, “we require that liability attach to the defendant on account of some improper content within their publication.”
In this case, it wasn’t the content itself that was at fault, but how the company chose to present it.
The court also ruled Public Data was responsible for the content because it decided how to present it, even though the information was pulled from other sources. The court said it’s plausible that some of the information Public Data sent to one of the plaintiff’s potential employers was “inaccurate because it omitted or summarized information in a way that made it misleading.” In other words, once Public Data made changes to the information it pulled, it became an information content provider.
Should the Supreme Court endorse the Henderson ruling, it would effectively “moot Section 230,” said Jess Miers, legal advocacy counsel for Chamber of Progress, a center-left industry group that counts Google among its backers. Miers said this is because Section 230’s primary advantage is to help quickly dismiss cases against platforms that center on user posts.
“It’s a really dangerous test because, again, it encourages plaintiffs to then just plead their claims in ways that say, well, we’re not talking about how improper the content is at issue,” Miers said. “We’re talking about the way in which the service put that content together or compiled that content.”
Eric Goldman, a professor at Santa Clara University School of Law, wrote on his blog that Henderson would be a “disastrous ruling if adopted by SCOTUS.”
“It was shocking to me to see Google endorse a Henderson opinion, because it’s a dramatic narrowing of Section 230,” Goldman said at a virtual press conference hosted by Chamber of Progress after the arguments. “And to the extent that the Supreme Court takes that bait and says, ‘Henderson’s good to Google, it’s good to us,’ we will actually see a dramatic narrowing of Section 230 where plaintiffs will find lots of other opportunities to to bring cases that are based on third-party content. They’ll just say that they’re based on something other than the harm that was in the third party content itself.”
Google pointed to the parts of its brief in the Gonzalez case that discuss the Henderson test. In the brief, Google attempts to distinguish the actions of a search engine, social media site, or chat room that displays snippets of third-party information from those of a credit-reporting website, like those at issue in Henderson.
In the case of a chatroom, Google says, although the “operator supplies the organization and layout, the underlying posts are still third-party content,” meaning it would be covered by Section 230.
“By contrast, where a credit-reporting website fails to provide users with its own required statement of consumer rights, Section 230(c)(1) does not bar liability,” Google wrote. “Even if the website also publishes third-party content, the failure to summarize consumer rights and provide that information to customers is the website’s act alone.”
Google also said 230 would not apply to a website that “requires users to convey allegedly illegal preferences,” like those that would violate housing law. That’s because by “‘materially contributing to [the content’s] unlawfulness,’ the website makes that content its own and bears responsibility for it,” Google said, citing the 2008 Fair Housing Council of San Fernando Valley v. Roommates.com case.
Concerns over Google’s concession
Section 230 experts digesting the Supreme Court arguments were perplexed by Google’s lawyer’s decision to give such a full-throated endorsement of Henderson. In trying to make sense of it, several suggested it might have been a strategic decision to try to show the justices that Section 230 is not a boundless free pass for tech platforms.
But in doing so, many also felt Google went too far.
Cathy Gellis, who represented amici in a brief submitted in the case, said at the Chamber of Progress briefing that Google’s lawyer was likely looking to illustrate the line of where Section 230 does and does not apply, but “by endorsing it as broadly, it endorsed probably more than we bargained for, and certainly more than necessarily amici would have signed on for.”
Corbin Barthold, internet policy counsel at Google-backed TechFreedom, said in a separate press conference that the idea Google may have been trying to convey in supporting Henderson wasn’t necessarily bad on its own. He said they seemed to try to make the argument that even if you use a definition of publication like Henderson lays out, organizing information is inherent to what platforms do because “there’s no such thing as just like brute conveyance of information.”
But in making that argument, Barthold said, Google’s lawyer “kind of threw a hostage to fortune.”
“Because if the court then doesn’t buy the argument that Google made that there’s actually no distinction to be had here, it could go off in kind of a bad direction,” he added.
Miers speculated that Google might have seen the Henderson case as a relatively safe one to cite, given than it involves an alleged violation of the Fair Credit Reporting Act, rather than a question of a user’s social media post.
“Perhaps Google’s lawyers were looking for a way to show the court that there are limits to Section 230 immunity,” Miers said. “But I think in in doing so, that invites some pretty problematic reading readings into the Section 230 immunity test, which can have pretty irreparable results for future internet law litigation.”
WATCH: Why the Supreme Court’s Section 230 case could reshape the internet
What if plants could talk to farmers and tell them when they’re in distress? That would not only save the plants, but it could reduce the amount of agricultural waste that threatens the planet’s health.
Much of agriculture may look green, but the industry is one of the world’s biggest carbon offenders. It accounts for at least 10% of global greenhouse gas emissions. Agricultural waste adds to the problem.
