A US court has ruled that Section 230, the internet’s shield for tech giants, doesn’t apply to Meta’s AI-enhanced ad copy – but it doesn’t matter, as the plaintiffs still lost their case.
Fake News Factory
Two cases involving scammy ads on Facebook, part of a pump-and-dump for Chinese penny stocks, made their way to court in March. In the Bouck and Suddeth v. Meta case, Facebook was accused of promoting fake news that artificially inflated the value of these stocks. The ads were created using Meta’s AI system, which was designed to generate ad copy.
AI-Generated Ads Out of Section 230’s Scope
The court rejected Facebook’s Section 230 defense, which would have protected the company from liability for user-generated content. Section 230 states that online platforms shouldn’t be held responsible for the actions of their users. However, the court ruled that this protection doesn’t extend to Meta’s AI-generated ad copy, as it’s considered content created by the platform itself.
This decision has implications for the use of AI in advertising. While Meta lost the case, the ruling sets a precedent for how courts view AI-generated content. It suggests that Section 230 may not apply to AI-enhanced features, like ad copy, that are created by the platform rather than its users.
No Liability for Meta</hassistant
Despite losing the case, Meta won’t face any financial penalties. The court determined that the ads were “materially misleading” but ultimately ruled in favor of the defendants on the issue of damages. The plaintiffs’ attempts to hold Meta liable for the scam ads failed, and the company won’t have to pay any damages.
This outcome is a win for Meta, but the ruling on Section 230 has broader implications for the use of AI in advertising. As AI technology becomes more prevalent, courts will need to grapple with how to apply existing laws to new AI-enhanced features. What this means for the future of online advertising is still unclear, but one thing is certain: tech companies will need to be more careful about how they use AI to create ad copy.
