January 2024 – Page 3 – Attorney Evan Brown

standing

A legal dispute involving Microsoft recently concluded with the dismissal of a class-action lawsuit. Plaintiffs had accused Microsoft of unauthorized data collection through its Edge browser, alleging violation of privacy laws. The court, however, ruled in favor of Microsoft, citing the plaintiffs’ lack of standing under Article III of the Constitution.

The Allegations Against Microsoft

The lawsuit centered on the claim that Microsoft Edge intercepted and sent private user data, including activities in “private” browsing mode, to Microsoft-controlled servers. This data, linked to unique user identifiers, allegedly allowed Microsoft to track users’ internet habits. Plaintiffs argued this was done without consent, breaching the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, and various state laws, and claimed economic injury due to these practices.

Microsoft’s Challenge and the Court’s Decision

Microsoft moved to dismiss the lawsuit, arguing plaintiffs lacked the necessary standing under Article III of the U.S. Constitution. The court agreed, determining the plaintiffs did not meet the required standing criteria.

The core issue was whether the plaintiffs had standing, a fundamental requirement for a case to be heard in a federal court. The constitution requires an actual “case or controversy” for federal courts’ involvement. The court examined whether plaintiffs demonstrated (1) an injury in fact, (2) a direct causation, and (3) a potential remedy through court action.

The 2021 Supreme Court ruling in TransUnion LLC v. Ramirez was key to the outcome in this case. This ruling stressed that not every violation of a statutory right leads to a concrete harm that warrants a federal lawsuit. This court, agreeing with Microsoft, found that the data identified in the complaint was not traditionally considered private. It determined that the collection of browsing data did not closely relate to a harm traditionally actionable in court. The court pointed out that data like browsing history and keystrokes do not carry a reasonable expectation of privacy.

Final Outcome

So the court found that the plaintiffs failed to allege a concrete privacy injury that would fulfill the requirements for Article III standing. The dismissal of this lawsuit highlights the complex challenges in digital privacy litigation and the difficulty plaintiffs face in proving standing in privacy-related legal actions.

Saeedy v. Microsoft Corporation, 2023 WL 8828852 (W.D. Washington, December 21, 2023)

A federal court in California has upheld the constitutionality of the state’s Assembly Bill 587 (AB 587), which mandates social media companies to submit to the state attorney general semi-annual reports detailing their content moderation practices. This decision comes after X filed a lawsuit claiming the law violated the company’s First Amendment rights.

The underlying law

AB 587 requires social media companies to provide detailed accounts of their content moderation policies, particularly addressing issues like hate speech, extremism, disinformation, harassment, and foreign political interference. These “terms of service reports” are to be submitted to the state’s attorney general, aiming to increase transparency in how these platforms manage user content.

X’s challenge

X challenged this law, seeking to prevent its enforcement on the grounds that it was unconstitutional. The court, however, denied their motion for injunctive relief, finding that X failed to demonstrate a likelihood of success on the merits of its constitutional claims.

The court’s decision relied heavily on SCOTUS’s opinion in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985). Under the Zauderer case, for governmentally compelled commercial disclosure to be constitutionally permissible, the information must be purely factual and uncontroversial, not unduly burdensome, and reasonably related to a substantial government interest.

The court’s constitutional analysis

In applying these criteria, the court found that AB 587’s requirements fit within these constitutional boundaries. The reports, while compulsory, do not constitute commercial speech in the traditional sense, as they are not advertisements and carry no direct economic benefit for the social media companies. Despite this, the court followed the rationale of other circuits that have assessed similar requirements for social media disclosures.

The court determined that the content of the reports mandated by AB 587 is purely factual, requiring companies to outline their existing content moderation policies related to specified areas. The statistical data, if provided, represents objective information about the company’s actions. The court also found that the disclosures are uncontroversial, noting that the mere association with contentious topics does not render the reports themselves controversial. We know how controversial and political the regulation of “disinformation” can be.

Addressing the burden of these requirements, the court recognized that while the reporting may be demanding, it is not unjustifiably so under First Amendment considerations. X argued that the law would necessitate significant resources to monitor and report the required metrics. But the court noted that AB 587 does not obligate companies to adopt any specific content categories, nor does it impose burdens on speech itself, a crucial aspect under Zauderer’s analysis.

What this means

The court confirmed that AB 587’s reporting requirements are reasonably related to a substantial government interest. This interest lies in ensuring transparency in social media content moderation practices, enabling consumers to make informed choices about their engagement with news and information on these platforms.

The court’s decision is a significant step in addressing the complexities of regulating social media platforms, balancing the need for transparency with the constitutional rights of these digital entities. As the landscape of digital communication continues to evolve, this case may be a marker for how governments might approach the regulation of social media companies, particularly in the realm of content moderation.

X Corp. v. Bonta, 2023 WL 8948286 (E.D. Cal., December 28, 2023)

Month: January 2024

Microsoft Edge privacy case dismissed for lack of standing