US court blocks key part of California law on children's online safety

A federal appeals court on Friday (Aug16) upheld a significant portion of an injunction blocking a California law designed to protect children from potentially harmful online content.

The 9th U.S. Circuit Court of Appeals ruled in favour of NetChoice, an industry trade group representing online businesses. The trade group had that the California Age-Appropriate Design Code Act infringed upon its members’ First Amendment rights to free speech.

The court found that NetChoice was likely to prove that the law violated these rights.

The contested law required businesses to prepare "Data Protection Impact Assessment" reports to evaluate whether their online platforms could cause harm to children. This could include content like videos promoting self-harm. The law also mandated that businesses take proactive measures to mitigate such risks before launching their platforms. Additionally, the law required companies to estimate the ages of child users, configure privacy settings accordingly, or default to high privacy settings for all users.

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Violations of the law could result in steep civil penalties, ranging from $2,500 per child for negligent violations to $7,500 per child for intentional violations.

NetChoice, whose members include major tech companies such as Amazon, Google, Meta Platforms (Facebook’s parent company), and Elon Musk's X (formerly Twitter), argued that the law would effectively turn these companies into "roving censors" of content that California might deem harmful.

Circuit Judge Milan Smith, writing for a three-judge panel, stated that the requirement for businesses to create and disclose opinions about content-related harms to children was likely unconstitutional.

“The forced creation and disclosure of highly subjective opinions about content-related harms to children is unnecessary for fostering a proactive environment in which companies, the state, and the general public work to protect children’s safety online,” Smith wrote.

While the appeals court upheld this part of the injunction, it set aside the remainder of the preliminary injunction issued last September by US District Judge Beth Labson Freeman.

California's law, modelled after similar legislation in the United Kingdom, was signed by Governor Gavin Newsom in September 2022. It was originally set to take effect on July 1, 2024.