• National Nanny Bill Would Ban Commercial Use of Children's Information
  • September 8, 2004
  • Law Firm: Reed Smith LLP - Pittsburgh Office
  • Both houses of Congress are back on the National Nanny bandwagon, considering federal legislation that would wholesale ban the purchase and sale of personal information regarding children under the age of 16, if intended to be used for commercial marketing purposes.

    Rep. Darlene Hooley (D-Ore.) introduced the Children's Listbroker Privacy Act (H.R. 4955) in the House on July 22. An identical bill was introduced in the Senate in March (S. 2160), by Senators Ron Wyden (D-Ore.), Lisa Murkowski (R-Alaska) and Ted Stevens (R-Alaska).

    Both bills have been referred to committee. The house version, which is identical to the version introduced in the Senate, can be downloaded from http://thomas.loc.gov/.

    The proposed law would make it unlawful to sell personal information about an individual the seller knows to be a child -- defined as anyone under the age of 16 -- as well as to purchase personal information about an individual identified by the seller as a child, for the purposes of marketing to that child.

    The bills provide exceptions for transactions in which parents grant express consent to the sale or purchase of such information, and in instances in which the purchaser certifies to the seller that the purchaser will not use, or permit others to use, the information for commercial marketing to children.

    Several federal laws already restrict the commercial use of information regarding children under certain circumstances, including the No Child Left Behind Act, the Children's Online Privacy Protection Act, and the Family and Educational Rights and Privacy Act.

    But Congress isn't satisfied with what it's already enacted. "[w]hen data on children is collected in a manner that is outside the scope of those statutes...Federal law does not significantly restrict the commercial sale or resale of such data," notes the proposed Children's Listbroker Privacy Act.

    The act calls upon the Federal Trade Commission to enforce its provisions, and also provides enforcement authority to various financial regulatory agencies, such as the Office of the Comptroller of the Currency, Federal Reserve System, and Federal Deposit Insurance Commission.

    Why This Matters: If passed, the act may require significant changes to the way children's products and services are marketed. The act does not prohibit marketing to the parents of children. However, collecting specific demographic and contact information regarding children -- even for the purposes of marketing to their parents rather than the children themselves -- may become risky should these bills become law. Such restrictions raise serious concerns under the First Amendment's protection of truthful commercial speech. The proposed law also fails to establish any evidence of harm to "under 16s" from marketing messages they receive and begs the question whether more targeted marketing may, in fact, improve the information received by the intended audiences.