Background
The Texas Legislature enacted Senate Bill two thousand four hundred twenty, known as the App Store Accountability Act, to help parents direct and supervise children’s downloads of apps and in-app purchases. The Act requires age verification, parental consent, and age rating and content display. The district court issued universal preliminary injunctions against the Act after applying strict scrutiny. The State of Texas sought a stay pending appeal.
The court’s reasoning
The court reasoned that app store transactions are commercial in nature because they propose a commercial transaction, whether through monetary payment or the exchange of user data. Consequently, the court applied intermediate scrutiny under Central Hudson Gas and Electric Corporation versus Public Service Commission of New York. The court found the Act likely advances important governmental interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary. The court also noted the district court likely erred in deeming exceptions to parental consent as coverage definitions and in finding the statute unconstitutionally vague. Finally, the court held that a universal injunction likely falls outside the bounds of a federal court’s equitable authority.
App store transactions are commercial in nature.
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What it means going forward
The stay allows the App Store Accountability Act to remain in effect while the appeal proceeds, preventing the district court’s universal injunction from halting enforcement against the general public.