II 

113TH CONGRESS 

2D SESSION S. 2378 

To establish a regulatory framework for the comprehensive protection of 

personal data for individuals under the aegis of the Federal Trade 

Commission, to amend the Children’s Online Privacy Protection Act 

of 1998 to improve provisions relating to collection, use, and disclosure 

of personal information of children, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2014 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To establish a regulatory framework for the comprehensive 

protection of personal data for individuals under the 

aegis of the Federal Trade Commission, to amend the 

Children’s Online Privacy Protection Act of 1998 to improve provisions relating to collection, use, and disclosure 

of personal information of children, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. TABLE OF CONTENTS. 

4 The table of contents for this Act is as follows: 

Sec. 1. Table of contents. 


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TITLE I—COMMERCIAL PRIVACY 

Sec. 101. Short title. 

Sec. 102. Findings. 

Sec. 103. Definitions. 

Subtitle A—Right to Security and Accountability 

Sec. 111. Security. 

Sec. 112. Accountability. 

Sec. 113. Privacy by design. 

Subtitle B—Right to Notice and Individual Participation 

Sec. 121. Transparent notice of practices and purposes. 

Sec. 122. Individual participation. 

Subtitle C—Rights Relating to Data Minimization, Constraints on 

Distribution, and Data Integrity 

Sec. 131. Data minimization. 

Sec. 132. Constraints on distribution of information. 

Sec. 133. Data integrity. 

Subtitle D—Right to Notice of Breaches of Security 

Sec. 141. Definitions. 

Sec. 142. Notice to individuals. 

Sec. 143. Notice to law enforcement. 

Subtitle E—Enforcement 

Sec. 151. General application. 

Sec. 152. Enforcement by the Federal Trade Commission. 

Sec. 153. Enforcement by Attorney General. 

Sec. 154. Enforcement by States. 

Sec. 155. Civil penalties. 

Sec. 156. Effect on other laws. 

Sec. 157. No private right of action. 

Subtitle F—Co-Regulatory Safe Harbor Programs 

Sec. 161. Establishment of safe harbor programs. 

Sec. 162. Participation in safe harbor program. 

Subtitle G—Application With Other Federal Laws 

Sec. 171. Application with other Federal laws. 

Subtitle H—Development of Commercial Data Privacy Policy in the 

Department of Commerce 

Sec. 181. Direction to develop commercial data privacy policy. 

TITLE II—ONLINE PRIVACY OF CHILDREN 

Sec. 201. Short title. 

Sec. 202. Findings. 

Sec. 203. Definitions. 


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Sec. 204. Online collection, use, and disclosure of personal information of children. 

Sec. 205. Targeted marketing to children or minors. 

Sec. 206. Digital Marketing Bill of Rights for Teens and Fair Information 

Practices Principles. 

Sec. 207. Online collection of geolocation information of children and minors. 

Sec. 208. Removal of content. 

Sec. 209. Enforcement and applicability. 

Sec. 210. Rule for treatment of users of websites, services, and applications directed to children or minors. 

Sec. 211. Effective dates. 

1 TITLE I—COMMERCIAL PRIVACY 

2 SEC. 101. SHORT TITLE. 

3 This title may be cited as the ‘‘Commercial Privacy 

4 Bill of Rights Act of 2014’’. 

5 SEC. 102. FINDINGS. 

6 The Congress finds the following: 

7 (1) Personal privacy is worthy of protection 

8 through appropriate legislation. 

9 (2) Trust in the treatment of personally identi10 fiable information collected on and off the Internet 

11 is essential for businesses to succeed. 

12 (3) Persons interacting with others engaged in 

13 interstate commerce have a significant interest in 

14 their personal information, as well as a right to con15 trol how that information is collected, used, stored, 

16 or transferred. 

17 (4) Persons engaged in interstate commerce 

18 and collecting personally identifiable information on 

19 individuals have a responsibility to treat that inforVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 mation with respect and in accordance with common 

2 standards. 

3 (5) On the day before the date of the enactment 

4 of this Act, the laws of the Federal Government and 

5 State and local governments provided inadequate 

6 privacy protection for individuals engaging in and 

7 interacting with persons engaged in interstate com8 merce. 

9 (6) As of the day before the date of the enact10 ment of this Act, with the exception of Federal 

11 Trade Commission enforcement of laws against un12 fair and deceptive practices, the Federal Government 

13 has eschewed general commercial privacy laws in 

14 favor of industry self-regulation, which has led to 

15 several self-policing schemes, some of which are en16 forceable, and some of which provide insufficient pri17 vacy protection to individuals. 

