By Jonathan Stempel
(Reuters) – A U.S. appeals court on Friday left in place a key part of a court order blocking a California law that was intended to protect children from online content that could harm them emotionally or physically.
The 9th U.S. Circuit Court of Appeals in San Francisco has ruled that NetChoice, a trade group for online businesses, has a good chance of arguing that California’s age-appropriate design code violates its members’ First Amendment free speech rights.
California has required companies to produce “Data Protection Impact Assessment” reports to assess whether their online platforms could harm children, such as through videos promoting self-harm, and to take steps before they launch to mitigate the risk.
Companies were also required to estimate the age of children using the app and configure privacy settings for them or ensure all users have high settings.
Civil fines can range up to $2,500 for each instance of negligent conduct toward a child or $7,500 for each intentional conduct.
NetChoice said the bill would make 37 of its members, including Amazon.com (NASDAQ:), Google (NASDAQ:), Facebook parent Meta Platforms (NASDAQ:), Netflix (NASDAQ:) and Elon Musk’s X, “roaming censors” of anything California deems harmful.
District Judge Milan Smith wrote for a three-judge panel that the first requirement is likely unconstitutional because California has less restrictive ways to protect children. He said the state could do more to educate children and parents about online dangers, give companies incentives to filter or block content or rely on enforcement of its criminal laws.
Requiring “the forced creation and disclosure of highly subjective opinions about the harms of children’s content is unnecessary to fostering a proactive environment in which companies, the state, and society at large work to protect children’s safety online,” Smith wrote.
The 9th District Court vacated the remainder of a September 2023 ephemeral injunction issued by District Judge Beth Labson Freeman, including those restricting the law from collecting and selling children’s geolocation and other data.
The court found that Freeman had failed to properly assess whether the law could survive without the unconstitutional provisions and remanded the case to her.
California modeled its law on a similar one in the United Kingdom. Gov. Gavin Newsom signed the state law in September 2022, and it was set to go into effect July 1, 2024.
In a statement, Newsom said the appeals court “largely sided” with the state. The governor also called on NetChoice to “dismiss this reckless lawsuit and support safeguards that protect the safety and privacy of our children.”
Chris Marchese, director of the NetChoice Litigation Center, called the decision “a victory for free speech, online safety and California families.”
The case is NetChoice LLC v Bonta, U.S. Court of Appeals for the 9th Circuit, No. 23-2969.
