Social Media – Page 2 – Attorney Evan Brown

November 21, 2024 Litigation, Section 230, Social Media

Disabled veteran’s $77 billion lawsuit against Amazon dismissed

A disabled Army veteran sued Amazon alleging “cyberstalking” and “cyberbullying” on its gaming platform, New World. Plaintiff claimed Amazon allowed other players and employees to engage in harassment, culminating in his being banned from the platform after over 10,000 hours and $1,700 of investment. Plaintiff sought $7 billion in compensatory damages and $70 billion in punitive damages, asserting claims for intentional infliction of emotional distress, gross negligence, and unfair business practices. Plaintiff also filed motions for a preliminary injunction to reinstate his gaming account and to remand the case to state court.

The court, however, dismissed the case. It granted plaintiff in forma pauperis status, allowing him to proceed without paying court fees, but ruled that his complaint failed to state any claim upon which relief could be granted. The court found no grounds for allowing plaintiff to amend the complaint, as any amendment would be futile.

The court dismissed the case on several legal principles. First, it found that Amazon was immune from liability under the Communications Decency Act at 47 U.S.C. §230 for any content posted by third-party users on the New World platform. Section 230 protects providers of interactive computer services from being treated as publishers or speakers of user-generated content, even if they moderate or fail to moderate that content.

Second, plaintiff’s claims about Amazon employees’ conduct were legally insufficient. His allegations, such as complaints about bad customer service and being banned from the platform, failed to meet the standard for intentional infliction of emotional distress, which requires conduct so outrageous it exceeds all bounds tolerated in a civilized society. Similarly, plaintiff’s gross negligence claims did not demonstrate any extreme departure from reasonable conduct.

Finally, in the court’s view, plaintiff’s claim under California’s Unfair Competition Law (UCL) lacked the necessary specificity. The court found that poor customer service and banning a user from a platform did not constitute unlawful, unfair, or fraudulent business practices under the UCL.

Three Reasons Why This Case Matters

Clarifies Section 230 Protections: The case reinforces the broad immunity granted to online platforms for third-party content under Section 230, even when moderation decisions are involved.
Defines the Limits of Tort Law in Online Interactions: It highlights the high bar plaintiffs must meet to succeed on claims such as intentional infliction of emotional distress and gross negligence in digital contexts.
Sets Guidance for Gaming Platform Disputes: The decision underscores the limited liability of companies for banning users or providing subpar customer support, offering guidance for similar lawsuits.

Haymore v. Amazon.com, Inc., 2024 WL 4825253 (E.D. Cal., Nov. 19, 2024)

November 15, 2024 Antitrust, Social Media

Meta faces antitrust trial: FTC’s case against Instagram and WhatsApp acquisitions moves forward

The Federal Trade Commission (FTC) is taking Facebook’s parent company, Meta Platforms, to task over allegations that Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were anticompetitive. A recent ruling in the case allowed the FTC’s key claims to proceed, marking a significant step in the government’s effort to curtail what it alleges is Meta’s illegal monopoly over personal social networking (PSN) services. While some parts of the case were dismissed, the trial will focus on whether Meta’s past actions stifled competition and harmed consumers.

The FTC’s claims: Crushing competition through acquisitions

The FTC contended that Meta acted unlawfully to maintain its dominance in social networking by acquiring Instagram in 2012 and WhatsApp in 2014 to neutralize emerging competition. According to the agency, Instagram’s rapid rise as a mobile-first photo-sharing platform posed a direct threat to Meta’s efforts to establish a strong presence in the mobile space, where its applications were underperforming. WhatsApp, the FTC argued, was a leader in mobile messaging and had potential to expand into personal social networking, making it another significant competitive threat. The FTC alleged that Meta purchased these companies not to innovate but to eliminate rivals and consolidate its monopoly.

The case reached this stage after Meta filed a motion for summary judgment, seeking to have the case dismissed without trial. Meta argued that the FTC’s claims lacked sufficient evidence to support its allegations and that the acquisitions benefited consumers and competition. The court denied Meta’s motion in large part, finding that substantial factual disputes existed about whether the acquisitions were anticompetitive. The court determined that the FTC had presented enough evidence to show that Instagram and WhatsApp were either actual or nascent competitors when acquired.

The court’s analysis highlighted internal Meta documents and statements from CEO Mark Zuckerberg as particularly persuasive. These documents revealed that Instagram’s growth was a source of concern at Meta and that WhatsApp’s trajectory as a mobile messaging service could have positioned it as a future competitor. Based on this evidence, the court ruled that the FTC’s claims about the acquisitions merited a trial to determine whether they violated antitrust laws.