18 (7) As of the day before the date of the enact19 ment of this Act, many collectors of personally iden20 tifiable information have yet to provide baseline fair 

21 information practice protections for individuals. 

22 (8) The ease of gathering and compiling per23 sonal information on the Internet and off, both 

24 overtly and surreptitiously, is becoming increasingly 

25 efficient and effortless due to advances in technology 


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1 which have provided information gatherers the abil2 ity to compile seamlessly highly detailed personal 

3 histories of individuals. 

4 (9) Personal information requires greater pri5 vacy protection than is available on the day before 

6 the date of the enactment of this Act. Vast amounts 

7 of personal information, including sensitive informa8 tion, about individuals are collected on and off the 

9 Internet, often combined and sold or otherwise 

10 transferred to third parties, for purposes unknown 

11 to an individual to whom the personally identifiable 

12 information pertains. 

13 (10) Toward the close of the 20th century, as 

14 individuals’ personal information was increasingly 

15 collected, profiled, and shared for commercial pur16 poses, and as technology advanced to facilitate these 

17 practices, Congress enacted numerous statutes to 

18 protect privacy. 

19 (11) Those statutes apply to the government, 

20 telephones, cable television, e-mail, video tape rent21 als, and the Internet (but only with respect to chil22 dren and law enforcement requests). 

23 (12) As in those instances, the Federal Govern24 ment has a substantial interest in creating a level 

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1 sonally identifiable information, both in the United 

2 States and abroad. 

3 (13) Enhancing individual privacy protection in 

4 a balanced way that establishes clear, consistent 

5 rules, both domestically and internationally, will 

6 stimulate commerce by instilling greater consumer 

7 confidence at home and greater confidence abroad as 

8 more and more entities digitize personally identifi9 able information, whether collected, stored, or used 

10 online or offline. 

11 SEC. 103. DEFINITIONS. 

12 (a) IN GENERAL.—Subject to subsection (b), in this 

13 title: 

14 (1) COMMISSION.—The term ‘‘Commission’’ 

15 means the Federal Trade Commission. 

16 (2) COVERED ENTITY.—The term ‘‘covered en17 tity’’ means any person to whom this title applies 

18 under section 151. 

19 (3) COVERED INFORMATION.— 

20 (A) IN GENERAL.—Except as provided in 

21 subparagraph (B), the term ‘‘covered informa22 tion’’ means only the following: 

23 (i) Personally identifiable information. 

24 (ii) Unique identifier information. 


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1 (iii) Any information that is collected, 

2 used, or stored in connection with person3 ally identifiable information or unique 

4 identifier information in a manner that 

5 may reasonably be used by the party col6 lecting the information to identify a spe7 cific individual. 

8 (B) EXCEPTION.—The term ‘‘covered in9 formation’’ does not include the following: 

10 (i) Personally identifiable information 

11 obtained from public records that is not 

12 merged with covered information gathered 

13 elsewhere. 

14 (ii) Personally identifiable information 

15 that is obtained from a forum— 

16 (I) where the individual volun17 tarily shared the information or au18 thorized the information to be shared; 

19 and 

20 (II) that— 

21 (aa) is widely and publicly 

22 available and was not made pub23 licly available in bad faith; and 


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1 (bb) contains no restrictions 

2 on who can access and view such 

3 information. 

4 (iii) Personally identifiable informa5 tion reported in public media. 

6 (iv) Personally identifiable informa7 tion dedicated to contacting an individual 

8 at the individual’s place of work. 

9 (4) ESTABLISHED BUSINESS RELATIONSHIP.— 

10 The term ‘‘established business relationship’’ means, 

11 with respect to a covered entity and a person, a rela12 tionship formed with or without the exchange of con13 sideration, involving the establishment of an account 

14 by the person with the covered entity for the receipt 

15 of products or services offered by the covered entity. 

16 (5) PERSONALLY IDENTIFIABLE INFORMA17 TION.—The term ‘‘personally identifiable informa18 tion’’ means only the following: 

19 (A) Any of the following information about 

20 an individual: 

21 (i) The first name (or initial) and last 

22 name of an individual, whether given at 

23 birth or time of adoption, or resulting from 

24 a lawful change of name. 


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1 (ii) The postal address of a physical 

2 place of residence of such individual. 

3 (iii) An e-mail address. 

4 (iv) A telephone number or mobile de5 vice number. 

6 (v) A social security number or other 

7 government issued identification number 

8 issued to such individual. 

9 (vi) The account number of a credit 

10 card issued to such individual. 

11 (vii) Unique identifier information 

12 that alone can be used to identify a spe13 cific individual. 

