Tech update (children’s data privacy)

Recent/upcoming developments… The new Congress is wasting little time in resuming its efforts around children’s privacy/online safety legislation.  The Senate Commerce Committee approved on a bipartisan basis Chair Cruz’s (R-TX) newly introduced Kids Off Social Media Act (KOSMA).  KOSMA aims to enhance online safety for minors by prohibiting users under 13 from accessing social media platforms, restricting the use of personalized recommendation systems for individuals under 17, and limiting social media use in schools.  And in recent days, House Energy & Commerce (E&C) Committee Chair Guthrie (R-KY) announced his committee will start a working group on privacy, which Guthrie indicated would be heavily focused on privacy issues relating to children and would first look at moving forward last year’s Kids Online Safety Act (KOSA) proposal.

* As reminder, following months of activity around the two leading children’s privacy/online safety proposals – the Kids Online Safety Act (KOSA,) and the Children’s & Teen’s Online Privacy Protection Act (COPPA 2.0) – the effort to enact those bills into law failed late last year when House Republican leadership (i.e., Speaker Johnson (R-LA)) indicated he wanted the incoming Republican Congress to address those issues.

* KOSA – which is focused on online safety and privacy – would require platforms to enable the strongest privacy/safety settings by default, disable “addictive” features, and create a duty for platforms to prevent specific dangers to minors.  COPPA 2.0 – which is focused on privacy – would ban targeted ads to minors and extend existing privacy protections to users aged 13-16.  The Senate voted 91-3 in last August to pass the Kids Online Safety & Privacy Act (KOPSA), a bill combining KOSA and COPPA 2.0.  And last September, the House Energy & Commerce (E&C) Committee voted (by voice vote) to advance both bills.  Neither bill has been reintroduced this session, though reintroduction is likely.

Our outlook… Cruz’s pursuit of KOSMA so early into the Congressional session and Guthrie’s comments regarding KOSA suggest that Republican lawmakers are prioritizing children’s privacy/online safety legislation.  This dynamic, paired with support from Johnson and President Trump’s for the effort, reinforce our view that it is more likely than not (50%+ probability) that children’s privacy/online safety legislation will be enacted this year.  That said, Guthrie’s focus on KOSA and Cruz’s pursuit of entirely new legislation suggest that lawmakers have not yet coalesced around a single approach.  Moreover, it remains the case that the various threads of legislative activity here have detractors on both sides of the aisle (i.e., Republican concerns around KOSA’s duty of care, progressive concerns around civil rights issues) and industry lobbying against such proposals is intense.  And with much of the legislative capacity in the ~first half of the year likely to be consumed by tax/spending legislation and the FY25 appropriations, we cannot have strong conviction on the outcome.  However, what is clear is that Republicans are placing little emphasis on moving forward comprehensive privacy legislation, as evidenced by both Cruz and Guthrie suggesting they intend to start from scratch on such proposals and only after they dig into the children’s privacy/online safety issue.

Watch for these developments… On the substance, we are watching for whether the House and Senate move forward with competing approaches to the children’s privacy/online safety issue, as this will complicate the legislative effort and potentially depress the probability of enactment.  On process, we are watching for evidence that leadership (i.e., Speaker Johnson, Senate Majority Leader Thune (R-SD)) are allocating time and political capital to this issue, as a decision to prioritize other tech-related issues would suggest the children’s online safety/privacy effort is losing some of its early momentum.