To regulate interstate commerce by prohibiting the sale of children's personally identifiable information for commercial marketing purposes.

March 3, 2004

Mr. WYDEN (for himself, Mr. Stevens, and Ms. Murkowski) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

To regulate interstate commerce by prohibiting the sale of children's personally identifiable information for commercial marketing purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Children's Listbroker Privacy Act'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Commercial list brokers routinely advertise and sell detailed information on children, including names, addresses, ages, and other data, for use in marketing. This data is commonly available on children as young as two years old, enabling marketers to target specific demographics such as junior high school, elementary school, or even preschool.

(2) Commercially available marketing databases can be very large, covering millions of children.

(3) Commercially available marketing databases can include a variety of information on the children they cover, from ethnicity to family income to hobbies and interests.

(4) Money spent on marketing to children has been estimated at $12 billion per year.

(5) Several Federal statutes, including section 1061 of the No Child Left Behind Act, the Children's Online Privacy Protection Act, and the Family and Educational Rights and Privacy Act, restrict the collection and disclosure of information about children or students under specified circumstances. When data on children is collected in a manner that is outside the scope of those statutes, however, Federal law does not significantly restrict the commercial sale or resale of such data.

(6) The ability to sell information about children to marketers for a profit creates an economic incentive to find new and creative ways to collect and compile such information, and possibly to circumvent or subvert the intent of those federal statutes that do govern the collection of information about children or students. There are a variety of means and sources that marketers and list brokers can and do use to compile names, addresses, and other data about children.

SEC. 3. RESTRICTION ON SALE OR PURCHASE OF CHILDREN'S PERSONAL INFORMATION.

(a) IN GENERAL- It is unlawful--

(1) to sell personal information about an individual the seller knows to be a child;

(2) to purchase personal information about an individual identified by the seller as a child, for the purpose of marketing to that child; or

(3) for a person who has provided a certification pursuant to subsection (b)(2), in connection with the purchase of personal information about an individual identified by the seller as a child, to engage in any practice that violates the terms of the certification.

(b) Exceptions-

(1) PARENTAL CONSENT- Subsection (a) does not apply to any sale, purchase, or use of personal information about a child if the parent of the child has granted express consent to that sale, purchase, or use of the information.

(2) CERTIFICATION- Subsection (a)(1) shall not apply to the sale of personal information about a child if the purchaser certifies to the seller, electronically or in writing, before the sale is completed--

(A) the purpose for which the information will be used by the purchaser; and

(B) that the purchaser will neither--

(i) use the information for marketing that child; nor

(ii) permit the information to be used by others for the purpose of marketing to that child.

SEC. 4. ADMINISTRATION AND ENFORCEMENT.

(a) IN GENERAL- Except as provided in subsection (b), this Act shall be enforced by the Commission as if the violation of section 3 of this Act were an unfair or

deceptive act or practice proscribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

(b) ENFORCEMENT BY CERTAIN OTHER AGENCIES- Compliance with this Act shall be enforced under--

(1) section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the case of--

(A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;

(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 and 611), by the Board; and

(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;

(2) section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), by the Director of the Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation;

(3) the Federal Credit Union Act (12 U.S.C. 1751 et seq.) by the National Credit Union Administration Board with respect to any Federal credit union;

(4) part A of subtitle VII of title 49, United States Code, by the Secretary of Transportation with respect to any air carrier or foreign air carrier subject to that part;

(5) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.) (except as provided in section 406 of that Act (7 U.S.C. 226, 227)), by the Secretary of Agriculture with respect to any activities subject to that Act; and

(6) the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, or production credit association.

(c) EXERCISE OF CERTAIN POWERS- For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of section 3 of this Act I is deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under section 3 of this Act, any other authority conferred on it by law.

(d) ACTIONS BY THE COMMISSION- The Commission shall prevent any person from violating section 3 of this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act. Any entity that violates any provision of that section is subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act in the same manner, by the same means, and with the same jurisdiction, power, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of that section.

(e) PRESERVATION OF COMMISSION AUTHORITY- Nothing contained in this section shall be construed to limit the authority of the Commission under any other provision of law.

