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
Oracle CEOs Clay Magouyrk and Mike Sicilia sit down with CNBC’s David Faber on Oct. 13, 2025.
CNBC
It’s been a rollercoaster year for Oracle investors, as they try to assess the strength of the software giant’s position in the artificial intelligence boom.
The stock is up more than 30% for the year even after a 23% plunge in October, which was its worst month since 2001. It’s recovered a bit in November, climbing almost 10% for the month as of Tuesday.
Heading into the company’s fiscal second-quarter earnings report on Wednesday, pressure is building on management — and newly installed CEOs Clay Magouyrk and Mike Sicilia — to show that Oracle can continue to finance the company’s aggressive infrastructure plans while simultaneously convincing Wall Street that the AI-fueled hypergrowth story remains intact.
In recent months, Oracle has emerged as a more central player in AI, largely due to a $300 billion deal with OpenAI, which came to light in September, an agreement that involves the AI startup buying computing power over about five years, starting in 2027.
Funding Oracle’s compute buildout is going to require mounds of debt. In late September, Oracle raised $18 billion in a jumbo bond sale, one of the largest debt issuances on record in the tech industry, and the company is now the biggest issuer of investment grade debt among non-financial firms, according to Citi.
“There is something inherently uncomfortable as a credit investor about the transformation of the sort we’re facing that is going to require an enormous amount of capital,” Daniel Sorid, head of U.S. investment grade credit strategy at Citi, said on a video call to investors on Friday, a replay of which was provided to reporters.
Oracle has secured billions of dollars of construction loans through a consortium of banks tied to data centers in New Mexico and Wisconsin. Citi analyst Tyler Radke estimates Oracle will raise roughly $20 billion to $30 billion in debt every year for the next three years.
As of August, the company’s combined short-term and long-term debt, which includes lease obligations, sat at $111.6 billion, up from $84.5 billion a year earlier, according to FactSet, while cash and equivalents slipped over that stretch to $10.45 billion from $10.6 billion.
As Oracle aims to build out sufficient capacity to meet the rising demand its seeing from customers like OpenAI, the street is questioning whether company will tap sources other than the debt market.
“Oracle will be looking at all options out there — off-balance sheet facilities, raising debt, issuing equity or perhaps exploring interest from a foreign investor, i.e. a sovereign wealth fund,” said Rishi Jaluria, a software analyst at RBC Capital Markets, in an interview. Jaluria recommends holding the stock.
A credit investor who spoke to CNBC highlighted Meta’s $27 billion deal with Blue Owl Capital, a joint venture between the two entities, as one type of financing arrangement being used for AI data center development.
The market is also debating whether Oracle can use vendor financing options to reduce the amount of upfront capital required to stand up data centers, including securing favorable financing terms with suppliers like Nvidia, a credit investor told CNBC. However in that scenario, Nvidia’s chips would be used as collateral, raisings concerns around GPU depreciation.
An Oracle spokesperson declined to comment.
Growing skepticism
The discomfort that Sorid referenced has driven Oracle’s 5-year credit default swaps to new multi-year highs. Credit default swaps are like insurance for investors, with buyers paying for protection in case the borrower can’t repay its debt. Bond investors told CNBC that they’ve become a popular way to hedge the risk tied to the AI trade.
Credit analysts at Barclays and Morgan Stanley are recommending clients buy Oracle’s 5-year CDS. Andrew Keches, an analyst at Barclays, told analysts in a note last month that he didn’t see an avenue for Oracle’s credit trajectory to improve. And in late November, Morgan Stanley analysts said Oracle’s CDS had attracted not just typical credit investors but “tourists” who have less experience with this type of financial instrument.
Spools of electrical wires outside a series of assembly tents during a media tour of the Stargate AI data center in Abilene, Texas, US, on Tuesday, Sept. 23, 2025. Stargate is a collaboration of OpenAI, Oracle and SoftBank, with promotional support from President Donald Trump, to build data centers and other infrastructure for artificial intelligence throughout the US.
Kyle Grillot | Bloomberg | Getty Images
Oracle’s revenue growth and backlog of business will be closely monitored as investors try to gauge whether the company’s spending plans are justified. Analysts expect to see revenue growth in the latest quarter of 15% to $16.2 billion, according to StreetAccount.
Remaining performance obligations, a measure of contracted revenue that hasn’t yet been recognized, are expected to surpass $500 billion, StreetAccount says, which would mark a more than fivefold increase from a year earlier. Oracle’s disclosure in September that RPOs jumped 359% to $455 billion sent the company’s stock up 36%, its best single-day performance since 1992.
Since then, the stock has wiped out all of those gains and then some.
Gil Luria, an analyst at D.A. Davidson, said that beyond infrastructure, he’ll be closely watching Oracle’s core database business, which is a source of much higher margins. That will help determine how much flexibility the company has in going to the capital markets, he said.
“Oracle can handle the debt load,” said Luria, who recommends holding the stock. “But they need more cash flow to raise more capital from here.”
Technology
Teachers’ union AFT slams crypto market bill, warns of ‘profound risks’ for America’s retirement plans
The American Federation of Teachers, the powerful labor union that represents 1.8 million members, is urging the Senate Banking Committee to reconsider its crypto market structure bill, the Responsible Financial Innovation Act, calling the proposed legislation “as irresponsible as it is reckless” in a letter exclusively obtained by CNBC.
In the letter that AFT president Randi Weingarten sent to Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-Mass.), she wrote the union opposes the bill based on the “profound risks to the pensions of working families and the overall stability of the economy.”
