Copyright 1995 American Lawyer Newspapers Group, Inc.
New Jersey Law Journal
June 26, 1995
LENGTH: 436 words
HEADLINE: Online on Trial

A New York trial judge's decision to permit an investment bank to proceed with its libel action against Prodign, one of the most widely-used providers of online computer services, sent a brief shudder through the Internet recently. Stratton Oakmont, Inc., an investment bank, sued Prodigy for $ 200 million in damages because of a message that had appeared on "Money Talk," one of the bulletin boards Prodigy sponsors, accusing the bank and its president of having committed "criminal and fraudulent acts" in connection with a public offering. Prodigy protested in vain that it has no control over the content of the messages its subscribers choose to post on bulletin boards. It was held to have acted as a publisher, as opposed to a distributor and, as such, was subject to liability for libelous statements appearing online through its auspices. Its motion for summary judgment was denied, summoning once again the specter of censorship in cyberspace.

Hackers and other partisans of cyberspace need not tremble, however. Internet freedom is not likely to be extinguished by the outcome of Stratton Oakmont, Inc. v. Prodigy Services Co., No. 31063/94 (N.Y. Sup. Ct. May 24, 1995). Whether plaintiffs ultimately prevail on their libel claim or Prodigy is vindicated, the case is not precedent for requiring every provider of online services to exercise editorial control over every message posted to a bulletin board.

Prodigy is in the position it is because it has a stated policy of exercising editorial control over the content of its bulletin boards and has marketed itself to potential subscribers as a "family-oriented" service. Judge Stuart Ain held that this policy made Prodigy liable for content in a way that Compuserve, Inc., a competing service, was not. He noted that Compuserve, provides only the online service without setting criteria for content. In contrast, Prodigy promulgates content guidelines for its users as well as for the people it engages to operate its bulletin boards. Prodign subscribrs are asked to refrain from posting "bad taste" or "grossly repugnant" notes on bulletin boards; the company even installed a screening program to detect and block offensive language. Bulletin board operators are given instructions to ensure that postings conform to Prodigy's standards of decency and a special delete function so they can remove offensive material.

Having made the decision to censor its own portion of cyberspace, Prodigy is properly called to account if the material it disseminates is libelous. Exercising control requires assuming responsibility.