Predatory Marketing Law Opposed By AOL, News Corp., Yahoo, Others

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A new privacy law in Maine is facing a court challenge from media organizations as well as a coalition of online companies including AOL, News Corp. and Yahoo.

The new law, officially titled "An Act To Prevent Predatory Marketing Practices against Minors," prohibits companies from knowingly collecting personal information or health-related information from minors under 18 without their parents' consent. The measure also bans companies from selling or transferring health information about minors that identifies them, regardless of how the data was collected.

Wednesday, opponents asked the federal district court in Maine to issue an injunction against the measure, slated to take effect Sept. 12. In its court papers, the groups opposing the law say it has consequences far beyond limiting the marketing of health-care information. They contend the measure would "prevent common marketing practices used to serve teens information on colleges, test prep services, class rings, etc."

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The groups who are suing include the Maine Independent Colleges Association, Maine Press Association, Reed Elsevier and NetChoice -- a coalition of Web companies like AOL, eBay, Yahoo, IAC, News Corp. and Overstock.com.

The opponents contend the measure is unconstitutional for several reasons. They argue that it violates the First Amendment because it apparently prohibits activities like publishing the names of children under 18 in the newspaper in certain circumstances.

In addition, the groups say the law would prevent teens from receiving information. "Minors will be cut off from registering to receive information about weight loss, AIDS treatment, and a host of other beneficial health care products and services," they argue.

Also, the Web companies specifically argue that they might not be able to even allow teens in Maine to register for their sites. The opponents also say the law would restrict interstate commerce.

Dan Jaffe, executive vice president of government relations at the Association of National Advertisers, says that marketers fear the law is so broad that they will have to stop some ad efforts in the state. "Some of the biggest advertisers in the country came to us and said, 'we are terribly concerned about this new law,'" he says. The ANA opposes the law, but is not a party to the lawsuit.

Jaffe adds that marketers often don't know the exact ages of teens they are targeting. For example, a company might want to send ads to a list of college freshman that does not distinguish between the students who are 17 and those who are older. "We are very hopeful that the court will strike this down," he says. "If not, it is going to cost our members millions of dollars to avoid Maine."

If the law is not enjoined, the Attorney General of Maine would be able to sue to enforce it and private individuals also would be able to sue for at least $250 damages per violation.

The law appears to mark an attempt by the Maine legislature to extend the Children's Online Privacy Protection Act of 1998 -- which regulates Internet marketing to children younger than 13 -- to teens under 18.

But opponents say that the federal law preempts the Maine measure. Also, COPPA -- which prohibits marketers from gathering personal information from children under 13 without their parents' permission -- is much narrower than the Maine law.

Privacy advocate Jeff Chester said the law's basic premise is valid, but that it "likely needs to be revised to accommodate concerns about its impact on educational and other non-profit uses."

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