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Thinking about the legal implications of user-generated content

Forward-thinking retailers and brands are creating hospitable, engaging venues for their customers to initiate or contribute to online conversations. Those that do this effectively are positioned to reap substantial rewards: what we at Viewpoints call The Triple Bottom Line of Social Commerce.SM

The widespread publication of user-generated content, or UGC, is a relatively recent phenomenon, and the relevant legal standards are still emerging. In-house attorneys have understandable concerns about letting users communicate to the world under the company banner. The fear is that launching a website for user contributions will result in the company getting sued.

As General Counsel of Viewpoints Network, as well as the Director of Business Development for the Viewpoints Technology Platform, I can offer a perspective on how one might think about the legal ramifications of user-generated content in the context of the business imperatives favoring social commerce. (Note: this post is not intended as legal advice. Standard disclaimer here.)

Other People’s Postings

The good news is that Section 230 of the federal Communications Decency Act of 1996 establishes a key principle of Internet law: online information services (defined broadly) are not to be held responsible for the speech of their users. In legalese:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Most often, claims based on UGC involve defamation, and courts have consistently dispatched lawsuits seeking to attribute online speech to the host of the website. (See for yourself.) The CDA protections have been held to apply even where websites exercise “a publisher’s traditional editorial functions” – e.g., moderating content for accuracy or civility – provided that the moderation does not alter the meaning of the content.

Legal opinions to date, and the breadth of Section 230’s plain language, provide good reason to anticipate that the CDA will remain a formidable obstacle to any type of claim seeking to attribute the speech of the user to the host of the online community. Beyond defamation, such claims could conceivably include, for example, those alleging personal injuries based on product modifications or uses that were suggested in an online forum.

UGC as the Canary in the Coal Mine

The second pillar of Viewpoints’ Triple Bottom Line of Social Commerce is insights: the ability of an engaged community to surface a wealth of valuable information that might otherwise remain unknown to the brand.

Our experience at Viewpoints is that discussion posts, member comments and other forms of UGC provide companies with a range of actionable insight: that includes “bad news” along with the good. And you should thank them for it! These are opportunities to fix problems with your products and services, to do so in a public venue, and in so doing, to earn enduring customer loyalty (the third prong of the Triple Bottom Line).

One also can see the risk-management benefits of opening ones eyes to product and service issues. Wouldn’t a bicycle brand want to learn from its community about a defect in the design of its wheels? Shouldn’t a car manufacturer be interested to learn at the earliest possible moment about a problem with a car’s vital systems (hello, Toyota)? The sooner a company learns what is going on, the sooner it can act to correct product problems that might otherwise become sources of significant harm and legal liability.

Balancing Act

Identifying, quantifying and explaining the risks related to business activities are clearly proper roles for company counsel. As all lawyers have reminded their clients at one time or another, anyone can be sued for anything. The courthouse door, for better or worse, is always open. The question is, how frequent are the feared lawsuits in reality, and what are their chances of success?

Fortunately, in the case of user-generated content, the broad protections of the CDA make the overall likelihood of success apparently quite low. It is difficult – for this writer, in any event – to imagine circumstances in which legal considerations would warrant a decision not to proceed with an online community for which there is otherwise a compelling business case.

Every company's situation is different and requires careful consideration of the facts. The best business lawyers help their clients analyze the balance between legal risks and business opportunities. Ultimately, however, these decisions are for the the business manager to make – recognizing that excessive risk aversion is itself a business risk.