TMT update (children’s data privacy)

Recent/upcoming developments… Resistance from House Republican leadership to the leading children’s online safety/privacy bills – Kids Online Safety Act (KOSA, H.R. 7891) and the Children’s & Teen’s Online Privacy Protection Act (COPPA 2.0) – is creating new obstacles to the enactment of those proposals this year.

* As a reminder, KOSA – which is focused on both 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 and mitigate specific dangers to minors.  COPPA 2.0 – which is largely focused on privacy – would ban targeted ads to minors and extend existing children’s privacy protections to users aged 13-16.

* The Senate voted 91-3 in early August to pass the Kids Online Safety & Privacy Act (KOPSA), a bill combining KOSA and COPPA 2.0.  And last month, the House Energy & Commerce (E&C) Committee voted (by voice vote) to advance both bills.  As previously noted, the E&C vote on KOSA was fraught with partisan tension, as Democratic lawmakers called the House’s amended version of KOSA weak as compared to the Senate’s bill and most appeared to vote against it (including Ranking Member Pallone (D-NJ)), and some Republicans – whose leadership negotiated the amended version – raised concerns around the measure.

Our outlook… Opposition to KOSA by House Republican leadership – particularly House Majority Leader Scalise (R-LA) – and conservatives within the party merits a reduction in the probability of enactment of either bill to 45% (down from 65% for COPPA 2.0 and 55% for KOSA).  And though there is more tension around KOSA as compared to COPPA 2.0, the bills are conceptually linked together (and in the case of the Senate bill, specifically linked), and the pushback to one effects the fortunes of the other.  This year’s legislative window is rapidly closing, and it will be difficult from a process standpoint for lawmakers to settle the partisan divides over the substance of KOSA post-election given the compressed timeframe.  Generally, the motivation to act on this issue remains high, but it is becoming more likely that the children’s online safety/privacy issues will fail this year and have to be taken back up next year (which we expect will occur).

Watch for these developments… We are watching for indications from House Republican leadership as what changes would need to be made to KOSA.  The Democratic reaction to those demands (which may never materialize) would clarify whether there is a bipartisan deal to be reached this year.  Also, we are also watching for signals from House leadership that they are open to considering KOSA and COPPA 2.0 in isolation from one another, as this would likely clear a path for COPPA 2.0 being passed by the House and enacted into law this year (to the degree we also see Senate openness to this bifurcation).