The FTC’s COPPA Conundrum: Ambiguities in the Rule and a Death of Authoritative Guidance Leave the Agency Vulnerable to Legal Challenges

This article was originally published by the ABA’s ANTITRUST magazine in its Summer 2022 issue.

The Children’s Online Privacy Protection Act (COPPA) and the Federal Trade Commission’s COPPA-enforcing rule have increasing relevance for all businesses that interact directly with consumers online—including companies that do not regard themselves as marketing directly to children. Both the FTC and state Attorneys General are active in enforcing COPPA, and companies can often be caught off guard by government inquiries scrutinizing their compliance. (more…)

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Sean Royall

Dallas, Washington, D.C.

sroyall@sidley.com

The California Age-Appropriate Design Code Act Dramatically Expands Business Obligations

On September 2, 2022, the California Age-Appropriate Design Code Act (the “Act”) (effective July 1, 2024) was passed by the California legislature, and on September 15, 2022 was signed into law by Governor Newsom.  This Act dramatically expands business obligations and will force entities that provide an online service, product, or feature that is “likely to be accessed by children” (“Product”) to implement stringent privacy settings for users under 18. It aligns in many respects with the United Kingdom’s Age Appropriate Design Code, which passed in 2020. Together, these laws represent a significant shift in the regulatory landscape of children’s digital services.

The overarching policy of the Act is to require such entities to prioritize the best interests of children when developing and implementing their services.  The Act implements this policy through a number of stringent requirements, including using language in privacy notices that is age-appropriate, undertaking physical and mental well-being impact assessments for existing and new products and services, and implementing stringent requirements on such entities use of the data as a default.

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Federal Trade Commission Hosts Panels Related to Consumer Privacy and Data Security at PrivacyCon

This summer, the Federal Trade Commission (“FTC”) hosted its sixth annual PrivacyCon, an event focused on the latest research and trends related to consumer privacy and data security. This years’ event was divided into six panels: Algorithms; Privacy Considerations and Understandings; Adtech; Internet of Things; Privacy-Children and Teens; and, Privacy and the Pandemic. Welcoming attendees and kicking off the event, Commissioner Rebecca Kelly Slaughter called for minimization of data abuses and for a move away from the notice and consent model of privacy in favor of data minimization. PrivacyCon topics are selected by the FTC and often seen as an indication of enforcement priorities. (more…)

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Long-Awaited Online Safety Bill is Introduced by the UK Government to Combat “Harmful” Online Content

Two years after the UK Government first put forward its intention to introduce a new regime to address illegal and harmful content online, the UK Government published the Online Safety Bill (“Bill”) on 12 May 2021. The Bill imposes duties of care on providers of digital services, social media platforms and other online services to make them responsible for content generated and shared by their users and to mitigate the risk of harm arising from illegal content (e.g., by minimising the spread of such content). The Bill also aims to ensure that users are able to express themselves freely online and requires platforms to consider the importance of freedom of expression when fulfilling their duties.

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California Amends Privacy Laws Again: CCPA Health Information Amendment and Employee/B2B Exemption Signed into Law; Vetoes for Genetic Privacy and Social Media Parental Consent Bills

California’s Governor Gavin Newsom recently signed into law two bills to amend the California Consumer Privacy Act (“CCPA”).  He also vetoed two other consumer privacy bills based on concerns about potential conflicts with existing state and federal law. Collectively, these four bills represented the most significant privacy legislation that came out of the California Legislature’s 2019-20 term, which came to a close on September 30th.

Only one of the two new CCPA amendments, AB713, includes substantive changes to the law.  It streamlines the CCPA’s health information exception and imposes new obligations on CCPA businesses and others that handle deidentified patient information.

The other CCPA amendment, AB1281, simply extends the CCPA’s employee and B2B exemptions to January 1, 2022 if voters fail to pass Proposition 24 (CPRA or CCPA 2.0) in November.  Those exemptions are currently set to expire on December 31st of this year.

