625 F.Supp.3d 971
N.D. Cal.2022Background
- Plaintiffs sued Apple, Google, and Meta (Facebook) on behalf of consumers and putative classes, alleging their app stores and platforms distribute "social casino" apps that function as illegal gambling by selling virtual chips that cannot be cashed out.
- The complaints allege platforms (1) curate/feature/promote social casino apps, (2) process in‑app payments and take a ~30% cut, and (3) share targeting/data and ad tools with developers to identify and monetize high‑spending users.
- Plaintiffs pursue state consumer‑protection, unjust enrichment, gambling‑law, and RICO claims against the Platforms themselves (not just the game developers).
- Defendants moved to dismiss under Section 230(c)(1) of the Communications Decency Act, claiming immunity from suits that treat them as publishers/speakers of third‑party content.
- The court applied Ninth Circuit §230 precedent (Barnes/Roommates/Carafano/Batzel/Dyroff/Gonzalez/etc.) and concluded: it dismissed claims based on platforms’ editorial/recommendation/promotional functions and on data‑driven targeting, but denied dismissal of the revenue‑based claims premised on the Platforms’ sales/payment processing of virtual chips.
- The court certified the §230 ruling for interlocutory appeal under 28 U.S.C. §1292(b) and stayed proceedings pending the Ninth Circuit’s decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §230 bars claims that platforms promoted/categorized/featured social‑casino apps (editorial/recommendation activity) | Platforms used algorithms, featuring, and promotions to induce users to install/play illegal apps, so they should be liable | Promotion/recommendation decisions are classic editorial/publisher functions protected by §230 | Dismissed — §230 bars these claims |
| Whether §230 bars claims based on Platforms selling/processing virtual chips (revenue‑based/bookmaking theory) | Platforms act as the ‘‘bookie’’ by selling chips, processing payments, taking a cut, and enabling illegal gambling — this is the Platforms’ own unlawful conduct | §230 immunizes platforms for third‑party content, not their own independent illegal acts | Not barred — claim survives; §230 does not shield Platforms from liability for the alleged unlawful sale/processing |
| Whether §230 bars claims that Platforms materially developed apps by sharing data/targeted ads (data‑sharing = co‑developer) | Platforms provided big data, designed ads, and collaborated with developers to create addictive games, making them co‑developers | Data/sharing, ad tools, and algorithmic recommendations are neutral editorial/technical services protected by §230 | Dismissed — court treats data‑sharing/targeting as editorial/neutral and immunized by §230 |
| Whether interlocutory appeal of the §230 ruling should be certified | Plaintiffs: want merits to proceed; opposing delay (implicit) | Defendants (and court): controlling §230 question presents substantial grounds for disagreement; immediate appeal would materially advance resolution | Certified sua sponte under §1292(b); case stayed pending Ninth Circuit decision |
Key Cases Cited
- Barnes v. Yahoo!, Inc., 570 F.3d 1096 (9th Cir. 2009) (articulates three‑prong test for §230 and distinguishes publisher duties from other duties)
- Fair Hous. Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008) (platform can lose §230 immunity if it materially contributes to unlawful content by eliciting it)
- Gonzalez v. Google LLC, 2 F.4th 871 (9th Cir. 2021) (algorithmic recommendations protected by §230; but revenue‑sharing/material support theories may be outside §230)
- Doe v. Internet Brands, Inc., 824 F.3d 846 (9th Cir. 2016) (§230 does not bar claims that do not treat defendant as publisher, e.g., negligent failure to warn based on independent knowledge)
- HomeAway.com, Inc. v. City of Santa Monica, 918 F.3d 676 (9th Cir. 2019) (§230 immunity does not automatically apply where a duty does not require monitoring third‑party content; focus on what an order would actually require)
- Dyroff v. Ultimate Software Grp., Inc., 934 F.3d 1093 (9th Cir. 2019) (algorithmic recommendations and notifications that do not materially contribute to illegality are §230‑protected)
- Carafano v. Metrosplash.com, Inc., 339 F.3d 1119 (9th Cir. 2003) (neutral tools that facilitate user content do not make a platform an information content provider)
- Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003) (minor editorial changes and selection alone do not make a site a content developer for §230 purposes)
- Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Cir. 2007) (broad discussion of §230 immunity for service providers)