• by Wendy Davis  @wendyndavis, February 27, 2025

The companies argue in papers filed this week with U.S. District Court Judge Edward Davila in the Northern District of California that Section 230 of the Communications Decency Act immunizes them from liability for the content of apps, including ones that allow people to gamble.

That law broadly protects interactive companies from lawsuits over content posted by third parties.

The arguments come in a battle dating to 2020, when people who said they lost money on virtual slot machines alleged in class-action complaints that Google, Meta and Apple wrongly distributed gaming apps, processed in-app payments for virtual currency, and took a commission on the sale of that currency.

Davila previously ruled that Section 230 covered some of the “theories” in the complaint, but does not apply to claims that restored on the theory that tech platforms profited by processing payments for in-game currency.

The platforms appealed that ruling to the 9th Circuit Court of Appeals, where the dispute drew the attention of the digital rights group Electronic Frontier Foundation, which argued that a ruling against the tech platforms could have “drastic consequences” for app users.

The organization wrote that stripping platforms of immunity because they processed in-app payments would “harm users’ ability to access the breadth of apps and content currently available via the app stores and the internet generally, as platforms would be forced to curtail users’ ability to purchase and access virtual content that has not been vetted for lawfulness to mitigate the companies’ legal risk.”

The 9th Circuit heard arguments in the case, but declined to rule on whether the platforms were protected by Section 230.

Instead, the appellate court returned the case to Davila last May with instructions to issue a more precise decision. The appellate judges noted in the ruling that the complaints against the three companies included more than 120 total claims, and said Davila should decide whether each particular claim could move forward.

In November, Google, Apple and Meta again urged Davila to dismiss the entire case.

“Google did not enter any gambling contracts, retain any gambling losses, win from any gambling game, or deceive plaintiffs about processing payments for them, per their requests,” Google wrote. “Google’s conduct is the same whether an app sells 'chips' for purported gambling or some other form of in-app content related to, for example, cookie-baking, and is unconnected to any subsequent decision a user makes about how to use the third-party content she purchased.”

Apple and Meta filed separate arguments, also urging Davila to throw out the case.

Counsel for the plaintiffs responded last month that the sole purpose of “virtual slot machine apps” is illegal gambling.

“The platforms’ revenue from these apps -- and indeed the entire social casino industry’s business model -- depends on players losing slot machine spins, running out of chips, and then purchasing more chips to continue playing,” the attorneys argued in papers filed last month.

“By brokering the sale of virtual chips and retaining their 30% cut, the Platforms directly participate -- and have a stake in -- illegal gambling: their billion-dollar revenue stream exists only because players purchase new chips after losing spins.”

This week, the three tech companies countered in separate papers that their payment tools don't distinguish between different types of content.

“Section 230 bars every claim because each is based on Apple providing neutral tools,” Apple wrote.

The company added that all of the plaintiffs' claims “fail independently because the complaint nowhere alleges that Apple is involved in gambling -- which allegedly occurs after the virtual chip purchase -- or that Apple received money or property plaintiffs lost from alleged gambling.”

Davila is expected to hear arguments on March 7.