By Jonathan Stempel
(Reuters) – A U.S. appeals court on Friday upheld a key part of a court order blocking enforcement of a California law aimed at protecting children from online content that could harm them mentally or physically.
The U.S. Court of Appeals for the Ninth Circuit in San Francisco said NetChoice, a trade group for companies that conduct business online, is likely to find that California’s age-appropriate design law violates its members’ free speech rights under the First Amendment.
California requires companies to create “data protection impact assessments” that address whether their online platforms could harm children, such as videos promoting self-harm, and take steps before launch to mitigate the risks.
Companies were also required to estimate the ages of child users and configure privacy settings for them, or provide high settings for everyone.
Civil fines can be up to $2,500 per child for each negligent violation, or $7,500 per child for each willful violation.
NetChoice said the law would turn its 37 members — including Amazon.com (NASDAQ: ), Google (NASDAQ: ), Facebook parent Meta Platforms (NASDAQ: ), Netflix (NASDAQ: ) and Elon Musk’s X — into “roving censors” of anything California deems harmful.
Circuit Judge Milan Smith wrote in his decision for a three-judge panel that the first requirement is probably unconstitutional because California has less restrictive ways to protect children. He said the state could improve education for children and parents about online risks, give companies incentives to filter or block content, or rely on enforcement of its criminal laws.
“Requiring highly subjective opinions about the harms of content to children and their disclosure is unnecessary to fostering a proactive environment in which companies, the state, and the public work to protect children’s safety online,” Smith wrote.
The 9th Circuit Court ruled to overturn the rest of the initial September 2023 injunction issued by U.S. District Judge Beth Labson Freeman, including the law’s restrictions on the collection and sale of children’s geolocation information and other data.
The court said Freeman had not properly assessed whether the law could continue 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 into law in September 2022, and it was scheduled to go into effect on July 1, 2024.
In a statement, Newsom said the appeals court “largely sided” with the state. The governor also urged NetChoice to “drop this reckless lawsuit and uphold the safeguards that protect our children’s safety and privacy.”
“This decision represents a victory for free speech, online security, and California families,” said Chris Marquez, director of the NetChoice Litigation Center.
The case is NetChoice LLC v. Bonta, U.S. Court of Appeals for the Ninth Circuit, No. 23-2969.
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