14 (viii) Biometric data about such indi15 vidual, including fingerprints and retina 

16 scans. 

17 (B) If used, transferred, or stored in con18 nection with 1 or more of the items of informa19 tion described in subparagraph (A), any of the 

20 following: 

21 (i) A date of birth. 

22 (ii) The number of a certificate of 

23 birth or adoption. 

24 (iii) A place of birth. 


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1 (iv) Unique identifier information that 

2 alone cannot be used to identify a specific 

3 individual. 

4 (v) Precise geographic location, at the 

5 same degree of specificity as a global posi6 tioning system or equivalent system, and 

7 not including any general geographic infor8 mation that may be derived from an Inter9 net Protocol address. 

10 (vi) Information about an individual’s 

11 quantity, technical configuration, type, des12 tination, location, and amount of uses of 

13 voice services, regardless of technology 

14 used. 

15 (vii) Any other information concerning 

16 an individual that may reasonably be used 

17 by the party using, collecting, or storing 

18 that information to identify that individual. 

19 (6) SENSITIVE PERSONALLY IDENTIFIABLE IN20 FORMATION.—The term ‘‘sensitive personally identi21 fiable information’’ means— 

22 (A) personally identifiable information 

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1 formation, carries a significant risk of economic 

2 or physical harm; or 

3 (B) information related to— 

4 (i) a particular medical condition or a 

5 health record; or 

6 (ii) the religious affiliation of an indi7 vidual. 

8 (7) THIRD PARTY.— 

9 (A) IN GENERAL.—The term ‘‘third party’’ 

10 means, with respect to a covered entity, a per11 son that— 

12 (i) is— 

13 (I) not related to the covered en14 tity by common ownership or cor15 porate control; or 

16 (II) related to the covered entity 

17 by common ownership or corporate 

18 control and an ordinary consumer 

19 would not understand that the covered 

20 entity and the person were related by 

21 common ownership or corporate con22 trol; 

23 (ii) is not a service provider used by 

24 the covered entity to receive personally 

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1 ally identifiable information in performing 

2 services or functions on behalf of and 

3 under the instruction of the covered entity; 

4 and 

5 (iii) with respect to the collection of 

6 covered information of an individual, does 

7 not have an established business relation8 ship with the individual and does not iden9 tify itself to the individual at the time of 

10 such collection in a clear and conspicuous 

11 manner that is visible to the individual. 

12 (B) COMMON BRANDS.—The term ‘‘third 

13 party’’ may include, with respect to a covered 

14 entity, a person who operates under a common 

15 brand with the covered entity. 

16 (8) UNAUTHORIZED USE.— 

17 (A) IN GENERAL.—The term ‘‘unauthor18 ized use’’ means the use of covered information 

19 by a covered entity or its service provider for 

20 any purpose not authorized by the individual to 

21 whom such information relates. 

22 (B) EXCEPTIONS.—Except as provided in 

23 subparagraph (C), the term ‘‘unauthorized use’’ 

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1 lating to an individual by a covered entity or its 

2 service provider as follows: 

3 (i) To process and enforce a trans4 action or deliver a service requested by 

5 that individual. 

6 (ii) To operate the covered entity that 

7 is providing a transaction or delivering a 

8 service requested by that individual, such 

9 as inventory management, financial report10 ing and accounting, planning, and product 

11 or service improvement or forecasting. 

12 (iii) To prevent or detect fraud or to 

13 provide for a physically or virtually secure 

14 environment. 

15 (iv) To investigate a possible crime. 

16 (v) That is required by a provision of 

17 law or legal process. 

18 (vi) To market or advertise to an indi19 vidual from a covered entity within the 

20 context of a covered entity’s own Internet 

21 website, services, or products if the covered 

22 information used for such marketing or ad23 vertising was— 

24 (I) collected directly by the cov25 ered entity; or 


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1 (II) shared with the covered enti2 ty— 

3 (aa) at the affirmative re4 quest of the individual; or 

5 (bb) by an entity with which 

6 the individual has an established 

7 business relationship. 

8 (vii) Use that is necessary for the im9 provement of transaction or service deliv10 ery through research, testing, analysis, and 

11 development. 

12 (viii) Use that is necessary for inter13 nal operations, including the following: 

14 (I) Collecting customer satisfac15 tion surveys and conducting customer 

16 research to improve customer service 

17 information. 

18 (II) Information collected by an 

19 Internet website about the visits to 

20 such website and the click-through 

21 rates at such website— 

22 (aa) to improve website 

23 navigation and performance; or 

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1 vidual with the advertising of a 

2 covered entity. 

