TMT update (privacy)

Recent/upcoming developments… With the year winding down and the last legislation of the Congressional session – the FY25 continuing resolution (CR) – soon to be enacted, children’s online safety advocates have intensified their push for the Kids Online Safety Act (KOSA, H.R. 7891) and the Children’s & Teen’s Online Privacy Protection Act (COPPA 2.0).  In recent days, President-elect Trump has expressed general support for the effort and key allies (e.g., Elon Musk) have helped develop an amended version of KOSA to try to overcome longstanding concerns from House Republican leaders.  In response to this activity, House Speaker Johnson (R-LA) indicated he is “open to working on a solution” and that he looks forward to “working with the Trump Administration to get the right bill into law.”

* 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 in September, 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 raised concerns around the measure and its potential effects with respect to political censorship.

* This latest version of KOSA incorporates specific revisions to address free speech concerns.  Notably, the bill now clarifies that the “duty of care” cannot be enforced based on users’ viewpoints expressed through constitutionally protected speech.  Additionally, it narrows the scope regarding anxiety and depressive disorders, specifying that these conditions must be “objectively verifiable” and linked to “compulsive usage” to warrant action.

Our outlook… Johnson’s comments essentially put an end to any effort to enacting children’s privacy legislation this year, but Trump’s support and Johnson’s openness to the legislation increases the probability to 50%+ that a refined version of KOSA (plus COPPA 2.0) will be enacted next year.  Despite these developments, we cannot yet have strong conviction as to the likelihood of enactment, as House Republican leaders appear skeptical about the current version of KOSA and there are still indications that civil rights stakeholders aligned with Democratic lawmakers (whose support will be necessary in the Senate) oppose the measure.

Watch for these developments… Once the 2025 legislative session begins, we will be watching for indications that the revised version of KOSA (whether the latest salvo from Musk or another new version from House Republicans) has at least some degree of support from Senate Democrats, as this would give us greater conviction that the bill is likely to be enacted.  On process, we are watching for evidence that key leadership (i.e., House Energy & Commerce Chair Guthrie (R-KY), Senate Commerce Chair Cruz (R-TX), Speaker Johnson, Senate Majority Leader Thune (R-SD)) are allocated 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 momentum.