Even with the use of pesticides, 40% of most food crops globally are lost to disease and pests. Now companies like SatAgro, Climate FieldView and a California-based startup called InnerPlant are working to reduce agricultural waste. InnerPlant helps crops communicate with their farmers by using genetic engineering.
InnerPlant’s technology uses fluorescents in the plants, so the leaves emit a signal when they are in distress. That signal is detectable from devices that can be attached to satellites, drones or tractors.
“As the plant is reacting to the stresses in your environment, like fungal pressure insects or nitrogen deficiency, it will start to signal and then we can help farmers understand what areas of the field need something and what areas are fine and don’t need additional chemicals,” said Shely Aronov, CEO of InnerPlant.
Farmers then know what to treat and don’t waste money on chemicals, which are up to 30% over-applied.
“We want to eliminate all the unnecessary applications of chemicals into our food system, into our soils and also the additional cost that comes to farmers that they don’t get any benefit from,” added Aronov.
This plant-by-plant technology is highly scalable and could be licensed to major seed companies. InnerPlant would earn royalty revenue, which makes it enticing to investors.
“If you can get this technology into every single corn seed or soybean seed across North America and South America, that is many hundred millions of acres, and you can think about a few dollars per acre from a revenue perspective. That all of a sudden ends up in a lot of revenue for this business,” said Tom Biegala, founding partner of Bison Ventures, an InnerPlant investor.
In addition to Bison Ventures, InnerPlant is backed by John Deere, MS&AD Ventures, UpWest VC and Bee Partners. It has $22.3 million in total funding.
InnerPlant is now working closely with small farmers and some of the nation’s largest agriculture producers. Some have paid to get early access to the technology, which will start with soybeans and then expand to other crops.
John Collison, president and co-founder of Stripe.
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Rising interest rates crushed technology valuations and had a chilling effect on Silicon Valley. Stripe’s co-founder says it was needed.
“Broadly speaking, the effects of higher rates have been quite good,” John Collison, president of the online payments company, told CNBC in an interview at the company’s annual conference Wednesday. “The period where money was free was not a healthy time in Silicon Valley.”
Collison founded Stripe with his brother Patrick in 2010. The company took off, becoming a startup darling and racing to a valuation of $95 billion in 2021, making it one of the world’s most valuable venture-backed businesses, behind Elon Musk’s SpaceX.
Stripe had to take a major haircut along with the rest of the industry as soaring inflation and rising interest rates, starting in 2022, pushed investors out of the riskiest assets, lifted borrowing costs and forced startups to tighten their belts.
Stripe slashed its valuation to $50 billion in a 2023 financing round. Its recent employee tender offer valued the company at closer to $65 billion, The Wall Street Journal reported.
“Valuations are a product of interest rates,” Collison said. Still, he said, “Stripe’s business is the healthiest it’s ever been.” Regarding the drop in valuation, he added, “We’re not losing sleep over it.”
Stripe processed $1 trillion last year, up 25% from 2023, the company said in its annual letter.
While many tech companies took a hit in 2022 and 2023, Collison said the rising interest rate environment succeeded in flushing out the “wackiest” startup ideas, leaving the best ones to get funded.
He pointed to an “overfunding” of marginally good ideas, and “zombie companies” taking too long to go bust.
“That’s not good for dynamic capital allocation in the broader economy,” Collison said. “You want people to be working on the most valuable ideas, and not on the marginal ideas.
Following an extended stretch of rock-bottom borrowing costs, the Federal Reserve started lifting rates in 2022, and hiked its benchmark rate last year to the highest since 2001. Rates have held steady since, and recent statements by Fed Chair Jerome Powell and other policymakers have cemented the notion that cuts aren’t coming in the next several months.
Federal Reserve Bank Chair Jerome Powell speaks during a news conference at the bank’s William McChesney Martin building on March 20, 2024 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images
Collison said there’s more pain coming.
The “point of high rates is that they should hurt, and they haven’t hurt enough yet,” he said. “We should just assume that the hurt takes a bit longer to arrive.”
One part of the tech market that’s powering through the higher rate environment is artificial intelligence, where there “seems to be a new AI funding round every week,” Collison said.
This week, Perplexity announced a $63 million funding round that pushed its valuation above $1 billion. SoftBank and Jeff Bezos are among its backers.
Stripe is benefiting in its own way from the euphoria. OpenAI, Anthropic and Hugging Face are among the AI startups using the company’s payment processing technology.
“I can’t remember a time in Silicon Valley where it has felt like there was as much interest in tech advances taking place,” Collison said of the AI boom. “It’s just a fun time to be in tech, broadly.”
As for Stripe’s future, an eventual IPO has been a source of speculation for years given the company’s lofty valuation and its roster of high-profile backers thirsting for a return on their investment. Collison said Stripe is in “no rush,” and that executives are focused on providing liquidity to employees through secondary share sales.
“We have no timeline that we’re announcing on being a public company,” he said. “The thing that we were quite focused on is making sure that there is good liquidity for employees.”
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