California Kids Safety Law Draws Support From Watchdogs, FTC Commissioner

Critics of the tech industry are lining up in support of California's controversial Age-Appropriate Design Code, a 2022 law requiring companies likely to be accessed by users under 18 to prioritize their “best interests” and “well-being,” and largely prohibiting those businesses from collecting or sharing minors' personal information.

That law is a valid regulation of “data capitalism,” Fairplay, Center for Digital Democracy, Accountable Tech, and others write in a friend-of-the-court brief filed Wednesday with the 9th Circuit Court of Appeals. 

“Under data capitalism, companies make profit by extracting personal data of individuals and selling data-driven services back to other individuals or corporations,” they add.

“Powerful social platforms’ targeting and profiling tools are designed not to advertise, but to hypnotize children,” the watchdogs contend. “User engagement generates data; data collection brings in advertisers; ad space increases profits; and the cycle repeats.”

The legal battle over the law dates to last December, when the tech industry group NetChoice challenged the law in court. That group argued the design code is unconstitutional for several reasons, including that mandate to prioritize young users' well-being interferes with web publishers' decisions about editorial content, and is unconstitutionally vague.

In September, U.S. District Court Judge Beth Labson Freeman in the Northern District of California agreed with NetChoice and blocked enforcement, ruling that measure likely violated the First Amendment. For instance, she wrote, a provision banning tech companies from drawing on minors' data for profiling and targeting didn't take into account “beneficial aspects of targeted information.”

California Attorney General Rob Bonta is now appealing that decision to the 9th Circuit.

Fairplay and the others not only say the law is an enforceable privacy measure, but also take issue with NetChoice's contention that the California law violates the First Amendment by regulating content.

“Big Tech is not in the market of speech,” the groups write. “It is in the business of extracting personal data from users’ interactions, expressions, and preferences and selling that data to various marketing and advertising companies.”

It's worth noting that tech companies aren't the only ones seeking to block the law. The New York Times Company and Student Press Law Center also argued to Freeman that the law would unconstitutionally restrict news organizations' ability to distribute editorial material to minors, and also wrongly limit teens' ability to access content.

Federal Trade Commissioner Alvaro Bedoya separately defended one aspect of the law. He argues in a friend-of-the-court that Freeman didn't fully consider how the law's privacy provisions could protect children under the age of 13.

He writes that the FTC's experience enforcing the Children's Online Privacy Protection Act (which prohibits web companies' from knowingly collecting personal data from users under 13 without parental permission) shows that companies “take advantage of children’s vulnerabilities to collect information to build increasingly sophisticated profiles on them, and to build commercial relationships with children.”

“The FTC has encountered this most frequently in the context of free online apps that attract children with cute animals or other activities to harvest their data through direct requests or the otherwise invisible collection and sale of their personal information, including persistent identifiers that can be used to track children across the web,” he writes.

He adds that widespread collection and use of children's data can pose risks to their safety, and also allow “third-party companies to develop commercial relationships with children that prey on their trust and vulnerability.”

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