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California: Court rules that California Age-Appropriate Design Code likely violates First Amendment

On September 18, 2023, the U.S. State District Court for the Northern District of California San Jose Division granted a preliminary injunction to NetChoice LLC on the basis that provisions of the California Age-Appropriate Design Code Act likely violate the First Amendment of the United States Constitution.

Background to the case

NetChoice challenged the enforceability of the Act and requested a preliminary injunction based on its claims that the Act violates the First Amendment and the dormant Commerce Clause of the United States Constitution. Furthermore, NetChoice asserted that the Act is preempted by both the Children's Online Privacy Protection Act (COPPA) and Section 230 of the Communications Decency Act.

Findings of the Court

The Court found that NetChoice had shown that it is likely to succeed on the merits of its argument that provisions of the Act likely violate the First Amendment. In particular, the Court explained that several provisions are likely to trigger the scrutiny of the First Amendment, namely, the provisions on:  

  • Data Protection Impact assessments (DPIAs);
  • estimating the age of child users;
  • high default privacy settings;
  • age-appropriate policy language;
  • internal policy enforcement;
  • knowingly harmful use of children's data;
  • profiling children by default;
  • restriction on collecting, selling, sharing, and retaining children's data;
  • unauthorized use of children's personal information; and
  • use of dark patterns.

Outcomes

In light of the above, the Court granted the motion for a preliminary injunction on the basis that NetChoice is likely to succeed in showing that the Act mandates and prohibitions fail commercial speech scrutiny and are therefore invalid.

You can read the Court judgment here

Update: October 19, 2023

AG seeks to overturn preliminary injunction 

On October 18, 2023, the California Attorney General (AG), Rob Bonta, announced the filing of a notice of appeal to overturn the preliminary injunction against the Act.

In this regard, the AG stated that "[T]he district court decision is wrong," adding that the notice of appeal seeks to "[...] defend California's first-in-the-nation children's online safety law [...]."

You can read the press release here.