Apple co-founder Steve Wozniak won his lawsuit against social media giant YouTube for the unintended use of his image in videos promoting a Bitcoin scam in 2020.
A San Jose appeals court overturned a previous judgment that cleared YouTube of liability.
Appeals Court Rules Against YouTube in Apple Co-founder, Steve Wozniak Scam Case
The appeals court ruled that YouTube cannot rely on a controversial communications law to shield itself from accountability in a scam involving the unauthorized use of the Apple co-founder’s likeness.
In 2020, Wozniak initiated a lawsuit against YouTube and its parent company, Google, alleging that they facilitated the proliferation of a scam targeting Bitcoin investors. This scheme utilized Wozniak’s image to deceive individuals into sending cryptocurrency to online fraudsters under the pretense of participating in a live giveaway hosted by Wozniak, promising to double the amount sent.
The scam involved doctored videos circulating on YouTube, wherein Wozniak appeared to be speaking at tech conferences, accompanied by promises of free Bitcoin. Viewers were instructed to send cryptocurrency with the promise of doubling their investment, a scheme that defrauded many unsuspecting users.
According to the lawsuit, users who fell victim to the scam transferred their cryptocurrency in irreversible transactions but received nothing in return. Over the years, multiple celebrities have been targeted and used to promote such scams.
In 2020, the identities of Ethereum co-founder Vitalik Buterin and Tyler and Cameron Winklevoss, founders of the U.S.-based Gemini exchange, were used to lure people into giving up their crypto. The fraudulent scheme also exploited the names and images of prominent tech figures, such as Microsoft co-founder Bill Gates and Tesla CEO Elon Musk.
In response, Wozniak and 17 other alleged victims filed a lawsuit against YouTube and its parent company, Google, in 2020, accusing them of knowingly hosting and promoting these fraudulent videos for profit. Despite Wozniak’s efforts to halt the unauthorized use of his likeness, YouTube remained unresponsive, according to the lawsuit, leading to irreparable harm to his reputation.
Appeals Court Finds That YouTube Is Not Protected by Section 230
Initially, a Santa Clara County Superior Court judge ruled in 2022 that YouTube and Google were shielded from liability by Section 230 of the Communications Decency Act, which protects internet companies from liability over third-party content.
However, the court found that Google and YouTube may not be protected under this law as they allegedly contributed to the scam by providing verification badges to hijacked channels.
They held Google and YouTube accountable for actively contributing to the Bitcoin scam that affected Steve Wozniak by providing verification badges to hijacked channels. Despite Google’s claims that verification badges are only awarded to legitimate channels, the court noted instances where badges were issued to channels involved in the scam.
Apple co-founder Steve Wozniak and 17 notable figures win lawsuit against YouTube for using doctored videos in a Bitcoin scam. A San Jose appeals court rules against YouTube's immunity claim, potentially changing laws protecting platforms.
— BlockVoyager (@BlockVoyagerAIO) March 20, 2024
Furthermore, the court criticized the platforms for failing to remove these badges when the channels began promoting fraudulent content and even awarding verification badges during the scam operation.
The appellate judges emphasized the prevalence of such scams, noting that popular YouTube channels were being compromised to broadcast fake videos featuring tech celebrities purportedly hosting live events.
In response to the verdict, Wozniak’s attorney, Joe Cotchett, stated the importance of holding social media platforms like Google and YouTube accountable for their actions and stressed that they cannot use Section 230 as a blanket shield for their conduct.
The ruling sends the case back to Santa Clara County Superior Court, allowing Wozniak and his co-plaintiffs to amend their lawsuit. They seek unspecified damages and an order for YouTube to warn users about the scam and prevent its continuation on the platform.
Wozniak has previously expressed concerns about deceptive online behavior facilitated by artificial intelligence, highlighting the need for vigilance against bad actors exploiting technology for fraud.
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