The Biden administration says social media companies should not be held liable for other people's content, The Washington Times reported.
However, the Justice Department (DOJ) also cautions that the companies may cross lines when they decide what to promote on their platforms.
The DOJ explained its positions in briefs to the Supreme Court in two cases to be heard next week, The Washington Times reported.
"Clearly, whoever was in charge of deciding positions here had an agenda of splitting the baby," Curt Levey, president of the Committee for Justice, a conservative advocacy nonprofit, told the Times.
"A middle ground also kind of makes sense if you want to give the justices a chance to do something about Big Tech without going all the way."
Both cases involve the Antiterrorism Act of 1990, which gives Americans a right to sue for damages in instances of terrorism.
The cases, brought by relatives of people who died in terrorist attacks for which Islamic State (ISIS) has claimed responsibility, claim the companies should have done more to prevent the growth of ISIS.
The Big Tech companies, including Twitter and YouTube, argue they are protected by Section 230 of the Communications Decency Act, which protects them from liability for content posted by someone.
The DOJ, though, said Section 230 doesn't offer an absolute shield.
"Section 230(c)(1) protects an online platform from claims premised on its dissemination of third-party speech, but the statute does not immunize a platform's other conduct, even if that conduct involves the solicitation or presentation of third-party content," Acting Solicitor General Brian Fletcher wrote.
One case involves Google, parent of video-sharing service YouTube. Relatives of Nohemi Gonzalez, an American killed in the November 2015 terrorist attack in Paris, say YouTube was not diligent enough in removing ISIS-posted content.
The relatives say that in some instances, YouTube actually would "recommend" ISIS videos to users.
YouTube thus "assists ISIS in spreading its message," the Gonzalez family argues.
The other case involves Twitter, Facebook, and Google.
U.S. relatives of Nawras Alassaf, a Jordanian killed when a man went on an ISIS-inspired shooting spree at a nightclub in Istanbul, claims the social media companies abetted ISIS by hosting its content. The relatives also say that the companies, in some cases, earned ad revenue from it.
The Times reported that an appeals court sided with Google in the first case, but ruled against Twitter and allowed the second case to proceed.
The DOJ suggests the Supreme Court keeps Section 230 protections in place but makes clear that a technology company becomes more than a host when it actively seeks to promote content.
"When YouTube presents a user with a video she did not ask to see, it implicitly tells the user that she 'will be interested in' that content 'based on the video and account information and characteristics,'" the solicitor general told the high court.