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Court Slams the Brakes on Car-Rental App Turo in Boston Airport Test Case

Experts warn that Wednesday's ruling could lead more websites and apps to find that they have less legal protection than they thought they did.

BOSTON (CN) — In a key test case for the “sharing” economy, the Massachusetts Supreme Judicial Court ended a free ride Wednesday for a car-sharing app that has been skirting the rental-car rules for years at Boston’s Logan Airport.

Massport, which operates the airport and collects some $80 million a year from the rental-car companies that operate there, brought the case to stop the popular car-sharing website Turo from interfering with that revenue stream by facilitating airport pickups.

The numbers are significant: Turo facilitated more that 8,500 airport handoffs in 2018 and 2019, which was about half its Boston business and netted the company more than $1 million. Massport argued that, since it requires all car rentals to be handled through a central facility, users of the app are trespassing — and Turo is aiding and abetting the trespass.

Hit with a federal injunction, Turo claimed on appeal that it was protected by Section 230 of the 1996 Communications Decency Act. The law says that websites can’t be sued over content posted by users, and Turo argued that it couldn’t be held liable because the rentals are simply agreements between its users.

But the Massachusetts high court said that wasn’t the case.

For one thing, Turo actively encouraged airport pickups with advertisements to “skip the rental counter” and a dedicated search button for vehicles at the airport. Even more important, Turo acted as a facilitator for the transactions.

Turo’s role “is far more than just offering a website to serve as a go-between among those seeking to rent their vehicles and those seeking rental vehicles,” Justice Serge Georges Jr. wrote for the court.

“Turo also provides substantial ancillary services to its hosts, such as collecting and remitting payments, offering (and mandating) liability insurance and roadside assistance that is available twenty-four hours per day and seven days per week, and screening guests before permitting them to rent a motor vehicle from a host," the 24-page opinion continues.

Turo also requires customers to adhere to “policies regarding cancellations, cleaning, late returns, security deposits, smoking, pets, privacy, and terms of service,” the court observed.

These additional services and rules meant that Turo isn’t just an online bulletin board and can be held liable for “aiding and abetting” its users’ illegal conduct, Georges wrote.

While Section 230 protects online publishers, the court said, it doesn’t “render unlawful conduct magically ... lawful” just because it’s on an app, and it shouldn’t be used to “give online businesses an unfair advantage over their real-world counterparts.”

The court cited other cases holding that Section 230 didn’t protect home-rental sites such as Homeaway and Airbnb from claims that their customers were breaking local laws, as well as a case suggesting that Amazon could be liable as a product seller and not just as an online go-between.

But the court did leave a window partly open for Turo, according to Eric Goldman, a Santa Clara University law professor who is a leading expert on Section 230.

While Turo can be held liable for its own content, it can’t be forced to “monitor and potentially to remove its hosts' noncompliant content,” the court noted.

That means Turo can’t have an airport button and can’t suggest that users skip the rental counter. Should Turo users specify on their own, though, that they want a handoff at the airport, Turo can potentially complete the transaction.  

“Turo’s users aren’t dumb,” Goldman said. “They can figure out that they can just specify the airport.” And if that happens, “this opinion didn’t accomplish Massport’s goal at all.”

Goldman said the opinion is ambiguous because it cites precedent that says an app can’t process an illegal transaction but it never specifically says that Turo can’t process one as opposed to promoting one. The court “punted,” he said.

Nevertheless, Sophia Cope, a senior staff attorney at the Electronic Frontier Foundation, worried that cases that limit the protection of Section 230 could cause many valid websites to shut down or curtail operations.

“More liability means more censorship,” she said, noting that Craigslist shut down its entire personals section rather than risk being sued over a few illegal ads after Congress amended Section 230 in 2018 to crack down on sex trafficking. “That affected thousands and thousands of legitimate users,” she said, “and it didn’t stop sex trafficking; it just drove it underground and made it harder to track.”

Section 230 has come under increasing criticism lately in part because of claims that it shields child pornography, terrorism and hate speech. Many Democrats complain that the law encourages deliberate right-wing political misinformation, and many Republicans are upset that it allows social media sites to censor posts based on political viewpoint.

There are a lot of Section 230 reform proposals in Congress right now, Goldman said, but there has been partisan gridlock because Democrats want more content moderation and Republicans want less.

This could lead to some “weird coalitions,” Goldman predicted. For instance, Republicans could agree on eliminating some offensive content and Democrats could piggyback on that, or Republicans could entice Democrats to let providers be sued for content by specifically permitting anti-discrimination claims. Or both sides could agree that providers could be sued for not following their own guidelines.

We could see “some serious violence done to Section 230,” Goldman says, which would “radically reshape the internet.”

Categories / Appeals, Business, Consumers, Technology

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