Enacts the New York child data privacy protection act to prevent the exploitation of children's data; requires data controllers to assess the impact of its products on children for review by the bureau of internet and technology; bans certain data collection and targeted advertising.
STATE OF NEW YORK
________________________________________________________________________
9563
IN SENATE
September 23, 2022
___________
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the general business law, in relation to enacting the
New York child data privacy and protection act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "New York
2 child data privacy and protection act".
3 § 2. Legislative intent. The legislature hereby finds that 95% of
4 individuals under the age of 18 in the United States enjoy access to the
5 Internet in their residences.
6 The legislature further finds that American teenagers spend seven
7 hours and 22 minutes on average per day browsing social media, and that
8 53% of children will own a smartphone by the time they're 11 years of
9 age.
10 The legislature recognizes that, while broadband access is a core
11 component of modern life and critical to the ability of children and
12 young people to feel socially, emotionally, economically, and educa-
13 tionally connected to the world around them, it is not without its risks
14 and detriments.
15 The legislature finds, for example, that teenagers who spend between
16 five to seven hours a day on the Internet are twice as likely to suffer
17 from depression compared to those logged in for one hour a day.
18 The legislature further finds that, according to recent surveys
19 conducted by a prominent social media platform, 34% of young adults feel
20 uneasy when they are not online, 40.6% complain that their sleep habits
21 have been negatively affected by social media, and 35% report being
22 cyberbullied on the Internet.
23 The legislature further finds that, according to the 2021 U.S.
24 Surgeon General Advisory on Protecting Youth Mental Health, digital
25 public spaces are frequently designed to maximize user engagement as
26 opposed to safeguarding user health, leading to negative impacts of
27 digital technologies and social media on the mental health and well-be-
28 ing of adolescents.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD16301-04-2
S. 9563 2
1 The legislature further finds that the pitfalls of the Internet are
2 not limited to teenagers, with young children potentially exposed to
3 unsettling, dangerous, or age inappropriate content if not closely moni-
4 tored by an adult.
5 The legislature further finds that young children run a higher risk of
6 coming into contact with strangers online, inadvertently sharing
7 personal information online, inadvertently making in-app purchases or
8 signing contracts, terms, or conditions online, becoming subject to,
9 witnessing, or participating in potentially harmful conduct online, or
10 purchasing drugs and other dangerous products advertised online or sold
11 through online platforms.
12 The legislature recognizes the role of lawmakers to guard against and
13 mitigate these risks for children under the age of 18 wherever possible.
14 The legislature finds that, while Congress passed the landmark Chil-
15 dren's Online Privacy Protection Act (COPPA) in 1998 limiting the
16 collection, use, and disclosure of data collected from children under 13
17 years of age, requiring operators to retain such data for a limited
18 amount of time, and restricting certain marketing to children under 13
19 years of age, multiple studies have found the vast majority of applica-
20 tion developers to be out of compliance with these rules.
21 The legislature further finds that recent studies show at least two-
22 thirds of applications transmit data about very young children to third
23 party marketing companies.
24 The legislature further finds that President Biden recently declared
25 the need to "strengthen privacy protections, ban targeted advertising to
26 children, [and] demand tech companies stop collecting personal data on
27 our children" in his 2022 State of the Union Address.
28 The legislature further finds that, subsequent to this address, the
29 Federal Trade Commission announced that it will prioritize the enforce-
30 ment and modernization of COPPA to "crack down on companies that ille-
31 gally surveil children online".
