Section 230 Immunity and Generative Artificial Intelligence

Section 230 Immunity and Generative Artificial Intelligence

Legal Sidebari

Section 230 Immunity and Generative
Artificial Intelligence
December 28, 2023
Over the past year, technology companies have expanded access to services capable of creating content
using artificial intelligence (AI). In February 2023, Microsoft announced an “all new, AI-powered Bing
search engine” that “can help you write an email, create a 5-day itinerary for a dream vacation to Hawaii,
with links to book your travel and accommodations, prep for a job interview or create a quiz for trivia
night.” Google introduced Bard, an “experimental conversational AI service,” the same month.
Applications such as these that are capable of generating new content like text, images, and videos form a
subset of AI applications often referred to as “generative AI.”
As access to AI tools has expanded and the underlying models have become more powerful, Congress has
shown interest in regulating AI models. Committees have held hearings, and Members have introduced
bills to regulate AI (or announced a framework for doing so). Some Members have called for a task force
or commission to recommend rules. The executive branch has also weighed in. The White House issued
an Executive Order, in October 2023, tasking agencies with actions to address the advent of AI models.
Generative AI poses unique policy and legal issues. One question raised by the introduction of generative
AI products is the extent to which companies that provide the products could be held liable for illegal
content generated by the AI. The answer likely depends in part on an existing legal framework: Section
230 of the Communications Act of 1934, a federal statute that, subject to some exceptions, immunizes
interactive computer service providers from being sued as the publisher or speaker of information
provided by another party. If this immunity extends to claims based on an output from a generative AI
product, plaintiffs defamed by an AI output (for example) may be barred from suing a company that
provided the AI product. The potential application of Section 230 to generative AI has already garnered
comments at a Supreme Court oral argument and from Section 230’s primary authors. This Sidebar
discusses how Section 230 might apply to legal claims involving generative AI products.
Section 230
Section 230 creates a federal immunity for publishing another person’s content online, as explained in a
longer CRS Report. Specifically, Section 230, enacted in the Communications Decency Act of 1996,
prevents providers and users of “interactive computer services” from being held liable—that is, legally
responsible—as the “publisher or speaker” of information provided by another person. “Interactive
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computer service” is defined as any service that “provides or enables computer access by multiple users to
a computer server.” This broad term encompasses services such as Facebook, Google, and Amazon. There
are exceptions to Section 230 immunity, such as for intellectual property law.
Section 230 only provides immunity for content provided by another person and does not apply if a
provider or user of an interactive computer service helped create or develop the content. Although the
Supreme Court has never interpreted Section 230, many federal and state courts have considered when a
lawsuit would attempt to hold a defendant liable for another’s content or for the defendant’s own content.
A number of courts have settled on a “material contribution” test, under which Section 230 immunity
does not apply if the provider or user materially contributed to the alleged unlawfulness of the content.
This inquiry is highly fact-specific. The U.S. Court of Appeals for the Ninth Circuit, for example, decided
in one case that Section 230 barred housing discrimination claims against the operator of the website
Roommates.com based on one portion of the website but did not bar claims based on a different portion
of the site. The court said an open text field where roommate seekers could describe “what [they] are
looking for in a roommate” did not materially contribute to discrimination, even if users’ descriptions
ended up facilitating discriminatory searches. In contrast, the court held that “search and email systems
[designed] to limit the listings available to subscribers based on sex, sexual orientation and presence of
children” did materially contribute to alleged discrimination. The court suggested sites could provide
“neutral tools” to post user content so long as the tools do not materially contribute to illegal activity.
Citing this “neutral tools” analysis, some federal courts of appeals have held that Section 230 barred
lawsuits against service providers for promoting harmful content through algorithms, where the
algorithms used objective factors that treated the harmful content similarly to other content. Beyond
content recommendation algorithms, courts have held that other choices about how to present material—
and even actions that rearrange or slightly edit material—can also be immunized by Section 230. In
O’Kroley v. Fastcase, Inc., a federal appeals court concluded that Section 230 barred a defamation lawsuit
challenging the way Google presented its search results. The plaintiff alleged that when he searched his
name, one entry on the search results page inaccurately suggested that he had been involved in a case
regarding indecency with a child. The court held that even though Google “performed some automated
editorial acts on” content provided by other parties, “such as removing spaces and altering font,” these
alterations did not materially contribute to the alleged defamatory nature of the content.
In contrast, in FTC v. Accusearch Inc., a federal appeals court held Section 230 immunity did not apply
because the website operator that was sued had helped to develop third-party information. The website
sold information contained in telephone records. Although the website acquired the records from other
parties, it solicited and paid for them. The legal harm came from the publication of the records: the FTC
alleged the website operator violated a federal provision limiting disclosure of certain personal
information. The court said the website operator was responsible for developing the information and thus
not protected by Section 230, as it “contributed mightily to the unlawful conduct” by paying researchers
to acquire confidential records with the intent of making them public contrary to federal law.
Even if Section 230 does not apply, a service provider will only be liable in a lawsuit if a plaintiff can
prove their underlying legal claims. For example, if a copyright lawsuit falls within the Section 230
exception for intellectual property law, the plaintiff will still have to prove the provider in fact violated
copyright law. Other CRS products may be relevant to that inquiry. For example, other products provide
an introduction to tort law and discuss generative AI and copyright law or campaign advertising.
Generative AI
“Artificial intelligence” is a broad term referring to computerized systems that act in ways commonly
thought to imitate human intelligence. Generative AI is a type of AI that uses machine learning to
generate new content, as discussed in this In Focus. For instance, a user can provide a text prompt that the

