9th Circuit Partly Upholds Block on Calif. Online Age Safety Code

SAN FRANCISCO—The U.S. Ninth Circuit Court of Appeals ruled last week to partially uphold a preliminary injunction blocking the implementation and enforcement of an age-appropriate design code adopted by the California state legislature that requires tech companies to promote online safety for minors. A panel of judges agreed with a lower federal district court that the law could be used to unconstitutionally regulate speech. NetChoice, a trade group representing large technology companies—such as Meta, X, Google and Etsy—sued Calif. Attorney General Rob Bonta in the U.S. District Court for the Northern District of California asking to block the California Age-Appropriate Design Code Act (AADC). The California state legislature adopted the AADC and Democratic Gov. Gavin Newsom signed the bill into law in September 2022. NetChoice sued in December 2022 and managed to secure a preliminary injunction from a federal district judge that called it facially unconstitutional, and then California appealed. The Ninth Circuit's ruling upholds a block on key provisions in the AADC that could violate First Amendment rights. One provision that is still blocked is the AADC Data Protection Impact Assessment (DPIA) requirement. According to the law, private companies that fall under the purview of the design code must take steps to mitigate risks to minors who might be exposed to potentially harmful materials on the internet through design changes in the user experience and recommendation algorithms. The Ninth Circuit sided with NetChoice by indicating that the requirement to "opine on and mitigate the risk that children may be exposed to harmful or potentially harmful materials online facially violates the First Amendment." Since AADC does this, it reportedly imposes a substantial burden on free speech by inadvertently deputizing the covered business "into serving as censors for the state." NetChoice characterized the rule as forcing companies to act as "roving censors" targeting and restricting speech online that is otherwise protected by the First Amendment. The judges said this is an unlawful compellence of speech that burdens NetChoice's member companies and their users. The court vacated portions of the preliminary injunction that required platforms to take up greater privacy protections for minors that must meet a "high level of privacy" by default for virtually all users. “The Ninth Circuit’s ruling is a victory for free expression, online security, and Californian families,” said Chris Marchese, director of the NetChoice Litigation Center. He added, “The court recognized that California’s government cannot commandeer private businesses to censor lawful content online or to restrict access to it.” Attorney General Bonta and Gov. Newsom also claimed in press statements that they were pleased with the "majority" of the Ninth Circuit's ruling. "Instead of adopting these commonsense protections, NetChoice chose to sue—yet today, the Court largely sided with us," said Newsom.  Bonta added, "The California Department of Justice remains committed to protecting our kids’ privacy and safety from companies that seek to exploit their online experiences for profit.”  First Amendment challenges to California's AADC additionally foreshadow legal fights in other venues dealing with online safety legislation. The Verge pointed to how the federal Kids Online Safety and Privacy Act (KOSPA), formerly KOSA, is struggling to reach the desk of President Joe Biden. Similar to the California Age-Appropriate Design Code Act, KOSPA would place a duty of care on online platforms to design their websites to mitigate minors from being exposed to potentially harmful materials on the internet, like violent and sexually exploitative content. The U.S. Senate passed KOSPA to the House of Representatives, 91-3, but now faces an uncertain future in the Republican-controlled chamber. Organizations like the American Civil Liberties Union have criticized KOSPA and proposals like it as potential violations of the First Amendment.