Tech under fire: White House meets with GOP AGs on tech liability

CNBC's Ylan Mui meets with state attorneys general on tech. With CNBC's Melissa Lee and the Fast Money traders, Guy Adami, Tim Seymour, Karen Finerman and Steve Grasso. Subscribe to CNBC PRO for access to investor and analyst insights on tech and more: https://cnb.cx/3dIH56N

The Department of Justice proposed legislation Wednesday to reform a key legal liability shield for the tech industry known as Section 230.

The draft legislation focuses on two areas of reform. First, it aims to narrow the criteria online platforms must meet to earn the liability protections granted by Section 230. Second, it would carve out the statute’s immunity for certain cases, like offenses involving child sexual abuse.

Section 230 of the Communications Decency Act protects online platforms from liability for their users’ posts, but it also allows them to moderate and remove harmful content without being penalized.

The statute’s protections helped tech platforms grow from the early days of the internet but have come under scrutiny in recent years as lawmakers and regulators more broadly question the tech industry’s power.

Several lawmakers have proposed reforms to Section 230 in recent months, and President Donald Trump signed an executive order in May targeting the law, claiming to crack down on alleged “censorship” by tech platforms. Trump introduced the order shortly after Twitter slapped fact-check labels on his tweets for the first time.

Representatives from Twitter, Google and Facebook were not immediately available to comment about the DOJ’s proposal, which would need to be passed by Congress.

Nine Republican state AGs participated in a meeting with Trump and Attorney General William Barr at the White House Wednesday about the proposed reforms. Attorneys general from Arizona, Arkansas, Louisiana, Mississippi, Missouri, South Carolina, Texas, Utah and West Virginia spoke with reporters at a round table following the meeting along with Sen. Josh Hawley, R-Mo., a former state attorney general who has introduced his own legislation reforming Section 230.

The AGs have also been involved in a separate antitrust investigation into Google. DOJ has also been probing Google and is speaking with states this week about the possibility of collaborating on its reportedly imminent case, according to multiple outlets including Politico.

Following the White House meeting, Louisiana AG Jeff Landry told CNBC’s Ylan Mui in an interview that he plans to join a DOJ antitrust complaint against Google if federal enforcers file suit.

“We absolutely will be joining the U.S. Department of Justice,” Landry said. “If or when they take that action, Louisiana will be there. I certainly would encourage and hope that all of the states that participated in this investigation would join in as well.”

But Landry said state AGs could continue to pursue their own claims even if they differ from the DOJ’s. The New York Times reported that the federal case would focus on Google’s search business, while the state probe led by Texas has largely focused on Google’s digital advertising business.

“I could see us taking a parallel approach or a duel track to litigation under which we would join with U.S. DOJ and also pursue state claims as well,” Landry said.

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