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Tech companies facing more and more lawsuits

by | Jun 11, 2021 | business litigation

It seems that nowadays, tech companies face risks from all directions. With claims that companies violated labor laws or breached antitrust laws, many companies in Silicon Valley frequently make national headlines nowadays.

And a recent case could lead to another wave of lawsuits, as well as a new kind of liability for tech companies.

When consumers misuse products, companies are not usually responsible

Companies often face liability claims, but many do not go far since companies cannot be held responsible for consumers misusing products. That is one of the primary reasons why it is critical for companies to:

  • Test products and manage risks effectively
  • Provide appropriate warnings to consumers

Tech companies take these precautions as well, though they have additional protection through Section 230 of the Communication Decency Act. Section 230 is what protects tech companies and online platforms from facing liability for what users post. It’s one of the fundamental laws regulating the internet and social media platforms.

Is a recent case against Snap Inc. a turning point?

The popular app Snapchat is at the center of a controversial and complex case. Plaintiffs state that the design of the app – particularly, one of the apps many filters – encouraged misuse and reckless behavior that led to the death of three boys. The filter in question marks the speed at which users are driving, which led to the fatal high-speed crash.

However, a federal court of appeals determined that the parents of the three boys can sue Snap Inc. – despite Section 230. And according to National Public Radio (NPR), the case against Snap Inc. could:

  • Lead to more cases challenging tech companies and their platforms
  • Set precedents for cases specifically targeting Section 230

Whether or not these particular worries come to fruition, the challenges to tech companies and Section 230 will likely continue. And business owners must be prepared.

What can business owners do?

Tech companies must conduct frequent reviews and upgrades of their products, whether they are apps or gadgets. It is often beneficial to have teams dedicated to identifying potential risks and troubleshooting them proactively.

Additionally, regulations in the tech industry are ever-changing. And California business owners must be ready to change with them to be successful. Business owners must stay on top of these changes, and implement the necessary modifications to mitigate risks.