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generative AI uses to create an image or other content. Machine learning algorithms allow computers to
learn at least partially without explicit instructions. Programmers gather and prepare training data, then
they feed that data into a machine learning model. There are different types of generative AI, but
applications based on large language models, such as OpenAI’s ChatGPT, were trained by providing the
model with massive amounts of existing data scraped from the internet. (This CRS Report discusses some
of the data privacy concerns with generative AI.)
Accordingly, when generative AI creates new content, it draws from this existing information created by
other parties and attempts to match the style and content of the underlying data. However, the new content
may not be identical to the training data. Generative AI may sometimes produce so-called “hallucinated”
outputs that, for instance, go beyond the scope of the training data or have incorrectly decoded that data.
The generative outputs are also influenced by the specific text of the prompt itself—because the
algorithms generate content based on statistical probabilities that the underlying training data are
associated with the words in the prompt, changes to the words in the prompt can change the output. Even
the same prompt provided to a generative AI system multiple times can result in different outputs.
Potential Application of Section 230 to Generative AI
Courts have not yet decided whether or how Section 230 may be used as a defense against claims based
on outputs from recently released generative AI products, but they may soon be asked to address the
issue. Outputs from generative AI products have already led to lawsuits. In June 2023, for example, a
radio host sued OpenAI, alleging that ChatGPT defamed him. In a second defamation case, a plaintiff
alleged that searching for his name on Microsoft’s Bing search engine returned an AI-generated summary
that commingled facts about him with facts about a different individual who had a similar name and who
once pleaded guilty to seditious conspiracy. Although no defendant in these cases has yet raised Section
230 as a defense, the claims are similar to those that have given rise to Section 230 defenses in the past. In
each case, the plaintiff alleges that a defendant published information using a tool that relies at least in
part on user inputs and data created by other parties. At least one commentator has asserted that
generative AI companies might attempt to invoke Section 230 in similar circumstances. Even if raised, the
courts deciding these cases may not address the issue. The cases could settle or be resolved on the merits
or another defense. Still, these or future lawsuits alleging that generative AI outputs are defamatory,
negligent, or cause other legal harms may test whether the providers of the tools or users who requested
those outputs materially contributed to the harmfulness of the challenged content such that Section 230
immunity would not apply.
If Section 230 were to be invoked in such circumstances, past cases suggest Section 230 would be applied
in a fact-specific manner. Thus, a Section 230 inquiry in a lawsuit challenging any given AI-generated
output would likely depend on the particular legal claim and underlying facts. Not all generative AI
products function the same way, and not all legal claims would necessarily turn on the same aspects of a
given product. As one group of scholars asserts, generative AI products “operate on something like a
spectrum between a retrieval search engine (more likely to be covered by Section 230) and a creative
engine (less likely to be covered).” Section 230’s application could therefore vary across different
generative AI products, different applications of a single product, and different legal claims about an
application or product.
As such, commentators have made different predictions about how courts would resolve Section 230
defenses based in part on which aspects of generative AI the arguments focus on. Some commentators
contend that “AI programs’ output is composed by the programs themselves,” so the AI providers should
be viewed as information creators or developers that receive no Section 230 immunity. Large language
models, for example, can “draft[] text on a topic in response to a user request or develop[] text to
summarize the results of a search inquiry.” A commentator has argued that this aspect of the technology
would likely lead courts to conclude that large language models develop text themselves. A large

