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Fmr. DOJ Chief Economist on Section 230: Zuckerberg and Dorsey ‘don’t want complete immunity’

George Hay, Professor of Law and Economics at Cornell Law School and Former Chief Economist for the DOJ Antitrust Division, joins Yahoo Finance's Alexis Christoforous and Dan Howley to break down the takeaways from Tuesday's Big Tech hearing.

Video Transcript

ALEXIS CHRISTOFOROUS: Top US senators challenging Facebook CEO Mark Zuckerberg and Twitter CEO Jack Dorsey, renewing accusations that the companies are failing to moderate online speech. They also called for changes to legal protections that currently benefit the industry. Things did get heated at moments during these four plus hours, as members of the Senate Judiciary Committee grilled Zuckerberg and Dorsey about their business practices.

I want to bring in George Hay now. He's a professor of law and economics at Cornell Law School. He's also a former chief economist for the DOJ Antitrust Division, also joined by Yahoo Finance's tech editor, Dan Howley. Good morning to both of you gentlemen. I know that you've also been watching these hours of testimony.

And Professor, I'd like to start with you. Zuckerberg and Dorsey, throughout these hours, touted improvements that their companies have made in blocking or reducing misinformation in the 2020 election. Do you think their argument was a convincing one?

GEORGE HAY: Well, I think it convinced half the people and not the other half. No, they're in a difficult place. You got some senators who don't want them to change the content at all, want to be completely neutral. And then other senators want them to be-- come down hard on Republican content or conservative content, and Republican senators want to come down hard on Democratic content. So they're in a very difficult place. I'm sure they can-- they did, I think, very well, but I'm convinced-- I'm sure they did not convince all of the audience.

DAN HOWLEY: Professor Hay, this is Dan Howley. I want to ask, you how, we saw a good amount of back and forth, you know, the different grievances that either Republicans or Democrats have with social media, and Section 230, to a degree, was brought up. But I want to ask you, you know, since we didn't get any substantive ideas from anyone about what kind of changes they want to see, outside of increased transparency-- whatever that means-- what, I guess, kind of changes could we see to Section 230 to-- that would kind of, you know, I guess speak to the problems that both sides seem to have?

GEORGE HAY: I think both Zuckerberg and Dorsey endorsed some changes in 230. They don't want complete immunity, and I think they've been behaving in a way as if they did not have immunity, that they're trying to exercise some control over content. So I'm not sure there's a big disagreement about the changes that can be made in 230 and will be made. The fight is going to come afterwards, when they're in a position where they're supposed to exercise some control over content. And there's going to be dispute about what control they're exercising.

ALEXIS CHRISTOFOROUS: Professor, what--

DAN HOWLEY: I guess--

ALEXIS CHRISTOFOROUS: Yeah, I think I'm with you on this, Dan, because I'm wondering, what-- I mean, both CEOs said they're open to Section 230 reform. But after what you heard from those lawmakers today, Professor, what kind of reform might that even be?

GEORGE HAY: That's hard to say. The Department of Justice released a draft bill this morning, I believe. The basic idea is expose them to some form of liability. They'd still be-- people would have to go to court and show they were damaged. But in theory, they can be liable if their failure to act causes harm to others. You know, I don't think there's much more meat on the proposal than that. But again, both executives seem willing to live with some limitations on their immunity.

ALEXIS CHRISTOFOROUS: Hey, Dan, I want to ask you what moments sort of stood out to you within these four plus hours of questioning.

DAN HOWLEY: You know, I think so some of the more, obviously, bombastic speeches from the likes of Senator Ted Cruz, you had what felt like no question and then super fast questions from Senator Cory Booker talking about the election. Senator Blumenthal, though, did offer some kind of information, seemingly, at the end there, saying that we want people to come back.

There was a lot of talk about protecting children against predators in these social networks. That's something that they have work to do. There's been discussions on whether or not that actually helps or hurts sex workers in social media spaces, outside of, obviously, the issues with child predators.

But I really didn't see anything that was kind of outside of what we've seen already. This felt very much like a rehash of what we heard from the Senate Commerce Committee hearing and then as well as what we saw from the House subcommittee hearing on antitrust, which was supposed to be about antitrust, but Section 230 came up there.

So it's clear that you know senators and representatives on both sides of the aisle want to see some kind of change. They just haven't given us an idea of what that change would look like. And you know, as Professor Hay had said, it seems as though the companies themselves are really offering solutions here, and then that the senators and representatives say, oh yeah, that might sound like a good idea. We could get behind that. So it really doesn't seem as though they're doing their job that they should be doing.

ALEXIS CHRISTOFOROUS: All right, we're going to leave it there. Professor of law and economics at Cornell Law School, George Hay, we want to thank you for your time, and Dan Howley as well.