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FTC v. Accusearch Inc.

FTC v. Accusearch, Inc., 570 F.3d 1187 (2006)

Opinion(external link)

Facts / Procedural History:
  • Akiba.com is a website owned by Accusearch. Akiba made money by selling private telephone records. It worked only as an intermediary - all research was done by outside parties. The outside researcher would bill Accusearch, and Accusearch would bill the end-user. The Accusearch website stated that its users could acquire "details of incoming or outgoing calls from any phone number... for every country of the world."
  • The FTC brought an action to stop Accusearch and its president (Collectively "Accusearch") from continuing sales of personal data and to disgorge its profits made from allegedly illegal sales. The District Court issued the injunction, and Accusearch appealed.

Important Cases / Statutes Cited:
  • The Telecommunications Act of 1996, 47 U.S.C. § 702 (2006) ("FTCA") prohibits private telephone records from being disclosed.
  • The Communications Decency Act, 47 U.S.C. § 230 (2006) ("CDA") was Accusearch's basis for the claim that it was immune to this suit.
  • 28 U.S.C. § 1291 provides the necessary jurisdiction.

Holding:
  • Affirmed. The injunction stands.

Reasoning:
  • The Court found that the acquisition of the telephone information would "inevitably require someone to violate the the Federal Telecommunications Act." It was undisputed that the records fell into the category of those that the Act sought to protect.
  • Accusearch claimed that it violated none of the FTCA's provisions against "unfair or deceptive acts or practices in or affecting commerce." The court, examining the three prongs of the FTCA that dictate "unfairness," sided with the FTC in this regard. The Court reasoned that all three prongs were satisfied. The court also seemed to take note that practices that "encourage condemned conduct or the use of fraud or theft to circumvent the statute" may be unfair.
  • Accusearch also claimed that it had immunity under the CDA. The CDA was intended to "facilitate the use of development of the Internet by providing certain services an immunity from civil liability arising from content provided by others." This is much like an online bulletin board getting immunity from a user's reckless posts. The Court did an in-depth examination of the CDA to see what constituted 1) an "Interactive Computer Service," 2) a "publisher or speaker," and 3) "information provided by another information content provider." The Court dodged #1 and #2, and it decided based on #3.
  • The Court finds that Accusearch was an information content provider. However, it does not agree with Accusearch that it is a "provider of neutral tools," where people can "advertise and request" telephone records. The Court held that Accusearch's role wasn't really neutral enough to fall into the third CDA prong. "Its actions were intended to generate such offensive content."

Criticism / Analysis:
  • This case seems to put a tangible clamp on the CDA. The Court seems as if it's making a policy / common sense based distinction between a website like a web forum, a site that's truly neutral, and a site that actively gathers information for you.
  • The FTCA portion of the opinion didn't bring any surprises. Accusearch didn't even put up that much of a fight with it, instead opting to focus much of its defense under its alleged immunity under the CDA.




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