Ninth District Court Makes Far-Ranging Historic Ruling

In a historic decision with far-reaching implications for the free market going forward, the 9th Circuit Court granted Enigma Software's appeal against Malwarebytes, Inc. anti-competitive practices. The case against Malwarebytes involves its attempt to use immunities granted by Section 230 of the Communications Decency Act (CDA) to block other antivirus software in the industry with impunity.

Enigma Software, a technology company that specializes in cybersecurity products, filed suit against Malwarebytes for using its antivirus to improperly blacklist Enigma's SpyHunter security software. The lawsuit was initially dismissed on the premise that Malwarebytes is granted immunity by the CDA to block any product that it wishes to, without any regard for its motives. 

The CDA is a piece of legislation that was passed in 1996 in order to help prevent the spread of obscene material, such as pornography to children, on media outlets like the Internet. In Section 230 of the CDA, also known as the “Good Samaritan” clause, service providers argue they are allowed to block any material they find “unwanted or objectionable." However, there are no clear guidelines or criteria within the Act on what is considered objectionable content.

The broad wording of the CDA has effectively allowed Malwarebytes to block competitors as PUPs (Potentially Unwanted Program) based on their self-serving, arbitrary specifications on offensive and objectionable content. Malwarebytes will then block the flagged program and prevent the user from using it. Malwarebytes is essentially taking the choice away from the consumer and dictating which anti-malware software they should use. Worse, they are putting consumers at greater risk to cyber-attacks by limiting cybersecurity protection. 

Malwarebyte's argued that under Section 230, they are immune from liability, whether the motives are anti-competitive or not. However, after reviewing the case, Judges of the Ninth Circuit Court of Appeals decided that the broad immunity granted by the CDA stop where anti-competitive behavior begins. On these grounds, the Court reversed the previous dismissal and remanded the case against Malwarebytes back to trial court.