However, the court dismissed another FTC claim alleging that Meta unlawfully restricted third-party app developers’ access to its platform unless they agreed not to compete with Facebook’s core services. The court found that this specific allegation lacked sufficient evidence to proceed, narrowing the scope of the trial to focus on the acquisitions of Instagram and WhatsApp.

Meta’s defenses and their limitations

Meta of course pushed back against the FTC’s case, arguing that its acquisitions ultimately benefited consumers and competition. It claimed Instagram and WhatsApp have thrived under Meta’s ownership due to investments in infrastructure, innovation, and features that the platforms could not have achieved independently. Meta also contended that the FTC’s definition of the market for personal social networking services was too narrow, ignoring competition from platforms such as TikTok, YouTube, LinkedIn, and X.

However, the court rejected some of Meta’s defenses outright. For example, Meta was barred from arguing that its acquisition of WhatsApp was justified by the need to strengthen its position against Apple and Google. The court found this rationale irrelevant to the antitrust claims and insufficient as a defense. Meta’s arguments about broader market competition will be tested at trial, but the court found enough evidence to support the FTC’s narrower focus on personal social networking services.

Three Reasons Why This Case Matters:

Defining Market Boundaries: The case could set new standards for how courts define markets in the tech industry, particularly when dealing with overlapping functionalities of platforms such as social media and messaging apps.
Reining in Big Tech: A trial outcome in favor of the FTC could embolden regulators to pursue other tech giants and challenge long-standing business practices.
Consumer Protection: The case highlights the tension between innovation and market power, raising questions about whether tech consolidation truly benefits consumers or stifles competition.

Case Citation

Federal Trade Commission v. Meta Platforms, Inc., Slip Copy, 2024 WL 4772423 (D.D.C. Nov. 13, 2024).

September 5, 2024 First Amendment, Social Media

X gets Ninth Circuit win in case over California’s content moderation law

X sued the California attorney general, challenging Assembly Bill 587 (AB 587) – a law that required large social media companies to submit semiannual reports detailing their terms of service and content moderation policies, as well as their practices for handling specific types of content such as hate speech and misinformation. X claimed that this law violated the First Amendment, was preempted by the federal Communications Decency Act, and infringed upon the Dormant Commerce Clause.

Plaintiff sought a preliminary injunction to prevent the government from enforcing AB 587 while the case was pending. Specifically, it argued that being forced to comply with the reporting requirements would compel speech in violation of the First Amendment. Plaintiff asserted that AB 587’s requirement to disclose how it defined and regulated certain categories of content compelled speech about contentious issues, infringing on its First Amendment rights.

The district court denied plaintiff’s motion for a preliminary injunction. It found that the reporting requirements were commercial in nature and that they survived under a lower level of scrutiny applied to commercial speech regulations. Plaintiff sought review with the Ninth Circuit.

On review, the Ninth Circuit reversed the district court’s denial and granted the preliminary injunction. The court found that the reporting requirements compelled non-commercial speech and were thus subject to strict scrutiny under the First Amendment—a much higher standard. Under strict scrutiny, a law is presumed unconstitutional unless the government can show it is narrowly tailored to serve a compelling state interest. The court reasoned that plaintiff was likely to succeed on its claim that AB 587 violated the First Amendment because the law was not narrowly tailored. Less restrictive alternatives could have achieved the government’s goal of promoting transparency in social media content moderation without compelling companies to disclose their opinions on sensitive and contentious categories of speech.

The appellate court held that plaintiff would likely suffer irreparable harm if the law was enforced, as the compelled speech would infringe upon the platform’s First Amendment rights. Furthermore, the court found that the balance of equities and public interest supported granting the preliminary injunction because preventing potential constitutional violations was deemed more important than the government’s interest in transparency. Therefore, the court reversed and remanded the case, instructing the district court to enter a preliminary injunction consistent with its opinion.

X Corp. v. Bonta, 2024 WL 4033063 (9th Cir. September 4, 2024)

August 31, 2024 Copyright, Social Media

Court blocks part of Texas law targeting social media content

Two trade associations – the Computer & Communications Industry Association and NetChoice, LLC sued the Attorney General of Texas over a Texas law called House Bill 18 (HB 18), which was designed to regulate social media websites. Plaintiffs, who represented major technology companies such as Google, Meta and X argued that the law violated the First Amendment and other legal protections. They asked the court for a preliminary injunction to stop the law from being enforced while the case continued.

