If you own a business that allows posts—classified ads—by third parties who are selling goods or services, how responsible are you for what those sellers are doing if they are offering something illegal, like drugs or prostitution services? That's a question with no bright line answer, and it's been the focus of numerous lawsuits and failed prosecution bids against companies like Backpage.com, which is accused of profiting from sex trafficking. Here's what you should know.

Federal law does offer you some significant protections.

The argument used by prosecutors and civil plaintiffs who want to hold websites like Backpage responsible for third-party posts runs like this: its revenue is coming, at least in part, from illegal transactions and its owner/operators are aware that there are illegal transactions happening in the form of sex trafficking, drug sales, or other prohibited commerce. 

However, federal law makes web service companies immune from liability for crimes committed by its users. Attempts by prosecutors to hold the owner/operators accountable for pimping have previously failed—although the prosecutor in California is making another attempt based on new cases. So have attempts to sue the company and hold it liable in civil court for personal injuries suffered by women that claim that the site facilitated their descent into forced prostitution.

If the federal laws didn't protect web service companies from third-party actions, companies like Facebook would be liable for hate crimes if someone gets on their page and makes racist threats against a neighbor or if two people work out a drug deal in the comments section below the photo a marijuana leaf. A lack of immunity from prosecution would have a devastating ability on sites like that to even exist.

You should still take appropriate precautions.

While it may be impossible to monitor or screen every post that appears on your site, you may want to make use of available technology that can at least attempt to shut down obvious illegal activity. The more proactive you are about stopping illegal activity, the less the likelihood that you'll face scrutiny over it when it does happen. That can save you the significant expense of having to hire attorneys to fight criminal charges or defend your company in civil court over the issues.

For example, there is software available that will stop posts that use certain keywords of a sexual nature or obvious references to drugs by their street names.

You may also want to employ some form of random monitoring, at least, if it isn't possible to monitor or review every post. Random checks can allow you to demonstrate your willingness to boot someone obviously promoting something illegal from your platform. You may also want to consider setting up a system that allows other users to "flag" illegal content, similar to the way that Facebook and Craigslist do. Flags can trigger a monitor, who can then look at the post and determine if it does seem to be offering illegal services before deleting it and banning the user, if necessary.

For more information on how to protect yourself from the specter of lawsuits and prosecution based on third-party content, contact a commercial litigation attorney like The Law Office of Vernon Nelson in your area.