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language model’s output can “hallucinate,” creating brand new “text on a topic” that no other party has
ever written. If generated content contains claims or assertions that do not appear in its training data, the
claims or assertions could be seen as entirely new information created by the providers rather than by
another person. Even if an AI program assembles facts or claims from training data into new material that
does not appear elsewhere on the internet, this may be viewed as similar to Accusearch, where the website
operator was deemed “responsible for the development of the specific content that was the source of the
alleged liability” and thus was unprotected by Section 230.
On the other hand, another commentator argues that the current iteration of ChatGPT (as of March 2023)
“is entirely driven by third-party input” and “does not invent, create, or develop outputs absent any
prompting from an information content provider.” When it receives a prompt, ChatGPT “uses predictive
algorithms and an array of data made up entirely of publicly available information online to respond to
[the] user-created inputs.” Outside the context of Section 230, OpenAI has claimed that the “content”
associated with any particular ChatGPT interaction includes both the machine-generated outputs and the
user-generated inputs that prompted them. Courts focusing on these aspects of the product could consider
ChatGPT analogous to search engines that use algorithms to generate lists and illustrative snippets of
websites in response to user inputs. As discussed, federal appeals courts have held that Section 230
shields internet search engines from liability for claims based on the results returned by users’ searches.
Autocomplete features are another potential analogy, given that some generative AI operates by predicting
and assembling plausible text outputs that it associates with user prompts and patterns learned from
training datasets. Although there is relatively little case law on point, two federal trial courts have held
that Section 230 immunizes search engines from claims that auto-generated, suggested search terms were
defamatory. The courts reasoned that the “auto-generated terms ‘indicate[] only that other websites and
users have connected plaintiff’s name’ with certain terms,” meaning that the allegedly harmful content
was created by another party. This reasoning could apply to an AI product that completes a sentence by
“predict[ing] probabilities for the next plausible word or phrase given previous words or phrases.”
Similarly, some courts have held, under the neutral tools test, that other algorithmic processes do not
develop content for the purposes of Section 230. For example, the U.S. Court of Appeals for the Second
Circuit held that Facebook does not develop or create content that its algorithms arrange and display on a
user’s page when the algorithms “take the information provided by . . . users and ‘match’ it to other
users . . . based on objective factors applicable to any content.” As mentioned, a large language model can
be “trained simply to predict probabilities for the next plausible word or phrase given previous words or
phrases.” Some scholars have argued that this sort of probabilistic compilation could likewise be
considered a tool that operates neutrally, regardless of the particular content to which it is being applied.
The same algorithmic process that generates an output containing defamation or other illegal content in
response to some user interactions could generate lawful outputs in response to other interactions. The
neutral tools test, however, has been criticized by some, including with respect to how it might apply to
AI products. A court could deny Section 230 immunity without resorting to the neutral tools test if it
concluded in a given case that an AI output was created by the AI provider rather than information created
by another person.
In all of these potential analyses, details will matter. Regardless of how the contours of the analysis are
ultimately defined, current case law suggests that courts applying Section 230 to claims involving
generative AI products would need to look closely at how the particular AI product at issue generates an
output and what aspect of the output the plaintiff alleges to be illegal. Because generative AI products are
not all the same, are likely to continue to evolve, and can rely on data and inputs from disparate sources,
Section 230 analysis may lead to different outcomes in different cases.

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Considerations for Congress
As Congress contemplates regulating generative AI, it may consider whether any proposals that would
impose liability on generative AI companies would potentially conflict with Section 230 immunity. If so,
Congress might consider creating Section 230 carveouts in any new legislation. Without such a carveout,
courts may construe a law that imposes civil liability on generative AI companies to be limited by Section
230. For instance, Congress could create a new private right of action for harms stemming from
generative AI outputs. The new right of action could define the elements a plaintiff would have to prove
to establish liability and could specify whether Section 230 provides a defense. Congress might also
consider creating new immunities to legal claims that relate to generative AI outputs. A new immunity
could preclude liability regardless of whether Section 230 may also apply.
In addition, Congress could amend Section 230 to address generative AI directly. This sort of amendment
could extend immunity to claims arising from generative AI products, withhold immunity from such
claims, or extend immunity to certain types of claims and withhold it from others. A bill introduced in the
118th Congress (S. 1993), for example, would withhold Section 230 immunity “if the conduct underlying
the claim or charge involves the use or provision of generative artificial intelligence by the interactive
computer service.” This bill would remove immunity not only for generative AI providers but also in any
claim involving a provider’s use of generative AI. Alternatively, Congress could wait to see how courts
address defenses under the current version of Section 230 in cases based on outputs from generative AI.
Other proposals to more broadly amend Section 230 could also have implications for generative AI. For
instance, the DISCOURSE Act (S. 921) would effectively create an exception for certain service
providers that modify or alter others’ information. This approach could sweep in generative AI that edits
third-party content in creating new outputs.
Congress’s ability to regulate in this area could be limited by the First Amendment’s Free Speech Clause.
Some scholars have argued that generative AI output is protected by the First Amendment, either because
the creators use the program as a means of expression or because the program’s users have a right to use
generative AI as a method of creating or receiving expression. The Supreme Court has ruled that “the
creation and dissemination of information are speech within the meaning of the First Amendment,” such
that even factual information (and sometimes false information) can be constitutionally protected. These
cases suggest a law creating or allowing liability for using generative AI could implicate free speech
interests. If Section 230 did not bar a lawsuit, whether under existing interpretations of the law or because
Congress created a new exception, the protections of the First Amendment might still apply.
A law that affects speech is not necessarily unconstitutional, however. First Amendment protections are
not absolute. Instead, courts apply different types of constitutional scrutiny depending on the type of
speech being regulated and how the regulation affects that speech. A law amending when Section 230
immunity applies might be scrutinized differently than a law more directly regulating generative AI
activity. Further, for example, laws that regulate speech based on its content are generally subject to
stricter constitutional scrutiny than content-neutral regulations. Thus, the constitutionality of a law
regulating generative AI, including through an amendment to Section 230, may depend in part on whether
the law targets the function of a generative AI program or its expressive output and on whether it targets
specific types of AI outputs based on their content.

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Author Information

Peter J. Benson
Valerie C. Brannon
Legislative Attorney
Legislative Attorney

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