3 (ix) Use— 

4 (I) by a covered entity with 

5 which an individual has an established 

6 business relationship; 

7 (II) which the individual could 

8 have reasonably expected, at the time 

9 such relationship was established, was 

10 related to a service provided pursuant 

11 to such relationship; and 

12 (III) which does not constitute a 

13 material change in use or practice 

14 from what could have reasonably been 

15 expected. 

16 (C) SAVINGS.—A use of covered informa17 tion regarding an individual by a covered entity 

18 or its service provider may only be excluded 

19 under subparagraph (B) from the definition of 

20 ‘‘unauthorized use’’ under subparagraph (A) if 

21 the use is reasonable and consistent with the 

22 practices and purposes described in the notice 

23 given the individual in accordance with section 

24 121(a)(1). 


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1 (9) UNIQUE IDENTIFIER INFORMATION.—The 

2 term ‘‘unique identifier information’’ means a 

3 unique persistent identifier associated with an indi4 vidual or a networked device, including a customer 

5 number held in a cookie, a user ID, a processor se6 rial number, or a device serial number. 

7 (b) MODIFIED DEFINITION BY RULEMAKING.—If the 

8 Commission determines that a term defined in any of 

9 paragraphs (3) through (8) is not reasonably sufficient to 

10 protect an individual from unfair or deceptive acts or prac11 tices, the Commission may by rule modify such definition 

12 as the Commission considers appropriate to protect such 

13 individual from an unfair or deceptive act or practice to 

14 the extent that the Commission determines will not unrea15 sonably impede interstate commerce. 

16 Subtitle A—Right to Security and 

17 Accountability 

18 SEC. 111. SECURITY. 

19 (a) RULEMAKING REQUIRED.—Not later than 180 

20 days after the date of the enactment of this Act, the Com21 mission shall initiate a rulemaking proceeding to require 

22 each covered entity to carry out security measures to pro23 tect the covered information it collects and maintains. 

24 (b) PROPORTION.—The requirements prescribed 

25 under subsection (a) shall provide for security measures 


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1 that are proportional to the size, type, nature, and sensi2 tivity of the covered information a covered entity collects. 

3 (c) CONSISTENCY.—The requirements prescribed 

4 under subsection (a) shall be consistent with guidance pro5 vided by the Commission and recognized industry prac6 tices for safety and security on the day before the date 

7 of the enactment of this Act. 

8 (d) TECHNOLOGICAL MEANS.—In a rule prescribed 

9 under subsection (a), the Commission may not require a 

10 specific technological means of meeting a requirement. 

11 SEC. 112. ACCOUNTABILITY. 

12 Each covered entity shall, in a manner proportional 

13 to the size, type, and nature of the covered information 

14 it collects— 

15 (1) have managerial accountability, proportional 

16 to the size and structure of the covered entity, for 

17 the adoption and implementation of policies con18 sistent with this title; 

19 (2) have a process to respond to non-frivolous 

20 inquiries from individuals regarding the collection, 

21 use, transfer, or storage of covered information re22 lating to such individuals; and 

23 (3) describe the means of compliance of the cov24 ered entity with the requirements of this Act upon 

25 request from— 


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1 (A) the Commission; or 

2 (B) an appropriate safe harbor program 

3 established under section 151. 

4 SEC. 113. PRIVACY BY DESIGN. 

5 Each covered entity shall, in a manner proportional 

6 to the size, type, and nature of the covered information 

7 that it collects, implement a comprehensive information 

8 privacy program by— 

9 (1) incorporating necessary development proc10 esses and practices throughout the product life cycle 

11 that are designed to safeguard the personally identi12 fiable information that is covered information of in13 dividuals based on— 

14 (A) the reasonable expectations of such in15 dividuals regarding privacy; and 

16 (B) the relevant threats that need to be 

17 guarded against in meeting those expectations; 

18 and 

19 (2) maintaining appropriate management proc20 esses and practices throughout the data life cycle 

21 that are designed to ensure that information systems 

22 comply with— 

23 (A) the provisions of this title; 

24 (B) the privacy policies of a covered entity; 

25 and 


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1 (C) the privacy preferences of individuals 

2 that are consistent with the consent choices and 

3 related mechanisms of individual participation 

4 as described in section 122. 

