• by Wendy Davis , 4 hours ago

The tech group NetChoice can proceed with a lawsuit that seeks to block enforcement of Maryland's Kids Code -- which requires online businesses to assess whether new features could harm users under 18, and restricts online businesses' ability to collect data from minors -- a federal judge has ruled.

NetChoice sued earlier this year to strike down the statute, arguing it "imposes an unconstitutional and unlawful regime that will fundamentally reshape how websites speak to their users and how Americans access information online."

"Online user data is akin both to the ink and paper necessary to publish newspapers and the subscriber addresses necessary to distribute them," NetChoice asserted in its lawsuit.

In an opinion issued Monday, U.S. District Court Judge Richard Bennett in Baltimore wrote that NetChoice can move forward because it has "set forth plausible claims."

Bennett added that he has not yet made any decisions about the lawsuit's merits.

NetChoice's complaint largely centered on a claim that the law violates its members First Amendment rights.

The organization, which counts Google, Meta, Snap and other large tech companies as members, specifically alleged that tech companies require users' data in order to "create, disseminate, and facilitate speech."

The group elaborated that the restriction on data collection -- including a prohibition on processing data that isn't needed to provide services minors are engaging with -- would impair businesses' ability to curate content and make recommendations.

“Websites like online news services or sports services employ information they collect from users to present those users with the articles and other content that users might find most useful,” the group wrote. “For instance, a sports website may prioritize content about individuals’ favorite sports teams. And a news service may highlight areas of particular interest for individual users.”

NetChoice additionally argued that a key provision of the statute is too vague to be constitutional. That provision, slated to take effect next year, would require online businesses to evaluate whether a new product likely to be accessed by children is “designed in a manner consistent with the best interests of children.”

The organization said the best-interests-of-children standard is "inherently subjective," and hinges on content.

“This vague mandate will force websites to over-restrict speech and self-censor to avoid crushing penalties,” the group said in its complaint, noting that the law provides for fines of up to $7,500 per minor for each violation.

Maryland Attorney General Anthony Brown urged Bennett to dismiss the lawsuit at an early stage, arguing that the law doesn't regulate lawful speech.

"The Kids Code is a consumer protection law that regulates the conduct of companies that engage in commercial endeavors," the attorney general claimed. "Specifically, it prohibits covered entities from collecting and using data from children in a way that could lead to reasonably foreseeable, severe or material harm to children; it restricts collection of data from children; and it and requires entities to review the design and data practices of their products to ensure that those products are not going to seriously harm children."

Bennett rejected that argument for now, ruling that NetChoice's allegations, if proven true, could show that the law "burdens protected speech or expression such that First Amendment scrutiny applies."

Brown also contended that NetChoice isn't in a position to challenge the law on behalf of its members. Instead, according to Brown, only individual NetChoice members are in a position to challenge the law.

Bennett rejected that contention as well, ruling that NetChoice's allegations, if proven true, could show that the law "will burden its members’ provision of curated content in a manner that may abridge or limit users’ access to protected speech."