The Metaverse of Products Liability: Are Tech Companies 'Products'?

Article

The Legal Intelligencer

January 24, 2023

Products liability claims have long focused on physical products. As technology advances and software and social media play an ever-expanding role in our lives, novel products liability theories have emerged targeting social media platforms, software developers, and purveyors of new technologies on the grounds that these tech companies are “product sellers” and their communication platforms are “products.” However, these novel claims test the limits of products liability law and run afoul of basic products liability principles, as tech companies are not product sellers and the electronic communication platforms they offer are not products within the meaning of products liability law.

Section 230 Immunity

Tech companies enjoy broad protection from liability for online content posted to their social media platforms and electronic communication forums under Section 230 of the 1996 Communications Decency Act. Section 230 immunizes these platforms and forums from liability for the content of their users’ posts. As most claims arising from the alleged misuse of social media or posting of potentially tortious content online concern the content itself, Section 230 has consistently been applied to protect tech companies from liability for claims based on the content of social media and electronic communication forums. Indeed, Section 230 has been used successfully as a shield against liability since before many of today’s largest tech companies were even founded.

New Use of an Old Theory

Given the broad, claim-preclusive effect of Section 230, plaintiffs are beginning to rely on an old theory as part of a new effort to hold tech companies liable for online content: strict products liability. Plaintiffs argue that social media platforms and electronic communication forums are products and their designers are product sellers who can be liable under products liability theories for design defect, manufacturing defect and failure to warn. Plaintiffs contend these claims are permissible because no category of product is immune from strict liability, some courts have held that software and computer programs are products within the meaning of products liability law, and the products liability claims are directed to the design of the platform itself rather than user-generated content, making Section 230 inapplicable.

This novel theory of liability raises two threshold questions: Are the purveyors of social media platforms and electronic communication forums product sellers within the meaning of products liability law; and are social media and online communication forums products? There is a separate question of whether Section 230 should nevertheless apply to bar product liability suits against tech companies, as the design features that permit the publication of allegedly tortious content cannot easily be separated from the content itself. This article seeks to address why products liability allegations against tech companies are incompatible with the law of strict products liability.

Tech Companies as Product Sellers?

A products liability claim can only be brought against a product seller, but tech companies who provide social media platforms and online communication forums should not be classified as product sellers. These entities do not engage in the design, manufacture, and sale of products, but rather are in the business of providing technology for the dissemination and exchange of online content. The law of products liability has never been extended to hold liable publishers and facilitators of allegedly tortious words, images, or other content.

The maxim that “to be subject to a products liability claim, one must be a product seller” has been applied to immunize from liability entities that come far closer to engaging in the sale of a product than tech companies. For example, brokers and auctioneers are generally not considered product sellers within the meaning of products liability law, even though these entities may be involved in the distribution of a product to a user. It is true there have been efforts to impose liability on online marketplaces, but at least in those instances the online marketplace is alleged to have facilitated the sale of a physical product, not merely hosted online content. See Oberdorf v. Amazon.com, 930 F.3d 136 (3rd Cir. 2019).

Social Media and Online Forums as Products?

Social media platforms and online communication forums are not products according to the traditional understanding of products liability law. They are not tangible products that come into direct or proximate physical contact with the user. Moreover, written content has not been classified as a product for purposes of products liability law, as the theories of liability that have traditionally been used to hold responsible the speaker or writer of tortious communication do not include products liability claims.

Unlike with traditional products, for which the design features, manufacturing processes, and written warnings are the work of their sellers, responsibility for creating social media posts and other online content rests with the user, not the platform that hosts the content. Creation of online content, whether words or images, is not the work of the social media platform or online marketplace, but the user who posts the content. No one would suggest that a tech company is the author of content posted to its platform in the same way a manufacturer is the author of warnings that accompany a product it has designed and sells. A bedrock principle of products liability law is that a manufacturer can only be liable if a product it designs and sells is the source of the alleged harm. Novel products liability theories against tech companies do not satisfy this requirement, because plaintiffs seek to hold tech companies responsible for content created by a user of the platform, not by the tech company itself.

Products liability law is premised on the notion that a manufacturer has the resources, knowledge, and ability to ensure the safety of the products it sells. As a result, manufacturers are considered to be experts in the products they sell and have a corresponding duty to their users. Tech companies, in contrast, are experts in the development of social media platforms and online communication tools, but are not experts in the myriad content posted to their sites. Tech companies cannot be presumed to possess sufficient knowledge and skill to ensure all content posted to their sites is accurate, appropriate and unlikely to put users at risk. Requiring tech companies to police the varied and diverse content posted online in the same way manufacturers of traditional products are expected to ensure the safety of users would require tech companies to be experts in every topic on which a user posts to ensure the content does not create an unreasonable risk of harm to the platform’s other users. Imposing such a duty is simply not workable, nor is it supported by products liability principles.

Reprinted with permission from the January 24, 2023 issue of The Legal Intelligencer. © 2023 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.