“The legislation on crypto we have seen weighed by the committee over the last few months gives us deep concern,” Weingarten added.
The AFT is concerned that in passing crypto legislation, the government will open the floodgates to widespread fraud and unethical practices across retirement plans including AFT pensions.
“This legislation pretends that crypto assets are stable and mainstream, and they are not. Rather than just being silent on crypto, this bill strips the few safeguards that exist for crypto and erodes many protections for traditional securities. If passed, it will undercut the safety of many assets and cause problems across retirement investments,” Weingarten wrote.
A specific issue the AFT cited with the proposed legislation it allowing non-crypto companies to put their stock on the blockchain and evade existing securities regulatory framework. Wall Street has become interested in the idea of “tokenization” of all financial assets, with Larry Fink, CEO of BlackRock, the largest asset manager in the world, a leader evangelist for the concept.
“This loophole and the erosion of traditional securities law will have disastrous consequences: Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities,” Weingarten wrote.
She argued that the legislation being considered by the committee also does little to curb fraud, illegal activity and corruption that continues to be prevalent in crypto markets. Weingarten called the legislation “irresponsible” and “reckless.”
“We believe that if enacted, this bill has the potential to lay the groundwork for the next financial crisis,” she wrote.
NEW YORK, NEW YORK – AUGUST 28: Randi Weingarten, president of the American Federation of Teachers (AFT), speaks during the March on Wall Street on August 28, 2025 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
The AFL-CIO, the nation’s largest labor union, stated its opposition to the Senate Banking Committee over a draft of the crypto bill in October.
CNBC also confirmed that on Thursday, the CEOs of Bank of America, Citi and Wells Fargo, will be meeting with lawmakers to discuss the crypto market structure proposals.
The currently proposed legislation, which builds on a bill that passed the House of Representatives over the summer, is co-sponsored by key crypto backer Senator Cynthia Lummis (R-Wyoming) and Senator Bernie Moreno (R-Ohio), alongside Chairman Scott. It aims to create structure for regulating digital assets, but also raises questions about tokenized securities that are not specifically cryptocurrencies.
Tokenization has been a key concern as the bill has gained momentum on Capitol Hill, and a hurdle to getting the support from Democrats that will be needed for passage. Previous CNBC reporting indicates that the Senate backers will need to attract votes from at least seven Democrats for the legislation to pass. At last week’s CNBC CFO Council Summit in Washington, D.C., Senator Mark Warner (D-Va.) told attendees, “I’m in crypto hell at this moment trying to get the market structure bill done.”
Warner is among a group of Democratic senators who met on Monday to review the Senate Banking draft and consider counter-offers, according to Politico.
Many Democrats, including Warren, have also been concerned about the balance of crypto regulatory oversight between the CFTC and the Securities and Exchange Commission. States, meanwhile, worry that their laws may be preempted by a new federal law, and the states left powerless to protect residents from fraud, a concern outlined by Massachusetts’ Secretary of State William Galvin in a letter to Senate Banking, writing that the “sweeping provisions that will exclude significant portions of the financial industry from state oversight. This is a recipe for disaster for millions of savers.”
Progress on the Senate’s version of a crypto market structure bill was stalled for weeks due to the longest government shutdown in U.S. history. Speaking on Tuesday morning at The Blockchain Association Policy Summit in Washington, D.C., Senator Lummis provided some insight into when the Senate’s version of a crypto market structure bill could be expected. She said her goal is to share a draft by the end of the week, then let the crypto industry as well as Republicans and Democrats vet it and proceed to markup next week.
Slack CEO Denise Dresser during TechCrunch Disrupt in San Francisco, Oct. 29, 2024.
David Paul Morris | Bloomberg | Getty Images
OpenAI on Tuesday announced that it’s tapped Slack CEO Denise Dresser as its new chief revenue officer.
Dresser will oversee the artificial intelligence startup’s global revenue strategy across both customer success and enterprise, OpenAI said in a release.
After spending more than a decade as an executive at Salesforce, Dresser was named Slack’s chief executive in 2023. Salesforce acquired the messaging company for more than $27 billion in 2020.
“I’ve spent my career helping scale category-defining platforms, and I’m looking forward to bringing that experience to OpenAI as it enters its next phase of enterprise transformation,” Dresser said in a statement.
OpenAI kickstarted the generative AI boom with the launch of its chatbot ChatGPT three years ago, and it’s quickly ballooned into one of the fastest-growing commercial entities on the planet.
The startup said in November that it is on track to reach more than $20 billion in annualized revenue run rate this year, with plans to grow to hundreds of billions in sales by 2030.
But as competition heats up from rivals like Google and Anthropic, OpenAI is facing pressure to deliver. The company has made more $1.4 trillion in infrastructure commitments as it works to scale up its technology, and the immense sum has raised eyebrows and sparked concerns about a potential AI bubble.
More than 800 million people use ChatGPT every week, and OpenAI supports more than 1 million business customers.
Dresser will help more companies integrate AI into their daily operations, OpenAI said.
“We’re on a path to put AI tools into the hands of millions of workers, across every industry,” Fidji Simo, OpenAI’s CEO of Applications said in a statement. “Denise has led that kind of shift before, and her experience will help us make AI useful, reliable, and accessible for businesses everywhere.”
WATCH: Sam Altman hits reset at OpenAI, pausing side bets to defend ChatGPT’s AI lead
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