Foundations for Platform Liability

Kathryn E. Spier* & Rory Van Loo**

From spreading misinformation to selling deadly products, bad actors use technology platforms to their advantage while causing devastating harms to privacy, health, and even democracy. Despite their central role in enabling these bad actors, the platforms almost entirely escape liability. This legal immunity is purportedly grounded in economics. From the beginning, courts and legislatures feared that liability would chill innovation, growth, and user access. They also speculated that platforms have sufficient market incentives to voluntarily police bad actors, making liability unnecessary.

Whereas many scholars have argued that platform immunity is blind to justice, this Article shows that it is also blind to economics. We challenge the fundamental precepts that market incentives suffice and that liability inevitably brings detrimental chilling effects. By tracing the legal origins of platform immunity and synthesizing decades of legal and economic research, we show how judges and lawmakers have consistently applied shallow or misguided economic reasoning. Their misconceptions rely on an outdated depiction of economics and a narrow view of efficiency. Once updated for key factors such as platforms’ financial incentives to allow bad actors and the feasibility of platforms deploying automated monitoring technologies to prevent harms, economics fails to justify a broad shield against liability.

Instead, economics offers a promising roadmap for holding platforms accountable for their harms while preserving their social benefits. Designing a better liability framework is increasingly important as advances in artificial intelligence accelerate technology’s presence in our everyday lives, creating unpredictable opportunities for bad actors to weaponize platforms. Anchoring platform liability more effectively in economic reasoning will help create a more adaptive legal framework that keeps pace with the future.

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© 2025 Kathryn E. Spier & Rory Van Loo. Individuals and nonprofit institutions may reproduce and distribute copies of this Article in any format at or below cost, for educational purposes, so long as each copy identifies the author, provides a citation to the Notre Dame Law Review, and includes this provision in the copyright notice.

*Domenico De Sole Professor of Law, Harvard Law School; Research Associate, National Bureau of Economic Research.

**Professor, Boston University School of Law; Affiliated Fellow, Yale Law School Information Society Project. For insightful comments, we are grateful to Ella Corren, Stacey Dogan, Evelyn Douek, Keith Hylton, Louis Kaplow, Vikramaditya Khanna, Gary Lawson, Mark Lemley, A. Mitchell Polinsky, Christopher Robertson, Stephen Sachs, Steven Shavell, and to participants in workshops at UC Berkeley School of Law, Boston University School of Law, the Consumer Law Scholars Conference, Harvard Law School, Vanderbilt Law School, and Stanford Law School. Ally Brennan, Preetham Chippada, Tess Cushing, Peter Erberich, Ethan FitzGerald, Suzanne Golshanara, Jackson Gossett, Maxwell Kavanaugh, Sydney Thomas, and Greg Umansky provided excellent research assistance.