Yahoo closes user-created chat rooms over sexual conduct

June 24, 2005

Yahoo! (NASDAQ: YHOO) closed all of its user-created chat rooms due to controversy over sexually explicit channels aimed at minors. After a Houston, Texas television station KPRC reported on chat room names such as "Girls 13 And Under For Older Guys" and "Girls 13 And Up For Much Older Men" that were aimed at sex with children, the publicly held business Yahoo! was compelled to act by shutting down all chat rooms created by users and stopped the ability to create new user chat rooms. Online chat rooms created by the company itself are still in service and use.

Major brand name advertisers such as PepsiCo Inc., Georgia-Pacific Corp., State Farm Mutual Automobile Insurance Co., Countrywide Mortgage and T-Mobile withdrew ads placed on Yahoo! web pages that may have come under association with the offensive chat rooms. The company is also faced with a lawsuit seeking $10 million in damages that was filed by watchdog groups of internet portals on behalf of the parents and a 12-year-old victim of molestation. A man, who once operated a Yahoo Groups site where members traded child pornography, is also involved in the suit.

Other internet portals, such as AOL and MSN, also allow users to create their own chat rooms. These internet portals are different from Yahoo! in that they are subscription based, and only allow access to the rooms if the user is a subscriber to the service. MSN in its earliest versions of chat had monitors watch activity on its servers, but it was abandoned. Efforts to monitor chat for any effect appear to be futile. Geoff Sutton, the European general manager of Microsoft MSN, told Wired News at the time it cut free chat service in 28 countries that, "The straightforward truth of the matter is free, unmediated chat isn't safe."

According to a Reuters news story by Duncan Martell, an investigation by the U.S. Federal Bureau of Investigation that was targeted at Yahoo Groups users resulted in the arrest of more than 100 people in the United States. The lawsuit now brought against Yahoo! was filed on May 9 in U.S. District Court for the Eastern District of Texas. It charges that Yahoo! breached its duties in internet providership by allowing co-defendant Mark Bates and others to share child pornography on a chat room site called 'Candyman'.

Yahoo!'s terms of use requires persons who create chat rooms to agree not to make available content that is "unlawful, harmful, threatening, abusive, harassing, defamatory, vulgar, obscene, libelous or otherwise objectionable." Legal rulings to date imply that if internet service provider's do monitor the activity in chat rooms, they incur some responsibility for its content, similarly to a publisher's responsibility for the content found in one of its books.

The result is software providers who take a "hands-off" approach grant internet users the ability to add and create content to the World Wide Web that opens the door to contributions that range from great to sometimes objectionable, to out-right illegal, and often enlightening.