Inc. Zeran v. America Online

Zeran next appealed to the Supreme Court, but the Court in 1998 refused to hear the case leaving the lower courts' decisions stand. To enhance its public image following the decision, AOL began conducting background checks of the key individuals involved in its various information forums. The checks were an attempt to increase accountability in a largely anonymous communications medium.

The speed, the volume, and the global access of the Internet has international implications legally as well as socially. The Internet has also become an important player in the globalizing commerce. One cautionary note was offered by Chris Hansen, senior staff counsel to the American Civil Liberties Union. Hansen believed that although it was good that ISPs were not treated as though they had to review every message on their site and decide on its defamatory nature, it was wrong that ISPs were free to apply whatever censorship they wished.

With the Internet, false statements highly damaging to peoples' reputations or their businesses could be easily transmitted anonymously to thousands of readers. Critics charged the Zeran decision left individuals with almost no legal recourse to correct the injury caused. They claimed the courts went well beyond the literal meaning of the CDA and safeguarded speech not commonly protected by the First Amendment. ISPs received greater protection than any other entity in communications, essentially all the immunity of a common carrier without any regulatory accountability carriers normally bear.

The Supreme Court clearly ruled in Reno v. American Civil Liberties Union (1997) that protection of free speech in cyberspace was of paramount importance. Courts began to struggle with protecting individuals from defamatory statements and right to privacy. Over 130 bills were pending before Congress addressing the regulation of speech on the Internet by the end of 1997. Many believed that libel law in general was ineffective, and its application to the Internet only compounded the shortcomings, neither protecting the authors of statements nor the subjects of those statements.

Identifying customers using pseudonyms to post critical comments on the Internet became a important issue in a 1998 Canadian case. A Canadian court ordered two Canadian Internet service providers to identify names of libel suspects allegedly posting anonymous critical comments about Philip Services Corporation of Canada, a recycling company suffering major financial losses in 1997. The ruling could force ISPs to notify users that their privacy cannot be guaranteed, or else the providers could be vulnerable to liability.