32 The legislature further finds that there has been a flurry of recent
33 legislative activity at the state, federal, and international levels to
34 address this issue, including the California Age-Appropriate Design Code
35 Act, the Virginia's Consumer Data Protection Act, the Colorado Privacy
36 Act, the Connecticut Data Privacy Act, the Utah Consumer Privacy Act,
37 several federal proposals to strengthen and improve COPPA, and the UK's
38 Age Appropriate Design Code.
39 The legislature hereby concludes that the state of New York too has a
40 role to play in better preventing the exploitation of children's data in
41 the modern era, and thus presents the New York Child Data Privacy and
42 Protection Act.
43 § 3. The article heading of article 39-F of the general business law,
44 as amended by chapter 117 of the laws of 2019, is amended to read as
45 follows:
46 NOTIFICATION OF UNAUTHORIZED ACQUISITION OF PRIVATE
47 INFORMATION; DATA SECURITY PROTECTIONS; CHILD DATA PRIVACY AND
48 PROTECTION ACT
49 § 4. The general business law is amended by adding a new section 899-
50 cc to read as follows:
51 § 899-cc. New York child data privacy and protection act. 1. Defi-
52 nitions.
53 (a) "Bureau" shall mean the bureau of internet and technology in the
54 office of the New York attorney general.
55 (b) "Child" or "children" shall mean a consumer or consumers under
56 eighteen years of age.
S. 9563 3
1 (c) "Child user" shall mean a child accessing an online product with a
2 device.
3 (d) "Data breach" shall mean a breach of security leading to the acci-
4 dental or unlawful destruction, loss, alteration, unauthorized disclo-
5 sure of, or access to, personal data of child users transmitted, stored,
6 or otherwise processed.
7 (e) "Data controller" or "controller" shall mean a natural or legal
8 person which, alone or jointly with others, determines the purposes and
9 means of processing of the personal data of child users. This includes,
10 but is not limited to, any business, website, or platform that collects
11 data while selling electronic advertising space on its platform tailed
12 to any one or any aggregation of the items of personal data defined in
13 this section. No data controller is exempt from the requirements of this
14 article if they are processing pseudonymized data, whereby "pseudonym-
15 ized" or "pseudonymization" means the processing of personal data in a
16 manner that renders the personal data no longer attributable to a
17 specific child user without the use of additional information, provided
18 that the additional information is kept separately and is subject to
19 technical and organizational measures to ensure that the personal data
20 is not attributed to an identified or identifiable child user.
21 (f) "Data protection impact assessment" shall mean an internal evalu-
22 ation which the bureau requires entities to carry out in order to evalu-
23 ate the level of risk associated with such entity's collection,
24 retention, processing, or sale of child user data.
25 (g) "Online product" shall mean an online service, feature, or plat-
26 form that is accessible to users with a digital device.
27 (h) "Personal data" shall mean any computerized information about a
28 child user set forth in this paragraph that is not made publicly avail-
29 able through federal, state or local government agencies or any publicly
30 available information, regardless of whether it is collected for the
31 purpose of selling or transferring it to another entity. Personal data
32 shall mean information that identifies, relates to, describes or is
33 reasonably linked to a particular child user, including but not limited
34 to:
35 (i) physical address;
36 (ii) legal name;
37 (iii) alias;
38 (iv) unique personal identifier;
39 (v) online identifier;
40 (vi) internet protocol address;
41 (vii) e-mail address;
42 (viii) account name;
43 (ix) social security number;
44 (x) place of birth;
45 (xi) date of birth;
46 (xii) phone number;
47 (xiii) audio, visual, thermal, or olfactory data;
48 (xiv) medical history, records of past medical treatment, or any diag-
49 nosis of a physical or mental health condition or disability;
50 (xv) educational information that is not already publicly available
51 through a local, state, or federal agency;
52 (xvi) real time geolocation data or stored geolocation history;
53 (xvii) any unique biometric data, body measurement, technical analysis
54 or measurements collected for the purpose of allowing a child user to
55 authenticate him or herself on a device, internet application, or web-
56 based platform;
S. 9563 4
1 (xviii) names and identifying information of a child user's immediate
2 family;
3 (xix) internet or any other electronic network activity, including
4 browsing history, search history, and information regarding a child
5 user's activity on a website or interaction with an electronic adver-
6 tisement;
7 (xx) any other information that alone, or combined with any of the
8 information described in this paragraph, could be reasonably used to
9 identify an individual child user; and
10 (xxi) any inferences drawn from any of the combined forms of personal
11 data that are used to create a profile of the child user reflecting the
12 child's preferences, choices, characteristics, psychological trends,
13 intelligence, aptitude, and emotional or physical health or behavior.
