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In a recent development, technology behemoths Apple, Meta, and Google have disputed a 2022 decision by U.S. District Judge Edward Davila of San Jose, California.
The tech giants caution the 9th U.S. Circuit Court of Appeals that the entire digital economy could be jeopardized if online platforms are held accountable for processing user purchases of virtual chips in casino game applications.
The Controversial Ruling
The contentious ruling pertains to Section 230 of the Communications Decency Act, which provides online publishers with immunity from liability for third-party content.
Judge Davila’s interpretation suggested that this immunity does not shield the platforms from allegations that they acted as “betting agents” by enabling the acquisition of virtual chips for use in online casino games.
The Ongoing Legal Battle
The casino app cases have sparked cross-appeals. Apple, Meta (previously known as Facebook), and Google are contesting the decision that they can be held responsible for processing virtual chip payments.
Conversely, the plaintiffs’ attorneys from the law firm Edelson have lodged cross-appeals over their dismissed claims.
The Tech Giants’ Argument
The platforms contend that Judge Davila misconstrued a crucial precedent established by the 9th Circuit in HomeAway.com Inc v. City of Santa Monica. They expressed apprehension that if his decision is not reversed, the repercussions could be extensive.
The platforms maintain that websites offering in-app purchases, like Spotify and Substack, could also be liable whenever a plaintiff alleges harm from an illegal product.
Concerns Raised by Apple, Meta, and Google
Apple’s legal team at Weil, Gotshal & Manges voiced concerns about the theory proposed by the casino app plaintiffs, describing it as “boundless.” Meta and Google echoed these sentiments, cautioning that “astute attorneys” could leverage Davila’s logic to restructure claims that would otherwise be barred under Section 230.
The platforms insist that they did not create the virtual chips sold by the casino apps or the apps themselves. They argue that they merely provided payment processing services as a publisher, which should be safeguarded under Section 230.
The Future of the Case
The platforms emphasize that the casino app cases differ fundamentally from the conduct in question in the HomeAway case, where the 9th Circuit ruled that Section 230 did not pre-empt a local law prohibiting websites from accepting booking fees for certain short-term housing rentals.
The appeals process is currently underway and is anticipated to wrap up in December 2023. The result will bear significant implications for the digital economy and the interpretation of Section 230 protections for online casino platforms.