Plaintiffs challenged several key parts of HB 18. Among other things, law required social media companies to verify users’ ages, give parents control over their children’s accounts, and block minors from viewing harmful content. Such content included anything that promoted suicide, self-harm, substance abuse, and other dangerous behaviors. Plaintiffs believed that the law unfairly restricted free speech and would force companies to over-censor online content to avoid penalties. Additionally, they claimed the law was vague, leaving companies confused about how to comply.

Defendant argued that the law was necessary to protect children from harmful content online. He asserted that social media companies were failing to protect minors and that the state had a compelling interest in stepping in. He also argued that plaintiffs were exaggerating the law’s impact on free speech and that the law was clear enough for companies to follow.

The court agreed with plaintiffs on some points but not all. It granted plaintiffs a partial preliminary injunction, meaning parts of the law were blocked from being enforced. Specifically, the court found that the law’s “monitoring-and-filtering” requirements were unconstitutional. These provisions forced social media companies to filter out harmful content for minors, which the court said was too broad and vague to survive legal scrutiny. The court also noted that these requirements violated the First Amendment by regulating speech based on its content. But the court allowed other parts of the law, such as parental control tools and data privacy protections, to remain in place, as they did not give rise to the same free speech issues.

Three reasons why this case matters:

Free Speech Online: This case highlights ongoing debates about how far the government can go in regulating content on social media without infringing on First Amendment rights.
Children’s Safety: While protecting children online is a major concern, the court’s ruling shows the difficulty in balancing safety with the rights of companies and users.
Technology Lawsuits: As states try to pass more laws regulating tech companies, this case sets an important standard for how courts may handle future legal battles over internet regulation.

Computer & Communications Industry Association v. Paxton, — F.Supp.3d —, 2024 WL 4051786 (W.D. Tex., August 30, 2024)

July 10, 2024 First Amendment, Social Media

Supreme Court weighs in on Texas and Florida social media laws

In a significant case involving the intersection of technology and constitutional law, NetChoice LLC sued Florida and Texas, challenging their social media content-moderation laws. Both states had enacted statutes regulating how platforms such as Facebook and YouTube moderate, organize, and display user-generated content. NetChoice argued that the laws violated the First Amendment by interfering with the platforms’ editorial discretion. It asked the Court to invalidate these laws as unconstitutional.

The Supreme Court reviewed conflicting rulings from two lower courts. The Eleventh Circuit had upheld a preliminary injunction against Florida’s law, finding it likely violated the First Amendment. And the Fifth Circuit had reversed an injunction against the Texas law, reasoning that content moderation did not qualify as protected speech. However, the Supreme Court vacated both decisions, directing the lower courts to reconsider the challenges with a more comprehensive analysis.

The Court explained that content moderation—decisions about which posts to display, prioritize, or suppress—constitutes expressive activity akin to editorial decisions made by newspapers. The Texas and Florida laws, by restricting this activity, directly implicated First Amendment protections. Additionally, the Court noted that these cases involved facial challenges, requiring an evaluation of whether a law’s unconstitutional applications outweigh its constitutional ones. Neither lower court had sufficiently analyzed the laws in this manner.

The Court also addressed a key issue in the Texas law: its prohibition against platforms censoring content based on viewpoint. Texas justified the law as ensuring “viewpoint neutrality,” but the Court found this rationale problematic. Forcing platforms to carry speech they deem objectionable—such as hate speech or misinformation—would alter their expressive choices and violate their First Amendment rights.

Three reasons why this case matters:

Clarifies Free Speech Rights in the Digital Age: The case reinforces that social media platforms have editorial rights similar to traditional media, influencing how future laws may regulate online speech.
Impacts State-Level Regulation: The ruling limits states’ ability to impose viewpoint neutrality mandates on private platforms, shaping the balance of power between governments and tech companies.
Sets a Standard for Facial Challenges: By emphasizing the need to weigh a law’s unconstitutional and constitutional applications, the decision provides guidance for courts evaluating similar cases.

Moody v. Netchoice, et al., 144 S.Ct. 2383 (July 1, 2024)

March 27, 2024 Social Media

Negligence claim against Roblox for minors’ gambling moves forward

Plaintiffs sued defendant Roblox asserting various claims, including under RICO and California unfair competition law. Plaintiffs also claimed that Roblox was negligent by providing a system whereby minors were lured into online gambling.

Roblox moved to dismiss the negligence claim for failure to state a claim upon which relief may be granted. The court denied the motion to dismiss, allowing the negligence claim to move forward.

