⚖️ The case that could change the internet

Hello! After over a year's break, I'm re-starting Legit. There are over 3,200 of you that this email is going out to today (check the new landing page to see where from) — I hope you'll stick around for the latest legal news and roundups of the newest legal tech startups.

In today's issue:

• The case that could change the internet

• Wallstreet founder vs. Reddit

• Legaltech startups to watch out for

BIG TECH

The case that could change the internet

The Supreme Court is about to reconsider Section 230, a law that's protected internet providers for decades. The case may have unintended consequences on how we view models like ChatGPT.

What's happening? Next week, the SC will hear arguments in Gonzalez v. Google. The case is mainly about whether YouTube can be sued for hosting accounts from foreign terrorists, but the bigger underlying question is whether algorithmic recommendations should receive the full protection of Section 230 (since YouTube recommended those accounts to others).

• Section 230 is a law that generally provides immunity for website platforms with respect to third-party content.

Why is this a big deal? Large language models, like ChatGPT, are being pushed as the future of search. Instead of using increasingly cluttered conventional search engines, people can ask AI-powered search engines — like Google Bard or Microsoft's new Bing — a question and be presented with direct, conversational answer.

Just like a lot of content on the web, these large language models don't always spit out the most accurate information. Bard got an astronomy fact wrong in its first demo, and Bing made up entirely fake financial results for a publicly traded company in its first demo. If hallucinating incorrect facts crosses into spreading defamatory information or unlawful speech, it puts the search providers at risk of lawsuits.

Normal search engines can use Section 230 as a protective blanket if they link to inaccurate information — they're able to argue that they're just posting links to content from other sources. The situation is way more complicated for AI-powered chatbots.

The important question. The heart of the Gonzalez case is whether a web service can lose Section 230 protections by organising user-generated content in a way that promotes or highlights it. Whatever the outcome, the case throws light on whether AI search engines are repeating somebody else's unlawful speech or producing their own. The question gets even more muddy when you dive into the complexities of how LLMs work. For example, you can intentionally nudge large language models into giving you false information if you repeatedly ask it leading questions.

TL;DR: the Supreme Court will reconsider the fundamentals of internet law next week, and the ruling will have (as of now) unknown effects on the future of AI-powered search engines.

WALLSTREETBETS

The founder of WallStreetBets sues Reddit

Jamie Rogozinski, the creator of WallStreetBets — the force that ignited 2021's GameStop frenzy — filed a lawsuit against Reddit on Wednesday.

The backstory. Rogozinksi created r/WallStreetBets in 2012 with the intention of creating a community for everyday, unsophisticated investors who don't know the intricacies of stock trading. The subreddit went viral in 2020 for encouraging traders to buy and hold 'meme' stocks like GameStop and AMC.

In 2020, Reddit terminated Rogozinksi's role as a moderator for "attempting to monetize a community" after he published a WallStreetBets book, tried to trademark WallStreetBets, and started his own esports trading competition. He was soon ousted from the community altogether over claims he broke the subreddit's rules against self-promotion.

Now, Rogozinski is claiming Reddit wrongly banned him from the community and infringed his right to trademark the forum. He wants damages of at least $1 million, and for Reddit to stop using the WallStreetBets name until he's anointed the "senior-most" moderator of r/WallStreetBets.

Cash grab? According to Reuters sources, a coronation is unlikely. "Jamie was removed as a moderator for attempting to enrich himself. This lawsuit is another transparent attempt to enrich himself."

One liners

• Teachers in Florida are emptying classroom libraries to avoid going to jail.

• SEC charges Terraform Labs and founder Do Kwon with defrauding investors.

• Is AI art stealing from artists? Featuring Drake.

• Ex-Beyond Meat COO pleads guilty to felony after taking a bite out of a stranger's nose.

• U.S. fines firm $1.5 million for hiring kids as young as 13 to clean meatpacking plants.

Legal tech to watch

Charta: music contracts built for this millennium.

• Blurb: Charta lets artists create, negotiate and sign contracts in 15 minutes or less. Built by an all-star team with expertise in entertainment law and an extensive music industry network from representing clients like Metallica, Kanye West, Frank Ocean and more.

• Location: LA

• Value prop: music industry contracts are a mess (examples here).

• Stage: pre-seed.