5 Subtitle B—Right to Notice and 

6 Individual Participation 

7 SEC. 121. TRANSPARENT NOTICE OF PRACTICES AND PUR8 POSES. 

9 (a) IN GENERAL.—Not later than 60 days after the 

10 date of the enactment of this Act, the Commission shall 

11 initiate a rulemaking proceeding to require each covered 

12 entity— 

13 (1) to provide accurate, clear, concise, and 

14 timely notice to individuals of— 

15 (A) the practices of the covered entity re16 garding the collection, use, transfer, and stor17 age of covered information; and 

18 (B) the specific purposes of those prac19 tices; 

20 (2) to provide accurate, clear, concise, and 

21 timely notice to individuals before implementing a 

22 material change in such practices; and 

23 (3) to maintain the notice required by para24 graph (1) in a form that individuals can readily ac25 cess. 


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1 (b) COMPLIANCE AND OTHER CONSIDERATIONS.—In 

2 the rulemaking required by subsection (a), the Commis3 sion— 

4 (1) shall consider the types of devices and 

5 methods individuals will use to access the required 

6 notice; 

7 (2) may provide that a covered entity unable to 

8 provide the required notice when information is col9 lected may comply with the requirement of sub10 section (a)(1) by providing an alternative time and 

11 means for an individual to receive the required no12 tice promptly; 

13 (3) may draft guidance for covered entities to 

14 use in designing their own notice and may include 

15 a draft model template for covered entities to use in 

16 designing their own notice; and 

17 (4) may provide guidance on how to construct 

18 computer-readable notices or how to use other tech19 nology to deliver the required notice. 

20 SEC. 122. INDIVIDUAL PARTICIPATION. 

21 (a) IN GENERAL.—Not later than 180 days after the 

22 date of the enactment of this Act, the Commission shall 

23 initiate a rulemaking proceeding to require each covered 

24 entity— 


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1 (1) to offer individuals a clear and conspicuous 

2 mechanism for opt-in consent for any use of their 

3 covered information that would otherwise be unau4 thorized use; 

5 (2) to offer individuals a robust, clear, and con6 spicuous mechanism for opt-in consent for the use 

7 by third parties of the individuals’ covered informa8 tion for behavioral advertising or marketing; 

9 (3) to provide any individual to whom the per10 sonally identifiable information that is covered infor11 mation pertains, and which the covered entity or its 

12 service provider stores, appropriate and reasonable— 

13 (A) access to such information; and 

14 (B) mechanisms to correct such informa15 tion to improve the accuracy of such informa16 tion; and 

17 (4) in the case that a covered entity enters 

18 bankruptcy or an individual requests the termination 

19 of a service provided by the covered entity to the in20 dividual or termination of some other relationship 

21 with the covered entity, to permit the individual to 

22 easily request that— 

23 (A) all of the personally identifiable infor24 mation that is covered information that the cov25 ered entity maintains relating to the individual, 


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1 except for information the individual authorized 

2 the sharing of or which the individual shared 

3 with the covered entity in a forum that is wide4 ly and publicly available, be rendered not per5 sonally identifiable; or 

6 (B) if rendering such information not per7 sonally identifiable is not possible, to cease the 

8 unauthorized use or transfer to a third party 

9 for an unauthorized use of such information or 

10 to cease use of such information for marketing, 

11 unless such unauthorized use or transfer is oth12 erwise required by a provision of law. 

13 (b) UNAUTHORIZED USE TRANSFERS.—In the rule14 making required by subsection (a), the Commission shall 

15 provide that with respect to transfers of covered informa16 tion to a third party for which an individual provides opt17 in consent, the third party to which the information is 

18 transferred may not use such information for any unau19 thorized use other than a use— 

20 (1) specified pursuant to the purposes stated in 

21 the required notice under section 121(a); and 

22 (2) authorized by the individual when the indi23 vidual granted consent for the transfer of the infor24 mation to the third party. 


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1 (c) ALTERNATIVE MEANS TO TERMINATE USE OF

2 COVERED INFORMATION.—In the rulemaking required by 

3 subsection (a), the Commission shall allow a covered entity 

4 to provide individuals an alternative means, in lieu of the 

5 access, consent, and correction requirements, of prohib6 iting a covered entity from use or transfer of that individ7 ual’s covered information. 

8 (d) SERVICE PROVIDERS.— 

9 (1) IN GENERAL.—The use of a service provider 

10 by a covered entity to receive covered information in 

11 performing services or functions on behalf of and 

12 under the instruction of the covered entity does not 

13 constitute an unauthorized use of such information 

14 by the covered entity if the covered entity and the 

15 service provider execute a contract that requires the 

16 service provider to collect, use, and store the infor17 mation on behalf of the covered entity in a manner 

18 consistent with— 

19 (A) the requirements of this title; and 

20 (B) the policies and practices related to 

21 such information of the covered entity. 

