YouTube defeated by Apple co-founder in legal battle over Bitcoin scam

Apple co-founder Steve Wozniak has emerged victorious in his legal battle against YouTube over the use of manipulated videos featuring his likeness in a Bitcoin scam last year. A San Jose appeals court has overturned a previous ruling that absolved YouTube of any responsibility in the matter. According to Bloomberg, the court stated that YouTube cannot utilize a controversial communications statute to avoid liability for a fraudulent scheme that exploited Wozniak’s popularity through a manipulated video. This latest decision allows Wozniak to proceed with his lawsuit against the video streaming platform and potentially opens the door for a revision of the federal law that shields platforms like YouTube from liability associated with posted videos.
In 2020, Wozniak, along with 17 others including Bill Gates, Elon Musk, and Michael Dell, filed a lawsuit against YouTube and its parent company, Google, after manipulated videos promoting a fake scam went viral on the platform. These videos included additional text and images promising free Bitcoin (BTC), and viewers were instructed to send Bitcoin to a specific address in order to receive double the amount.
The recent appeals court ruling is considered a significant victory for Wozniak and others involved, as a judge in Santa Clara County Superior Court had previously ruled in 2022 that the companies were protected from liability under Section 230 of the Communications Decency Act.
The appeals court judges noted that popular YouTube channels are frequently hacked to facilitate scams, and Google and YouTube are complicit in these scams by granting verification badges to compromised channels. Furthermore, the platform failed to remove these badges when the channels began posting scam videos, and one channel even received a verification badge during the scam itself. As a result, the appeals court concluded that companies may not be shielded by Section 230 immunity if they contributed to the scam through the verification process.
Wozniak’s lawyer, Joe Cotchett, emphasized that this verdict underscores the need for social media platforms like Google and YouTube to take responsibility for their actions and not rely on Section 230 as a complete defense for their behavior.