14 "Personal data" shall also include any information which creates prob-
15 abilistic identifiers that can be used to isolate, individualize, or
16 identify a child user or device to a degree of certainty more probable
17 than not based on any item of personal data defined in this paragraph.
18 (i) "Privacy by default" shall mean that the online product, once
19 released to the public, is predesigned so that the strictest online
20 privacy settings shall apply without any manual input required from the
21 user. In addition, "privacy by default" shall mean that the online prod-
22 uct shall only retain personal data provided by a child user for the
23 duration of time necessary to provide such product to such user.
24 (j) "Process", "processing" or "processor" shall refer to an operation
25 or set of operations performed on personal data or sets of personal
26 data, whether or not by automated means, on behalf of a data controller.
27 (k) "Sale" or "sold" shall mean the disclosure, dissemination, making
28 available, release, transfer, conveyance, license, rental, or other
29 commercialization of child user data by a data controller to another
30 party, whether commercialization occurs via access to raw data or via
31 use of platform interface. This definition shall include dissemination
32 of child user data, orally, in writing, or by electronic or other means,
33 for monetary or other valuable consideration, or otherwise for a commer-
34 cial purpose, by a data controller to another party.
35 (l) "Targeted towards child users" shall mean that the online product
36 knows or should know that its product is accessible to and used by chil-
37 dren.
38 2. Data protection impact assessments. (a) Each entity offering an
39 online product that is targeted towards child users in this state shall
40 complete a data protection impact assessment before such product can be
41 made available to the public. The data protection impact assessment
42 shall include an analysis of the following:
43 (i) The ways in which child users primarily interact with or consume
44 the online product;
45 (ii) The amount of time, on average, that a child user spends using
46 the online product and whether the product includes any features that
47 are designed to extend or increase such amount of time;
48 (iii) The amount and type of data of child users collected, retained,
49 processed, and/or sold;
50 (iv) The purpose of the collection, retention, processing, or sale of
51 such data;
52 (v) If the entity is a data controller, the data sharing relationships
53 the entity has with data processors or other third parties with whom it
54 shares the personal data of child users, including any data addendums or
55 other legal policies put into place between the entity and the party
56 receiving the data;
S. 9563 5
1 (vi) Data security protections of the online product which work to
2 prevent and respond to data breaches, as defined in subdivision one of
3 this section;
4 (vii) Any privacy policies, terms of service, or other legal policies
5 published on the online product which relate to child users and whether
6 they are written in a way that can reasonably be understood by a child
7 user;
8 (viii) Whether such policies or terms of service require approval of
9 the parent or legal guardian of the child user;
10 (ix) Community standards for published content on the online product,
11 and whether and how the product removes content which violates such
12 standards;
13 (x) Whether such online product exposes children to potentially harm-
14 ful content;
15 (xi) Whether the use of such online product could lead to children
16 being targeted by a potentially harmful contact;
17 (xii) Whether the online product could allow child users to witness,
18 participate in, or be subject to potentially harmful conduct;
19 (xiii) Whether the online product shares information on the child
20 user's activity on such product with such child's legal parent or guard-
21 ian;
22 (xiv) Opportunities for individuals developing an online product
23 targeted towards child users to voice concerns about such product
24 before, during, and after development without fear of retaliation
25 against such individual;
26 (xv) Ways in which an entity offering an online product targeted
27 towards child users solicits feedback from children, parents, educators,
28 health professionals, youth development professionals, and the general
29 public on the online product;
30 (xvi) Whether and how child users can opt out or limit exposure to
31 certain types of content;
32 (xvii) The impact of the online product on a child user's behavioral,
33 emotional, and physical health; and
34 (xviii) Any other factors the bureau deems relevant to assess the
35 material risk of the online product posed to child users.