22 (2) TRANSFERS BETWEEN SERVICE PROVIDERS

23 FOR A COVERED ENTITY.—The disclosure by a serv24 ice provider of covered information pursuant to a 

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1 vider in order to perform the same service or func2 tions for that covered entity does not constitute an 

3 unauthorized use. 

4 (3) LIABILITY REMAINS WITH COVERED ENTI5 TY.—A covered entity remains responsible and liable 

6 for the protection of covered information that has 

7 been transferred to a service provider for processing, 

8 notwithstanding any agreement to the contrary be9 tween a covered entity and the service provider. 

10 Subtitle C—Rights Relating to Data 

11 Minimization, Constraints on 

12 Distribution, and Data Integrity 

13 SEC. 131. DATA MINIMIZATION. 

14 Each covered entity shall— 

15 (1) collect only as much covered information re16 lating to an individual as is reasonably necessary— 

17 (A) to process or enforce a transaction or 

18 deliver a service requested by such individual; 

19 (B) for the covered entity to provide a 

20 transaction or delivering a service requested by 

21 such individual, such as inventory management, 

22 financial reporting and accounting, planning, 

23 product or service improvement or forecasting, 

24 and customer support and service; 


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1 (C) to prevent or detect fraud or to provide 

2 for a secure environment; 

3 (D) to investigate a possible crime; 

4 (E) to comply with a provision of law; 

5 (F) for the covered entity to market or ad6 vertise to such individual if the covered infor7 mation used for such marketing or advertising 

8 was collected directly by the covered entity; or 

9 (G) for internal operations, including— 

10 (i) collecting customer satisfaction 

11 surveys and conducting customer research 

12 to improve customer service; and 

13 (ii) collection from an Internet website 

14 of information about visits and click15 through rates relating to such website to 

16 improve— 

17 (I) website navigation and per18 formance; and 

19 (II) the customer’s experience; 

20 (2) retain covered information for only such du21 ration as— 

22 (A) with respect to the provision of a 

23 transaction or delivery of a service to an indi24 vidual— 


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1 (i) is necessary to provide such trans2 action or deliver such service to such indi3 vidual; or 

4 (ii) if such service is ongoing, is rea5 sonable for the ongoing nature of the serv6 ice; or 

7 (B) is required by a provision of law; 

8 (3) retain covered information only for the pur9 pose it was collected, or reasonably related purposes; 

10 and 

11 (4) exercise reasonable data retention proce12 dures with respect to both the initial collection and 

13 subsequent retention. 

14 SEC. 132. CONSTRAINTS ON DISTRIBUTION OF INFORMA15 TION. 

16 (a) IN GENERAL.—Each covered entity shall— 

17 (1) require by contract that any third party to 

18 which it transfers covered information use the infor19 mation only for purposes that are consistent with— 

20 (A) the provisions of this title; and 

21 (B) as specified in the contract; 

22 (2) require by contract that such third party 

23 may not combine information that the covered entity 

24 has transferred to it, that relates to an individual, 

25 and that is not personally identifiable information 


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1 with other information in order to identify such indi2 vidual, unless the covered entity has obtained the 

3 opt-in consent of such individual for such combina4 tion and identification; and 

5 (3) before executing a contract with a third 

6 party— 

7 (A) assure through due diligence that the 

8 third party is a legitimate organization; and 

9 (B) in the case of a material violation of 

10 the contract, at a minimum notify the Commis11 sion of such violation. 

12 (b) TRANSFERS TO UNRELIABLE THIRD PARTIES

13 PROHIBITED.—A covered entity may not transfer covered 

14 information to a third party that the covered entity 

15 knows— 

16 (1) has intentionally or willfully violated a con17 tract required by subsection (a); and 

18 (2) is reasonably likely to violate such contract. 

19 (c) APPLICATION OF RULES TO THIRD PARTIES.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), a third party that receives covered infor22 mation from a covered entity shall be subject to the 

23 provisions of this Act as if it were a covered entity. 

24 (2) EXEMPTION.—The Commission may, as it 

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1 ties from liability under any provision of subtitle B 

2 if the Commission finds that— 

3 (A) such class of third parties cannot rea4 sonably comply with such provision; or 

5 (B) with respect to covered information re6 lating to individuals that is transferred to such 

7 class, compliance by such class with such provi8 sion would not sufficiently benefit such individ9 uals. 

