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Defendants accused of addicting app users

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Judge rejects Section 230 immunity claims

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Apple ( AAPL ), Google, Meta allowed to appeal immediately

By Jonathan Stempel

Sept 30 (Reuters) - A federal judge on Tuesday denied

Apple ( AAPL ), Google and Meta Platforms' ( META ) requests to

dismiss lawsuits claiming they promoted illegal gambling by

hosting and accepting commissions from casino-style apps that

addict users.

U.S. District Judge Edward Davila in San Jose, California,

rejected the companies' main argument that Section 230 of the

federal Communications Decency Act, which protects online

platforms from liability over third-party content, shielded them

from the proposed class actions.

Davila dismissed some claims alleging violations of some

U.S. state laws, but denied motions to dismiss all claims

brought under consumer protection laws except in California.

Google, a unit of Alphabet, had no immediate

comment. Apple ( AAPL ) and Meta did not immediately respond to requests

for comment. The plaintiffs' lawyers did not immediately respond

to similar requests.

Dozens of plaintiffs contended that Apple's ( AAPL ) App Store,

Google's Play Store and Meta's Facebook promoted an "authentic

Vegas-style experience of slot machine gambling" through an

illegal racketeering conspiracy.

By exploiting users, the defendants allegedly triggered

depression, suicidal thoughts and other consequences, while

brokering and collecting 30% commissions - estimated at more

than $2 billion - on transactions they processed, the plaintiffs

added.

The lawsuits seek unspecified compensatory and triple

damages, among other remedies.

JUDGE SAYS ISSUES' IMPORTANCE JUSTIFIES IMMEDIATE APPEALS

In a 37-page decision, Davila found that Apple ( AAPL ), Google and

Meta did not act as "publishers" when processing payments,

undercutting their Section 230 immunity claims.

He called it irrelevant that the companies provided "neutral

tools" to support the apps, and rejected a suggestion that the

plaintiffs' failure to label them "bookies" excused them from

liability.

"The crux of plaintiffs' theory is that defendants

improperly processed payments for social casino apps," Davila

wrote. "It is beside the point whether that activity turns

defendants into bookies or brokers."

Davila said Apple ( AAPL ), Google and Meta may immediately appeal

his decision to the 9th U.S. Circuit Court of Appeals, in part

because of the importance of the Section 230 issues.

That court dismissed earlier appeals in May 2024, saying it

lacked jurisdiction at the time. The litigation against the

Silicon Valley-based defendants began in 2021.

The cases in the U.S. District Court, Northern District of

California, are In re Apple Inc App Store Simulated Casino-Style

Games Litigation, No. 21-md-02985; In re Google Play Store

Simulated Casino-Style Games Litigation, No. 21-md-03001; and In

re Facebook Simulated Casino-Style Games Litigation, No.

21-02777.