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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

Why the Supreme Court's Section 230 case could reshape the internet

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U.S. lifts chip software curbs on China amid trade truce, Synopsys says

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U.S. lifts chip software curbs on China amid trade truce, Synopsys says

Synopsys logo is seen displayed on a smartphone with the flag of China in the background.

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The U.S. government has rescinded its export restrictions on chip design software to China, U.S.-based Synopsys announced Thursday. 

“Synopsys is working to restore access to the recently restricted products in China,” it said in a statement

The U.S. had reportedly told several chip design software companies, including Synopsys, in May that they were required to obtain licenses before exporting goods, such as software and chemicals for semiconductors, to China. 

The U.S. Commerce Department did not immediately respond to a request for comment from CNBC.

The news comes after China signaled last week that they are making progress on a trade truce with the U.S. and confirmed conditional agreements to resume some exchanges of rare earths and advanced technology.

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Datadog stock jumps 10% on tech company’s inclusion in S&P 500 index

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Datadog stock jumps 10% on tech company’s inclusion in S&P 500 index

The Datadog stand is being displayed on day one of the AWS Summit Seoul 2024 at the COEX Convention and Exhibition Center in Seoul, South Korea, on May 16, 2024.

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Datadog shares were up 10% in extended trading on Wednesday after S&P Global said the monitoring software provider will replace Juniper Networks in the S&P 500 U.S. stock index.

S&P Global is making the change effective before the beginning of trading on July 9, according to a statement.

Computer server maker Hewlett Packard Enterprise, also a constituent of the index, said earlier on Wednesday that it had completed its acquisition of Juniper, which makes data center networking hardware. HPE disclosed in a filing that it paid $13.4 billion to Juniper shareholders.

Over the weekend, the two companies reached a settlement with the U.S. Justice Department, which had sued in opposition to the deal. As part of the settlement, HPE agreed to divest its global Instant On campus and branch business.

While tech already makes up an outsized portion of the S&P 500, the index has has been continuously lifting its exposure as the industry expands into more areas of society.

DoorDash was the latest tech company to join during the last rebalancing in March. Cloud software vendor Workday was added in December, and that was preceded earlier in 2024 with the additions of Palantir, Dell, CrowdStrike, GoDaddy and Super Micro Computer.

Stocks often rally when they’re added to a major index, as fund managers need to rebalance their portfolios to reflect the changes.

New York-based Datadog went public in 2019. The company generated $24.6 million in net income on $761.6 million in revenue in the first quarter of 2025, according to a statement. Competitors include Cisco, which bought Splunk last year, as well as Elastic and cloud infrastructure providers such as Amazon and Microsoft.

Datadog has underperformed the broader tech sector so far this year. The stock was down 5.5% as of Wednesday’s close, while the Nasdaq was up 5.6%. Still, with a market cap of $46.6 billion, Datadog’s valuation is significantly higher than the median for that index.

— CNBC’s Ari Levy contributed to this report.

CNBC: Datadog CEO Olivier Pomel on the cloud computing outlook

Datadog CEO Olivier Pomel on the cloud computing outlook

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Ether and related stocks gain amid the latest crypto craze: Tokenization

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Ether and related stocks gain amid the latest crypto craze: Tokenization

A representation of cryptocurrency Ethereum is placed on a PC motherboard in this illustration taken on June 16, 2023.

Dado Ruvic | Reuters

Stocks tied to the price of ether, better known as ETH, were higher on Wednesday, reflecting renewed enthusiasm for the crypto asset amid a surge of interest in stablecoins and tokenization.

BitMine Immersion Technologies, a bitcoin miner that announced plans this week to make ETH its primary treasury reserve asset, jumped about 20%. It’s gained more than 1,000% since the announcement. Betting platform SharpLink Gaming, which has also initiated an ETH treasury strategy, added more than 11%. Bit Digital, which last week exited bitcoin mining to focus on its ETH treasury and staking plans, jumped more than 6%.

“We’re finally at the point where real use cases are emerging, and stablecoins have been the first version of that at scale but they’re going to open the door to a much bigger story around tokenizing other assets and using digital assets in new ways,” Devin Ryan, head of financial technology research at Citizens.

On Tuesday, as bitcoin ETFs snapped a 15-day streak of inflows, ether ETFs saw $40 million in inflows led by BlackRock’s iShares Ethereum Trust. ETH ETFs came back to life in June after much concern that they were becoming zombie funds.

The price of the coin itself was last higher by 5%, according to Coin Metrics, though it’s still down 24% this year.

Ethereum has been struggling with an identity crisis fueled by uncertainty about the network’s value proposition, weaker revenue since its last big technical upgrade and increasing competition from Solana. Market volatility, driven by geopolitical uncertainty this year, has not helped.

The Ethereum network’s smart contracts capability makes it a prominent platform for the tokenization of traditional assets, which includes U.S. dollar-pegged stablecoins. Fundstrat’s Tom Lee this week called Ethereum “the backbone and architecture” of stablecoins. Both Tether (USDT) and Circle‘s USD Coin (USDC) are issued on the network.

Fundstrat's Tom Lee on being named chairman of BitMine Immersion Technologies

BlackRock’s tokenized money market fund (known as BUIDL, which stands for USD Institutional Digital Liquidity Fund) also launched on Ethereum last year before expanding to other blockchain networks.

Tokenization is the process of issuing digital representations on a blockchain network of publicly traded securities, real world assets or any other form of value. Holders of tokenized assets don’t have outright ownership of the assets themselves.

The latest wave of interest in ETH-related assets follows an announcement by Robinhood this week that it will enable trading of tokenized U.S. stocks and ETFs across Europe, after a groundswell of interest in stablecoins throughout June following Circle’s IPO and the Senate passage of its proposed stablecoin bill, the GENIUS Act.

Ether, which turns 10 years old at the end of July, is sitting about 75% off its all-time high.

Don’t miss these cryptocurrency insights from CNBC Pro:

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