US Supreme Court will not examine tech industry legal shield
U.S. Supreme Court is seen in Washington, U.S., October 3, 2016. REUTERS/Yuri Gripas

The U.S. Supreme Court on Monday let stand a lower court's decision that an online advertising site accused by three young women of facilitating child sex trafficking was protected by a federal law that has shielded website operators from liability for content posted by others.

The refusal by the justices to take up the women's appeal in the case involving the advertising website marked a victory for the tech industry, which could have faced far-reaching consequences had the Supreme Court decided to limit the scope of the Communications Decency Act, passed by Congress in 1996 to protect free speech on the internet.

The women, who sued Backpage and several of its parent companies in Boston federal court in 2014, alleging that they were "repeatedly forced as minors to engage in illegal commercial sex transactions" in Massachusetts and Rhode Island starting at age 15 by pimps who placed advertisements in the website's "escorts" section.

They were appealing a March 2016 ruling by the Boston-based 1st U.S. Circuit Court of Appeals dismissing their case. That court said the Communications Decency Act grants broad protections to internet publishers. The Communications Decency Act prevents an internet service from being held liable as the "publisher or speaker" of its user-generated content.

Over the past two decades, the law has provided an effective legal shield for the technology industry, protecting social media and e-commerce sites from liability in a variety of lawsuits over unsafe products, stolen property and facilitating prostitution.

However, some judges have ruled that the law has been stretched too far.

The three women, not identified by name in the lawsuit, argued that the law is being used to block enforcement of federal and state laws against human trafficking and could undermine efforts to combat other crimes such as terrorism and racketeering.

According to the women, the site profits from the ads and uses techniques, such as anonymous payments, to help traffickers avoid police detection.

Backpage, the second-largest U.S. online classified ad service after Craigslist, has faced scrutiny from the U.S. Senate as well as civil lawsuits over allegations that the website facilitates sex trafficking, especially of children.

Its CEO, Carl Ferrer, was arrested last October on criminal charges including pimping but a California state judge later threw out the case against Ferrer and Backpage's controlling shareholders, ruling that the Communications Decency Act barred prosecution.

California prosecutors subsequently refiled charges against the executives, and the case is pending.

The case is Jane Doe No. 1 et al v., LLC, et al in the Supreme Court of the United States, No. 16-276

(Reporting by Andew Chung in New York; Additional reporting by Dan Levine; Editing by Will Dunham)