By Jonathan Stempel
(Reuters) -A U.S. appeals court on Friday left intact a key part of an injunction blocking a California law aimed at protecting children from online content that could harm them mentally or physically.
The 9th U.S. Circuit Court of Appeals in San Francisco said NetChoice, a trade group for companies doing business online, would likely show that the California Age-Appropriate Design Code Act violated its members’ free speech rights under the First Amendment of the constitution.
California required companies to prepare “Data Protection Impact Assessment” reports examining whether their online platforms could harm children, for example through videos promoting self-harm, and to take steps to reduce the risks before launch.
Companies also had to estimate children’s ages and configure privacy settings for them, or else provide high settings for everyone.
Civil penalties can be up to $2,500 per child for each negligent violation, or $7,500 per child for each intentional 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 ” of what California deemed harmful.
Circuit Judge Milan Smith wrote for a three-judge panel that the first requirement was likely unconstitutional because California had less restrictive ways to protect children. He said the state could improve education for children and parents about online dangers, give companies incentives to filter or block content, or rely on enforcing criminal law rules.
Requiring “the forced creation and disclosure of highly subjective opinions about content-related harm to children is unnecessary to fostering a proactive environment in which companies, the state and the general public work to protect the safety of children online,” Smith wrote .
The 9th Circuit reversed the remainder of U.S. District Judge Beth Labson Freeman’s September 2023 preliminary injunction, including regarding the law’s restrictions on the collection and sale of geolocation information and other data from children.
The court said Freeman had failed to properly assess whether the law could survive without the unconstitutional provisions, and sent the case back to her.
California modeled its law after a similar law in the United Kingdom. Governor Gavin Newsom signed the state law into law in September 2022, and it would 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 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, 9th US Circuit Court of Appeals, No. 23-2969.
