Distributors of speech--bookstores are the most familiar example-- are liable for illegal speech only once it is called to their attention. The Supreme Court said in a case called Smith v. California that a bookstore owner cannot be expected to read everything in the store.
In Cubby v. Compuserve, a leading precedent for cyberspace, a federal judge ruled that Compuserve and other online services are electronic bookstores. If a user posts an illegal file or message, a service cannot be held responsible unless it knows the illegal material is there. However, a New York State judge in the case of Stratton Oakmont v. Prodigy held Prodigy to a higher standard, treating it as a publisher because it had once bragged that all messages on its forum were pre-screened.
A rule protecting online services as distributors, though intuitively correct, gives little comfort to users. Once the service has been put on notice that a user's message or file is considered illegal, it has little incentive to look into the matter or take a free speech stand. Most such cases will be resolved by the service deleting the user's material.
In Eckstein v. Melson, state prosecutors raided Mrs. Eckstein's bookstore, and confiscated materials including Penthouse magazine and a novel by John Updike. Mrs. Eckstein was not indicted, but the prosecutor then wrote her a letter saying that if she was ever caught with obscene materials again, she would be charged. Neither the prosecutor or anyone else would tell her what in her bookstore was considered obscene, and a conservative federal appeals court said that some chilling of her (and her customer's) free speech rights was acceptable damage in the battle against obscenity. The Eckstein case, and others like it, set the stage for the extensive chilling effect that the Communications Decency Act will exert over distributors everywhere.