Inc. v. CompuServe Cubby Inc.

The Cubby case highlighted the beginning struggle by the courts to assess accountability for illegal conduct on the Internet. The Cubby decision strengthened the legitimacy of online servers as publishers and distributors of information. The decision better defined the roles of on-line services, and extended to these services the same First Amendment protections enjoyed by other forms of journalism and expression.

In determining whether CompuServe was like a publisher or a common carrier, like telephone companies, the court determined the latter. However, Internet libel law was still in its infancy as the 1990s progressed. Surprisingly, the number of Internet libel cases did not skyrocket through the 1990s as some anticipated.

As the electronic media market grew, still more definition of liability and on-line libel was needed. In the case of Stratton Oakmont v. Prodigy Services Co. (1995), the New York Supreme Court found that Prodigy was liable for statements published on a bulletin board it supported. Critics charged that the courts in essence rewarded companies, such as CompuServe in the Cubby case, who exert little control over the material they transmit by greatly limiting their liability for the nature of material transmitted. Whereas, a server such as Prodigy is charged with much greater liability because they attempted to screen materials submitted for transmittal.

Quickly, Congress passed the 1996 act to regulate the material transmitted on the Internet and limit the liability of service providers such as CompuServe and Prodigy. The Supreme Court in Reno v. American Civil Liberties Union (1997) struck down parts of the law regulating Internet content on First Amendment freedom of speech grounds, but the section of the law addressing server liability remained valid. The courts in Zeran v. America Online (1997) provided an even broader interpretation of the immunity to prosecution that the service providers hold. Additional questions of Internet service provider liability for libel arose in 1997 when White House aide Sidney Blumenthal field suit against America Online and a columnist employed by AOL, Matt Drudge. The courts dismissed AOL from the suit based on immunity from the Communications Decency Act and Drudge claimed constitutional protection, which journalists have in reporting on public figures.

A wide range of defamation and other liability issues continued to confront online service providers and their users through the 1990s. Strong interest over legislatively regulating the Internet and protecting innocent individuals from defamation continued as the decade came to a close.