Court blocks key part of California law on children’s online safety

By Jonathan Stempel

(Reuters) -A federal appeals court on Friday left intact a key part of an injunction blocking a California law meant to shield 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 that do business online, was likely to show that the California Age-Appropriate Design Code Act violated members' First Amendment free speech rights.

California required businesses to create "Data Protection Impact Assessment" reports addressing whether their online platforms could harm children, such as through videos promoting self-harm, and take steps prior to launch to reduce the risks.

Businesses were also required to estimate the ages of child users and configure privacy settings for them, or else provide high settings for everyone.

Civil fines could reach $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, Google, Facebook parent Meta Platforms and Elon Musk's X, formerly Twitter - into "roving censors" of whatever 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 its criminal laws.

Requiring "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.

The appeals court set aside the rest of the preliminary injunction issued last September by U.S. District Judge Beth Labson Freeman in San Francisco, and returned the case to her.

It said Freeman did not properly assess NetChoice's other objections to California's law, or whether the law could survive without the unconstitutional portions.

The office of California Attorney General Rob Bonta, which defended the law, did not immediately respond to requests for comment.

Chris Marchese, director of the NetChoice Litigation Center, called Friday's decision "a victory for free expression, online security and Californian families."

California modeled its law after a similar law in the United Kingdom. Governor Gavin Newsom signed the state law in September 2022. The law was to have taken effect on July 1, 2024.

The case is NetChoice LLC v Bonta, 9th U.S. Circuit Court of Appeals, No. 23-2969.

(Reporting by Jonathan Stempel in New York; Editing by Rod Nickel and Jonathan Oatis)