SAN FRANCISCO—Yesterday, NetChoice filed a brief in Hadona Diep, et al. v. Apple with Chamber of Progress, the Electronic Frontier Foundation and the Software & Information Industry Association in support of Apple. The case involves whether Apple may be held liable for fraud committed by a third party app featured in its App Store.
In September 2021, some users who downloaded “Toast Plus,” a fraudulent third party digital wallet app, filed a lawsuit against Apple, claiming that the company should be held liable for hosting the app in its App Store—rather than suing “Toast Plus” itself for its deceitful business operations. The plaintiffs brought claims under various federal laws against Apple, including the Computer Fraud and Abuse Act as well as under state consumer protection laws.
A lower court granted Apple’s request to dismiss the case, holding that Apple was protected by Section 230. The court also found that the limitation of liability contained in Apple’s terms, which provides that the company is not liable for damages “arising out of or related to use of” third-party apps, was enforceable against plaintiff’s claims stemming from harms caused by third party apps. Now the plaintiffs are appealing that decision to the U.S. Court of Appeals for the Ninth Circuit.
“Users, developers and the broader internet ecosystem will be harmed if app store providers like Apple and other digital distribution services are forced, by the threat of frivolous litigation, to meticulously review all content from third-parties before it is distributed. The result would be fewer options, less competition and the suppression of marginalized voices that rely on app stores and third-party services to distribute their content,” said Nicole Saad Bembridge, NetChoice Associate Director of Litigation. “Section 230 was passed to prevent the necessity of pre-publication review. We ask the Court to affirm to ensure Section 230’s critical protections remain intact.”
In our brief, we ask the court to affirm the lower court’s judgment and dismiss this case. We make three key points:
- Section 230 protects app stores from liability arising from the publication of third-party content unless a legally cognizable duty is implicated, and no such duty exists here;
- Plaintiffs’ actual theory of liability is a challenge to Apple’s editorial decisions and would require active monitoring and removal of all apps in the app store; and
- Affirming Section 230’s essential protections for app store providers will benefit internet users and app developers, especially marginalized speakers and audiences expressing alternative viewpoints.
You can read NetChoice’s brief with Chamber of Progress, the Electronic Frontier Foundation and the Software & Information Industry Association here.
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