SEC. 5. ACTIONS BY STATES.

(a) IN GENERAL-

(1) CIVIL ACTIONS- In any case in which the attorney general of a State has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by the engagement of any person in a practice that section 3 of this Act, the State, as parens patriae, may bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction--

(A) to enjoin that practice;

(B) to enforce compliance with the rule;

(C) to obtain damage, restitution, or other compensation on behalf of residents of the State; or

(D) to obtain such other relief as the court may consider to be appropriate.

(2) NOTICE-

(A) IN GENERAL- Before filing an action under paragraph (1), the attorney general of

the State involved shall provide to the Commission--

(i) written notice of that action; and

(ii) a copy of the complaint for that action.

(B) EXEMPTION-

(i) IN GENERAL- Subparagraph (A) shall not apply with respect to the filing of an action by an attorney general of a State under this subsection, if the attorney general determines that it is not feasible to provide the notice described in that subparagraph before the filing of the action.

(ii) NOTIFICATION- In an action described in clause (i), the attorney general of a State shall provide notice and a copy of the complaint to the Commission at the same time as the attorney general files the action.

(b) INTERVENTION-

(1) IN GENERAL- On receiving notice under subsection (a)(2), the Commission shall have the right to intervene in the action that is the subject of the notice.

(2) EFFECT OF INTERVENTION- If the Commission intervenes in an action under subsection (a), it shall have the right--

(A) to be heard with respect to any matter that arises in that action; and

(B) to file a petition for appeal.

(c) CONSTRUCTION- For purposes of bringing any civil action under subsection (a), nothing in this subtitle shall be construed to prevent an attorney general of a State from exercising the powers conferred on the attorney general by the laws of that State to--

(1) conduct investigations;

(2) administer oaths or affirmations; or

(3) compel the attendance of witnesses or the production of documentary and other evidence.

(d) ACTIONS BY THE COMMISSION- In any case in which an action is instituted by or on behalf of the Commission for violation of section 2 of this Act, no State may, during the pendency of that action, institute an action under subsection (a) against any defendant named in the complaint in that action for violation of that section.

(e) VENUE; SERVICE OF PROCESS-

(1) VENUE- Any action brought under subsection (a) may be brought in the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code.

(2) SERVICE OF PROCESS- In an action brought under subsection (a), process may be served in any district in which the defendant--

(A) is an inhabitant; or

(B) may be found.

SEC. 6. DEFINITIONS.

In this Act:

(1) CHILD- The term `child' means an individual under the age of 16.

(2) COMMISSION- The term `Commission' means the Federal Trade Commission.

(3) Express consent-

(A) IN GENERAL- The term `express consent' means an affirmative indication of permission in writing or electronic form. The term `express consent' does not include consent inferred from a failure to indicate affirmatively that consent is denied or withheld.

(B) PREREQUISITES- Express consent is not valid unless--

(i) before granting the consent the individual granting the consent was informed of the purpose for which the information would be sold, purchased, or used; and

(ii) consent was not granted as a condition for making a product, service, or warranty available to the individual or the child to which the information pertains.

(4) MARKETING- The term `marketing' means making a communication to encourage the purchase or use of a commercial product or service. For purposes of this paragraph, a product or service shall be considered to be commercial if some or all of the proceeds from the sale inure to the benefit of an enterprise conducted for profit.

(5) PARENT- The term `parent' includes a legal guardian.

(6) PERSONAL INFORMATION- The term `personal information' means identifiable information about an individual, including--

(A) a name;

(B) a home or other physical address including street name and name of a city or town;

(C) an e-mail address or online username;

(D) a telephone number;

(E) a Social Security number; or

(F) any other information that permits a specific individual to be identified.

(7) PURCHASE; SELL; SALE- In section 3, the terms `purchase', `sell', and `sale' include the purchase and sale of the right to use personal information, without regard to whether--

(A) the right is limited or unlimited;

(B) the transaction is characterized as a purchase, sale, lease, or otherwise; and

(C) the consideration for the transaction is monetary, goods, or services.

SEC. 7. EFFECTIVE DATE.

This Act takes effect 6 months after the date of enactment.

END