The deal was forged late Tuesday night between Craigslist and the attorneys general of Illinois, Connecticut and Missouri. In addition, Craigslist will now charge $10 per new ad -- up from $5.
CEO Jim Buckmaster characterized the pact as a compromise between law enforcement, legitimate businesses, users and free speech advocates. "We are optimistic that the new balance struck today will be an acceptable compromise from the perspective of these constituencies, and for the diverse U.S. communities that value and rely upon craigslist," Buckmaster said in a blog post.
Craigslist intended for the erotic services section to house ads for services like phone sex and erotic dancing, but law enforcement authorities have complained for months that many ads are obviously related to prostitution.
Criticism had accelerated in recent weeks, sparked by the murder of masseuse Julissa Brisman. She was allegedly killed last month by a Boston University student who answered an ad she had placed on Craigslist's "erotic services" section.
Despite complaints about prostitution listings, many cyberlawyers said that Craigslist was under no obligation to filter the site because the federal Communications Decency Act provides that sites are immune from liability for unlawful ads posted by users.
Ironically, now that Craigslist has attempted to compromise, the company might be worse off legally than if it had simply ignored the law enforcement authorities' request. That's because a federal appellate court recently ruled that a site that reneges on an agreement to remove certain posts can be held liable for breach of contract -- even if the site had no independent obligation to delete the material. In that case, the 9th Circuit Court of Appeals ruled that Yahoo might be liable for reneging on a promise to delete lewd photos.
While that lawsuit did not involve Craigslist, the principle could apply to the listings site. "That's a risk for Craigslist," said David Ardia, director of the digital rights group Citizen Media Law Project.
"If Craigslist were to simply decide on its own which posts to remove and which to leave up, without making any promises to anyone, that form of moderation wouldn't typically change its protection," Ardia said. But, he added, agreeing to bar posts could create a legal obligation to do so, given the recent ruling in the Yahoo lawsuit.
It's also not clear that prostitution ads will not migrate to other sections of the site, including personal listings. Cara Smith, deputy chief of staff for Illinois Attorney General Lisa Madigan, said the authorities are aware of that possibility. "That's something that we have been and continue to be concerned about," she said. "We will be stepping up our reviews of those other sections."