Roblox’s alleged involvement with online casinos

The gaming platform uses a virtual currency called “Robux” for transactions within its ecosystem. Users can purchase Robux for in-game enhancements and experiences created by developers, who can then convert their earned Robux into real money through Roblox. However, plaintiffs allege that online casinos accept Robux for gambling, thereby targeting minors. These casinos allegedly conduct sham transactions on Roblox to access a minor’s Robux, allowing the minors to gamble. When minors lose Robux in these casinos, the lost currency is converted back into cash, with Roblox allegedly facilitating these transactions and profiting from them. Plaintiffs claim Roblox is fully aware that its services are being exploited to enable illegal gambling activities involving minors in this way.

Why the negligence claim survived

The court observed that under California law, there is a fundamental obligation for entities to act with reasonable care to prevent foreseeable harm. Roblox argued that it was exempt from this duty. But the court rejected this argument, holding that that Roblox did indeed owe a duty to manage its platform responsibly to avoid harm, including by alerting parents about gambling risks.

Colvin v. Roblox Corporation, — F.Supp.3d —, 2024 WL 1268420 (N.D. Cal. March 26, 2024)

See also:

March 14, 2024 First Amendment, Social Media

What does the “bill that could ban TikTok” actually say?

In addition to causing free speech concerns, the bill is troubling in the way it gives unchecked power to the Executive Branch.

Earlier this week the United States House of Representatives passed a bill that is being characterized as one that could ban TikTok. Styled as the Protecting Americans from Foreign Adversary Controlled Applications Act, the text of the bill calls TikTok and its owner ByteDance Ltd. by name and seeks to “protect the national security of the United States from the threat posed by foreign adversary controlled applications.”

What conduct would be prohibited?

The Act would make it unlawful for anyone to “distribute, maintain, or update” a “foreign adversary controlled application” within the United States. The Act specifically prohibits anyone from “carrying out” any such distribution, maintenance or updating via a “marketplace” (e.g., any app store) or by providing hosting services that would enable distribution, maintenance or updating of such an app. Interestingly, the ban does not so much directly prohibit ByteDance from making TikTok available, but would cause entities such as Apple and Google to be liable for making the app available for others to access, maintain and update the app.

What apps would be banned?

There are two ways one could find itself being a “foreign adversary controlled application” and thereby prohibited.

The first is simply by being TikTok or any app provided by ByteDance or its successors.

The second way – and perhaps the more concerning way because of its grant of great power to one person – is by being a “foreign adversary controlled application” that is “determined by the President to present a significant threat to the national security of the United States.” Though the President must first provide the public with notice of such determination and make a report to Congress on the specific national security concerns, there is ultimately no check on the President’s power to make this determination. For example, there is no provision in the statute saying that Congress could override the President’s determination.

Relatively insignificant apps, or apps with no social media component would not be covered by the ban. For example, to be a “covered company” under the statute, the app has to have more than one million monthly users in two of the three months prior to the time the President determines the app should be banned. And the statute specifically says that any site having a “primary purpose” of allowing users to post reviews is exempt from the ban.

When would the ban take effect?

TikTok would be banned 180 days after the date the President signs the bill. For any other app that the President would later decide to be a “foreign adversary controlled application,” it would be banned 180 days after the date the President makes that determination. The date of that determination would be after the public notice period and report to Congress discussed above.

What could TikTok do to avoid being banned?

It could undertake a “qualified divestiture” before the ban takes effect, i.e., within 180 days after the President signs the bill. Here is another point where one may be concerned about the great power given to the Executive Branch. A “qualified divestiture” would be situation in which the owner of the app sells off that portion of the business *and* the President determines two things: (1) that the app is no longer being controlled by a foreign adversary, and (2) there is no “operational relationship” between the United States operations of the company and the old company located in the foreign adversary company. In other words, the app could not avoid the ban by being owned by a United States entity but still share data with the foreign company and have the foreign company handle the algorithm.

What about users who would lose all their data?

The Act provides that the app being prohibited must provide users with “all the available data related to the account of such user,” if the user requests it, prior to the time the app becomes prohibited. That data would include all posts, photos and videos.

What penalties apply for violating the law?

The Attorney General is responsible for enforcing the law. (An individual could not sue and recover damages.) Anyone (most likely an app store) that violates the ban on distributing, maintaining or updating the app would face penalties of $5,000 x the number of users determined to access, maintain or update the app. Those damages could be astronomical – TikTok currently has 170 million users, so the damages would be $850,000,000,000. An app’s failure to provide data portability prior to being banned would cause it to be liable for $500 x the number of affected users.