36 (b) Each entity completing such data protection impact assessment
37 shall send such assessment to the bureau of internet and technology,
38 which shall determine whether such entity's online product may be
39 offered to the public based on such assessment. Any potential risks
40 posed by the online product, including risks of noncompliance with any
41 provision of this section or any other law, which are identified by the
42 bureau shall be communicated by the bureau back to the entity, which
43 shall then create a plan to mitigate or eliminate such risk before such
44 product may be made available to the public.
45 (c) An entity shall be required to submit annual data protection
46 impact assessments for review to the bureau after receiving initial
47 approval for such entity's online product as described in paragraph (b)
48 of this subdivision.
49 3. Ban on data collection and digital advertising. (a) No entity
50 offering an online product targeted towards child users in this state
51 shall collect, retain, process, or sell the personal data of such users
52 unless such collection, retention, processing, or sale is necessary to
53 provide such online product and such collection, processing, retention,
54 or sale is limited to such purpose. Alternatively, an entity offering an
55 online product may collect, retain, process, or sell the personal data
S. 9563 6
1 of a child user if it can demonstrate to the bureau that it has a
2 compelling reason to do so which furthers the interest of the child.
3 (b) No entity offering an online product targeted towards child users
4 in this state shall use digital advertising on such product to target
5 such users unless consent for such advertising is obtained from the
6 child's parent or legal guardian and the entity can demonstrate to the
7 bureau that it has a compelling reason to offer such advertising which
8 furthers the interest of the child.
9 (c) No entity offering an online product targeted towards child users
10 in this state where such product is intended primarily for educational
11 purposes shall collect, retain, process, or sell the personal data of
12 child users.
13 4. Requirement for certain settings. (a) All entities offering an
14 online product targeted towards child users in this state shall utilize
15 privacy by default, unless the entity can demonstrate a compelling
16 reason to the bureau that an alternative default setting should be used.
17 (b) All entities offering an online product targeted towards child
18 users must design and activate a feature which proactively alerts child
19 users, in a manner likely to be understood by a child in the age range
20 targeted by the online product, when their personal data is being
21 collected and for the duration of time such collection occurs.
22 (c) The bureau shall have the discretion to ban auto-play, push
23 notifications, prompts, in-app purchases, or any other feature in an
24 online product targeted towards child users that it deems to be designed
25 to inappropriately amplify the level of engagement a child user has with
26 such product.
27 5. Deceased child users. All entities offering an online product
28 targeted towards child users in this state shall provide access to such
29 user's account, metadata, and user history to a parent or legal guardian
30 upon the death of such child user and request from such parent or guard-
31 ian for such access.
32 6. Law enforcement. All entities offering an online product targeted
33 towards child users in this state shall expedite and prioritize civil
34 and criminal subpoenas and criminal warrants pertaining to child users
35 who have been a victim of a crime with maximum exigence.
36 7. Terms of service. (a) Any entity offering an online product target-
37 ed towards child users in this state shall prominently display a privacy
38 policy and terms of service, to include warnings about potential harms
39 to child users, in a manner which clearly and concisely communicates to
40 a child user, using language likely to be understood by an individual in
41 the age range targeted by such product.
42 (b) All privacy policies and terms of service of an online product
43 targeted towards child users in this state must be agreed to by both the
44 child user and the parent or legal guardian of such child before such
45 product can become operational for the child user.
46 (c) Any entity offering an online product targeted towards child users
47 in this state shall clearly post that the terms of service do not impose
48 binding obligations on the child user to the entity.
49 8. Notification of emergent problems. Any entity offering an online
50 product targeted toward child users in this state shall create and prom-
51 inently display a method for children, parents, and legal guardians to
52 notify such entity of emergent problems with such product. Such method
53 of notification shall not require the parent, guardian, or child user to
54 have an account on such product in order to notify the entity. All elec-
55 tronic notifications of emergent problems described in this subdivision
S. 9563 7
1 shall be assigned an identification number and contemporaneously gener-
2 ate an electronic receipt for the notifying individual.
