Tech Lobby Sues California Over New Minor-Focused Internet Privacy Law

Non-profit NetChoice LLC has sued California Attorney General Rob Bonta over a law passed earlier this year which it claims impermissibly curbs internet companies’ constitutionally-protected rights. The lawsuit asserts that the California Age-Appropriate Design Code Act masquerades as a privacy regulation aiming to protect minors while in reality, it harms them, the internet, and internet industry players of all sizes.

The bill, signed into law in September, goes into effect July 1, 2024. It will, in addition to imposing an age verification requirement, mandate that businesses which provide online services or products likely to be accessed by children configure all default privacy settings to offer a high level of privacy, unless a business can demonstrate a compelling reason not to.

Enforcement by the state’s attorney general can result in penalties of a maximum of $2,500 per impacted child for negligent violations or $7,500 per child for intentional violations.

NetChoice, which self-describes as “a national trade association of online businesses that share the goal of promoting free speech and free enterprise on the Internet,” represents member companies that will be impacted by the law, the suit says. 

NetChoice criticizes the law as a content-based restriction on speech that will subject internet companies to state supervision and “hobble a free and open resource for ‘exploring the vast realms of human thought and knowledge.’” The plaintiff claims that the law has subjective language that will result in uneven enforcement, exposing providers of all sizes to its “crushing” penalties if they fail to enforce content moderation standards to the attorney general’s satisfaction.

The trade association further asserts that the law actually harms those it seeks to protect because online businesses will over moderate as a result. The complaint adds that the age verification requirement will “frustrate anonymous and casual browsing, magnify privacy concerns, and wrest control over minors’ online activities from parents and their children.”

The suit states four claims for relief under the United States Constitution, arguing that the law imposes unreasonable burdens on speech, interstate commerce, and privacy rights, and is impermissibly vague. Additionally, it states two claims for relief under the Children’s Online Privacy Protection Act and Section 230 of the Communications Decency Act, laws which NetChoice claims preempt California’s regulation.

NetChoice seeks an injunction halting the law’s enforcement as well as invalidation. The plaintiff, represented by Davis Wright Tremaine LLP, has also challenged Florida and Texas laws curbing social media platforms’ ability to censor users.