Newsom also vetoed two consumer privacy bills despite expressing support for the goals of each.  SB980 would have expanded consumer rights with respect to genetic information collected by direct-to-consumer genetic testing companies.  Newsom’s veto was motivated by concerns that the law could have “unintended consequences” for the operation of the state’s communicable disease reporting requirements, including those applicable to COVID-19.  The other bill, AB1138, would have imposed additional parental consent requirements on social media network operators.  Newsom vetoed it to avoid potentially overlapping state and federal compliance obligations, citing parallels between the bill and federal regulations under the Children’s Online Privacy Protection Act (“COPPA”).

Here we outline the significant features of each of the new CCPA amendments.

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An Early Recap of Privacy in 2020: A US Perspective

*This article was adapted from “Global Overview,” appearing in The Privacy, Data Protection and Cybersecurity Law Review (7th Ed. 2020)(Editor Alan Charles Raul), published by Law Business Research Ltd., and first published by the International Association of Privacy Professionals Privacy Perspectives series on September 28, 2020.

Privacy, like everything else in 2020, was dominated by the COVID-19 pandemic. Employers and governments have been required to consider privacy in adjusting workplace practices to account for who has a fever and other symptoms, who has traveled where, who has come into contact with whom, and what community members have tested positive or been exposed.

As a result of all this need for tracking and tracing, governments and citizens alike have recognized the inevitable trade-offs between exclusive focus on privacy versus exclusive focus on public health and safety.

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Alan Charles Raul

Washington, D.C., New York

araul@sidley.com

Federal and State Authorities Increase Scrutiny and Enforcement of Children’s Privacy; Google, YouTube Agree to Pay a Record $170 Million Fine

This fall, scrutiny has increased on children’s privacy with the FTC and New York Attorney General’s announcement of the largest fine ever for violations of the Children’s Online Privacy Protection Act (“COPPA”), followed by FTC public workshops on updating the COPPA Rule.  Combined with increased requirements for the sale of teen personal information under the California Consumer Privacy Act (“CCPA”), and calls for triple fines for children’s privacy violations under a potential CCPA 2.0 referendum for 2020, children’s privacy has come to the forefront of privacy risks.

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China Implements Regulation Increasing Protections for Children’s Personal Data

On 22 August 2019, the Cyberspace Administration of China (CAC) announced the implementation of the Online Protection of Children’s Personal Data Regulation (儿童个人信息网络保护规定), (“the Regulation”) which came into force on 1 October 2019. The Regulation comprises a list of rules which seek to ensure the safety of children’s personal data and promote a healthy upbringing for children.

This constitutes the latest step in China’s drive to sophisticate its data protection regime and adds to legislation under the framework of the Cybersecurity Law, implemented in 2017. It contains similarities to the Children’s Online Privacy Protection Act (COPPA) in the U.S. and the GDPR in the EU.

As there is no official English translation of the Regulation, this article summarises its key points.

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FTC Announces Record-Setting $5.7M COPPA Penalty

On February 27, 2019, the Federal Trade Commission (“FTC”) announced a record-setting $5.7 million civil penalty against makers of the popular free video creation and sharing app, Musical.ly (now known as TikTok), for violations of U.S. children’s privacy rules. This is the largest civil penalty the FTC has issued concerning violations of the Children’s Online Privacy Protection Act (“COPPA”).

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Spain’s New Data Protection Act Now in Force

When the GDPR came into effect on May 25, 2018, several European Member States had yet to put in place further implementing legislation.  And while the data protection world watches and eagerly digests each new interpretive guidance from data protection authorities, Member State legislation provides additional interpretive tones of harmony or discord in data protection across Europe.  After much delay and almost seven months after the EU’s General Data Protection Regulation (“GDPR”) came into force, the Organic Law 3/2018 on the Protection of Personal Data and Guarantee of Digital Rights (“LOPDGDD”) – which implements the GDPR in Spain – entered into force on 7 December 2018. (more…)

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