3 9. Public awareness campaign. Before the effective date of this
4 section and on a regular, ongoing basis, the bureau shall execute a
5 public awareness campaign to inform entities that create digital
6 products targeted towards child users, parents, teachers, and the gener-
7 al public of the provisions of this section in order to ensure maximum
8 compliance thereof. Such campaign may include digital content, bill-
9 boards, posters, pamphlets, targeted mailers, public service announce-
10 ments, partnerships with local school districts, or any other method to
11 increase general awareness of the provisions of this section.
12 10. Annual report. The bureau of internet and technology shall produce
13 and transmit a biennial report to the temporary president of the senate,
14 the speaker of the assembly, and the governor summarizing:
15 (a) the number of entities completing data protection impact assess-
16 ments and the results thereof;
17 (b) the amount and type of child user data being collected, retained,
18 processed, and/or sold by such entities and the purpose thereof;
19 (c) the volume and nature of material risks posed to child users by
20 such online products and measures taken to mitigate or eliminate such
21 risk;
22 (d) the volume of notifications of emergent problems and a categorical
23 description of each type of problem (i.e. material that led to child
24 sexual abuse or grooming, instances of suicide or drug overdose related
25 to use of online products by child users, instances of bullying facili-
26 tated by online products);
27 (e) a description of the policies and terms of service being presented
28 to child users and their parents or legal guardians as well as accept-
29 ance and denial rates of such policies and terms;
30 (f) the number of individuals or businesses found to be in noncompli-
31 ance with this act pursuant to subdivision eleven of this section;
32 (g) the number of individuals or businesses that have cured violations
33 of this section of their own accord after being issued notice of such
34 violation by the bureau;
35 (h) the number of actions brought against individuals or businesses
36 pursuant to paragraph (a) of subdivision eleven of this section and the
37 results of such actions;
38 (i) a summary of the public education efforts undertaken by the bureau
39 on an ongoing basis to alert the public and interested stakeholders of
40 the provisions of this section, pursuant to subdivision nine of this
41 section; and
42 (j) legislative recommendations for improvements to this or any other
43 statute governing digital actors in this state.
44 11. Penalties. (a) Whenever the attorney general shall believe from
45 evidence satisfactory to him or her that there is a violation of this
46 section, he or she may bring an action in the name and on behalf of the
47 people of the state of New York, in a court of justice having jurisdic-
48 tion to issue an injunction, to enjoin and restrain the continuation of
49 such violation. Wherever the court shall determine in such action that a
50 person or business violated this article knowingly or recklessly, the
51 court may impose a civil penalty of up to twenty thousand dollars per
52 instance of violation, provided that the latter amount shall not exceed
53 two hundred fifty million dollars.
54 (b) The attorney general shall provide written notice to all people or
55 businesses of alleged violations at least ninety days before initiating
56 any action described in paragraph (a) of this subdivision. The person or
S. 9563 8
1 business shall then have an opportunity to cure any alleged violation of
2 this section. After such alleged violation has been cured, the person or
3 business shall send written notice to the attorney general who shall
4 then retain discretion as to whether or not to pursue an action against
5 such person or business.
6 (c) The proceeds from penalties collected from violations of this
7 section, pursuant to paragraph (a) of this subdivision, shall be
8 disbursed as follows: (i) twenty percent of such proceeds shall be
9 dedicated to the public awareness campaign described in subdivision nine
10 of this section; and (ii) the remaining eighty percent of such proceeds
11 shall be dedicated to the enforcement of this section by the bureau.
12 (d) An action may be brought against any person or business who has
13 knowingly or recklessly violated this article if such action is brought
14 on behalf of a child user or by next of kin of a deceased child user
15 alleging harm from such violation. A plaintiff who prevails on a claim
16 alleging a violation of this section is entitled to compensatory, actu-
17 al, and punitive damages, injunctive relief, reasonable attorneys' fees
18 and costs, and other such remedies as a court may deem appropriate.
19 § 5. This act shall take effect on the one hundred eightieth day after
20 it shall have become a law and shall apply to all online products
21 targeted towards child users in this state which are made available to
22 the public on or after such effective date. Effective immediately, the
23 addition, amendment and/or repeal of any rules or regulations necessary
24 for the implementation of this act on its effective date are authorized
25 to be made on or before such effective date.
