Nancy Pelosi wants to scrap legal protections for Big Tech in new trade agreement

Washington, DC(CNN Business) House Speaker Nancy Pelosi is working to strip key legal protections from tech companies under a long-awaited trade agreement with Canada and Mexico.

Pelosi's push highlights how a groundswell of skepticism about the tech industry has reached the highest levels of congressional leadership, and could result in a setback for Silicon Valley as the Trump administration negotiates the United States-Mexico-Canada Agreement (USMCA).

The tech industry has argued aggressively for including the protections, saying it would help shield businesses from legal exposure they would otherwise face for much of the content others post on their platforms.

But an ongoing debate at home about whether tech companies continue to deserve such expansive protections — under Section 230 of the Communications Decency Act — has led to calls for those rights to be excluded from international trade deals.

"There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements," said Henry Connelly, a spokesperson for Pelosi, "particularly at a time when Congress is considering whether changes need to be made in US law."

The Wall Street Journal was first to report the news.

Policymakers have increasingly zeroed in on Section 230 amid mounting scrutiny of major tech companies and the way they moderate their platforms. Sen. Josh Hawley, a Republican and an outspoken critic of Silicon Valley, has proposed legislation that could roll back the law's liability protections for companies that fail to meet a government-mandated standard for political neutrality.

Earlier this year, a draft White House executive order called for the Federal Communications Commission to develop new regulations to clarify when and how social media companies are legally protected for removing or suppressing content on their platforms. The effort prompted questions about the proposal's constitutionality and swift pushback internally from agency officials.

Michael Beckerman, president of the Internet Association, a tech trade group, argued in a statement Thursday that excluding the protections from USMCA would "negatively impact" entrepreneurs who use online platforms to promote their businesses.

Making content liability protections a part of US trade deals, he said, would "ensure that people across the world can share their thoughts, ideas, and viewpoints without government intervention."

Pelosi's comments come as congressional Democrats say they are in the final stretch of negotiations with the administration for changes to Trump's revised North American Free Trade Agreement (NAFTA). Democrats have pushed for stronger labor and environmental standards to be enshrined in the pact, as well as firm enforcement provisions. Pelosi says she hopes to hold a vote on the trade deal by the end of the year, although calendar time will be tight in the weeks ahead.

Pelosi has been working closely on the tech protections issue with Rep. Frank Pallone, who chairs the House Energy and Commerce Committee, as well as Rep. Jan Schakowsky, who serves on the nine-member working group that has met with US Trade Representative Robert Lighthizer for months to hammer out USMCA's language, according to a Democratic aide.

It could be an area of bipartisan agreement: Republicans and Democrats alike have raised concerns about modeling parts of trade agreements after Section 230. In August, Pallone and Rep. Greg Walden, the top Republican on the Energy and Commerce Committee, sent a letter to Lighthizer criticizing his handling of the issue.

"We find it inappropriate for the United States to export language mirroring Section 230 while such serious policy discussions [about the law] are ongoing," the letter read.

Walden later slammed the Trump administration for allowing language similar to Section 230 to appear in a trade deal with Japan, which was announced in September and ratified by Japan's legislature on Wednesday. That deal is expected to take effect in January.

At a congressional hearing in October, Walden said he was "very frustrated" about not being consulted and that he hoped "the administration's paying attention and listening, because they haven't up to this point on the matter."