SAN FRANCISCO (Legal Newsline) - A federal appeals court has dissolved portions of an injunction that blocked a California law imposing new regulations on social media and other online companies over their handling of minors' accounts.
San Jose federal judge Beth Labson Freeman last year granted the motion for preliminary injunction by NetChoice, a trade group that represents members like Amazon, Google, Lyft and Meta in litigation challenging new laws around the country.
As lawmakers seek to pass laws that attempt to protect minors from some online activity, NetChoice frequently cites First Amendment concerns. That happened in response to the California Age-Appropriate Design Code Act, enacted in 2022.
Judge Freeman found NetChoice showed a likelihood of success on at least one of its arguments and blocked the entire law, but the U.S. Court of Appeals for the Ninth Circuit last week disagreed.
Though the Ninth Circuit agreed the CAADCA likely violates the First Amendment by making companies opine on and mitigate the risk that children may be exposed to harmful materials online, it ruled that shouldn't block every provision of the law.
Freeman never properly considered the other parts of NetChoice's argument past the one she agreed with, the Ninth Circuit said. The injunction as it pertained to provisions restricting the collection, use and sale of children's data and gathering geolocation information was eliminated.
"We're pleased that the Ninth Circuit reversed the majority of the district court's injunction, which blocked California’s Age-Appropriate Design Code Act from going into effect," state Attorney General Rob Bonta said.
The law requires websites to create a data protection impact assessment identifying every service, product or feature likely to be used by individuals under 18 years old and what detriments to them could follow.
Then the sites create a plan to mitigate or eliminate those risks.
NetChoice alleges in its complaint that the law forces online business to "over-moderate" and restrict information for users. NetChoice specifically alleges that AB 2273 actually harms minors and places "draconian penalties" to online businesses and pressures the companies to "serve as roving censors" to internet speech by requiring them to verify the age of their users.
NetChoice argues in its suit that AB 2273 does not clearly define "material detriment," "harm," or "harmful" content. It further claims that the law's definition of online content that is "likely to be accessed by children" is "vague" and "limitless," and does not clearly name what subject manner is to be edited, particularly as it relates to a site's advertisements.
NetChoice also alleges that age-verification technologies are not reliable in identifying user age and that the law violates the First and Fourteenth amendments while placing "extraordinary" burdens on businesses that would "fundamentally" change the internet.
The case has drawn attention from a considerable amount of groups that filed amicus briefs, like The American Psychological Association, the American Civil Liberties Union, other states and Privacy and First Amendment Law Professors.