The Florida state Supreme Court has ruled America Online cannot be held responsible for child-pornography exchanged in its chatrooms.
The court said the Communications Decency Act gives Internet service providers immunity from prosecution for illegal information disseminated by users.
The ruling came in a lawsuit filed by a Florida woman whose 11-year-old son appeared in a videotape sold by one AOL user to another.
The mother alleged AOL violated Florida criminal law prohibiting the distribution of pornography and was negligent by not knowing one of its subscribers was a seller of child-pornography.
Mr Richard Lee Russell, a teacher from a West Palm Beach suburb admitted he used AOL to meet other paedophiles and sold the videotape to an Arizona man he "met" on AOL.
The boy's mother sued AOL and Russell. Russel pleaded guilty to federal charges in 1995 and is serving a 14-year prison term.
Despite reaching a narrow majority decision the panel of judges expressed disquiet over the federal Act giving Internet service providers immunity.
Justice Fred R Lewis said the ruling "flies in the face of the very purpose of the Communications Decency Act".
He said the court's interpretation "provides a foundation for far-ranging forms of illegal conduct".
PA