10 SEC. 133. DATA INTEGRITY. 

11 (a) IN GENERAL.—Each covered entity shall attempt 

12 to establish and maintain reasonable procedures to ensure 

13 that personally identifiable information that is covered in14 formation and maintained by the covered entity is accu15 rate in those instances where the covered information 

16 could be used to deny consumers benefits or cause signifi17 cant harm. 

18 (b) EXCEPTION.—Subsection (a) shall not apply to 

19 covered information of an individual maintained by a cov20 ered entity that is provided— 

21 (1) directly to the covered entity by the indi22 vidual; 

23 (2) to the covered entity by another entity at 

24 the request of the individual; 

25 (3) to prevent or detect fraud; or 


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1 (4) to provide for a secure environment. 

2 Subtitle D—Right to Notice of 

3 Breaches of Security 

4 SEC. 141. DEFINITIONS. 

5 In this subtitle: 

6 (1) BREACH OF SECURITY.— 

7 (A) IN GENERAL.—The term ‘‘breach of 

8 security’’ means compromise of the security, 

9 confidentiality, or integrity of, or loss of, data 

10 in electronic form that results in, or there is a 

11 reasonable basis to conclude has resulted in, 

12 unauthorized access to or acquisition of person13 ally identifiable information from a covered en14 tity. 

15 (B) EXCLUSIONS.—The term ‘‘breach of 

16 security’’ does not include— 

17 (i) a good faith acquisition of person18 ally identifiable information by a covered 

19 entity, or an employee or agent of a cov20 ered entity, if the personally identifiable in21 formation is not subject to further use or 

22 unauthorized disclosure; 

23 (ii) any lawfully authorized investiga24 tive, protective, or intelligence activity of a 

25 law enforcement or an intelligence agency 


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1 of the United States, a State, or a political 

2 subdivision of a State; or 

3 (iii) the release of a public record not 

4 otherwise subject to confidentiality or non5 disclosure requirements. 

6 (2) DATA IN ELECTRONIC FORM.—The term 

7 ‘‘data in electronic form’’ means any data stored 

8 electronically or digitally on any computer system or 

9 other database, including recordable tapes and other 

10 mass storage devices. 

11 (3) DESIGNATED ENTITY.—The term ‘‘des12 ignated entity’’ means the Federal Government enti13 ty designated by the Secretary of Homeland Security 

14 under section 143(a). 

15 (4) IDENTITY THEFT.—The term ‘‘identity 

16 theft’’ means the unauthorized use of another per17 son’s personally identifiable information for the pur18 pose of engaging in commercial transactions under 

19 the identity of such other person, including any con20 tact that violates section 1028A of title 18, United 

21 States Code. 

22 (5) MAJOR CREDIT REPORTING AGENCY.—The 

23 term ‘‘major credit reporting agency’’ means a con24 sumer reporting agency that compiles and maintains 

25 files on consumers on a nationwide basis within the 


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1 meaning of section 603(p) of the Fair Credit Re2 porting Act (15 U.S.C. 1681a(p)). 

3 (6) SERVICE PROVIDER.—The term ‘‘service 

4 provider’’ means a person that provides electronic 

5 data transmission, routing, intermediate and tran6 sient storage, or connections to its system or net7 work, where the person providing such services does 

8 not select or modify the content of the electronic 

9 data, is not the sender or the intended recipient of 

10 the data, and does not differentiate personally iden11 tifiable information from other information that 

12 such person transmits, routes, or stores, or for 

13 which such person provides connections. Any such 

14 person shall be treated as a service provider under 

15 this subtitle only to the extent that it is engaged in 

16 the provision of such transmission, routing, inter17 mediate and transient storage, or connections. 

18 SEC. 142. NOTICE TO INDIVIDUALS. 

19 (a) IN GENERAL.—A covered entity that owns or pos20 sesses data in electronic form containing personally identi21 fiable information, following the discovery of a breach of 

22 security of the system maintained by the covered entity 

23 that contains such information, shall notify— 

24 (1) each individual who is a citizen or resident 

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1 able information has been, or is reasonably believed 

2 to have been, acquired or accessed from the covered 

3 entity as a result of the breach of security; and 

4 (2) the Commission, unless the covered entity 

5 has notified the designated entity under section 143. 

6 (b) SPECIAL NOTIFICATION REQUIREMENTS.— 

7 (1) THIRD PARTIES.—In the event of a breach 

8 of security of a system maintained by a third party 

9 that has been contracted to maintain or process data 

10 in electronic form containing personally identifiable 

11 information on behalf of a covered entity who owns 

12 or possesses such data, the third party shall notify 

13 the covered entity of the breach of security. 

14 (2) SERVICE PROVIDERS.—If a service provider 

15 becomes aware of a breach of security of data in 

16 electronic form containing personally identifiable in17 formation that is owned or possessed by another cov18 ered entity that connects to or uses a system or net19 work provided by the service provider for the pur20 pose of transmitting, routing, or providing inter21 mediate or transient storage of such data, the serv22 ice provider shall notify of the breach of security 

23 only the covered entity who initiated such connec24 tion, transmission, routing, or storage if such cov25 ered entity can be reasonably identified. 


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1 (3) COORDINATION OF NOTIFICATION WITH

2 CREDIT REPORTING AGENCIES.— 

3 (A) IN GENERAL.—If a covered entity is 

4 required to provide notification to more than 

5 5,000 individuals under subsection (a)(1), the 

6 covered entity also shall notify each major cred7 it reporting agency of the timing and distribu8 tion of the notices, except when the only per9 sonally identifiable information that is the sub10 ject of the breach of security is the individual’s 

11 first name or initial and last name, or address, 

12 or phone number, in combination with a credit 

13 or debit card number, and any required security 

14 code. 

15 (B) NOTICE TO CREDIT REPORTING AGEN16 CIES BEFORE INDIVIDUALS.—Such notice shall 

17 be given to each credit reporting agency without 

18 unreasonable delay and, if it will not delay no19 tice to the affected individuals, prior to the dis20 tribution of notices to the affected individuals. 

21 (c) TIMELINESS OF NOTIFICATION.— 

22 (1) IN GENERAL.—All notifications required 

23 under this section shall be made without unreason24 able delay following the discovery by the covered en25 tity of a security breach. 


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1 (2) REASONABLE DELAY.— 

2 (A) IN GENERAL.—Reasonable delay under 

3 this subsection may include any time necessary 

4 to determine the scope of the security breach, 

5 prevent further disclosures, restore the reason6 able integrity of the data system, and provide 

7 notice to law enforcement when required. 

8 (B) EXTENSION.— 

9 (i) IN GENERAL.—Except as provided 

10 in subsection (d), delay of notification shall 

11 not exceed 60 days following the discovery 

12 of the security breach, unless the covered 

13 entity requests an extension of time and 

14 the Commission determines in writing that 

15 additional time is reasonably necessary to 

16 determine the scope of the security breach, 

17 prevent further disclosures, restore the rea18 sonable integrity of the data system, or to 

19 provide notice to the designated entity. 

20 (ii) APPROVAL OF REQUEST.—If the 

21 Commission approves the request for delay, 

22 the covered entity may delay the period for 

23 notification for additional periods of up to 

24 30 days. 


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1 (3) BURDEN OF PRODUCTION.—The covered 

2 entity, third party, or service provider required to 

3 provide notice under this title shall, upon the request 

4 of the Commission provide records or other evidence 

5 of the notifications required under this subtitle, in6 cluding to the extent applicable, the reasons for any 

7 delay of notification. 

8 (d) METHOD AND CONTENT OF NOTIFICATION.— 

9 (1) DIRECT NOTIFICATION.— 

10 (A) METHOD OF DIRECT NOTIFICATION.— 

11 Except as provided in paragraph (2), a covered 

12 entity shall be in compliance with the notifica13 tion requirement under subsection (a)(1) if— 

14 (i) the covered entity provides con15 spicuous and clearly identified notifica16 tion— 

17 (I) in writing; or 

18 (II) by e-mail or other electronic 

19 means if— 

20 (aa) the covered entity’s pri21 mary method of communication 

22 with the individual is by e-mail or 

23 such other electronic means; or 

24 (bb) the individual has con25 sented to receive notification by 


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1 e-mail or such other electronic 

2 means and such notification is 

3 provided in a manner that is con4 sistent with the provisions per5 mitting electronic transmission of 

6 notices under section 101 of the 

7 Electronic Signatures in Global 

8 and National Commerce Act (15 

9 U.S.C. 7001); and 

10 (ii) the method of notification selected 

11 under clause (i) can reasonably be expected 

12 to reach the intended individual. 

13 (B) CONTENT OF DIRECT NOTIFICA14 TION.—Each method of notification under sub15 paragraph (A) shall include the following: 

16 (i) The date, estimated date, or esti17 mated date range of the breach of security. 

18 (ii) A description of the personally 

19 identifiable information that was or is rea20 sonably believed to have been acquired or 

21 accessed as a result of the breach of secu22 rity. 

23 (iii) A telephone number that an indi24 vidual can use at no cost to the individual 

25 to contact the covered entity to inquire 


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1 about the breach of security or the infor2 mation the covered entity maintained 

3 about that individual. 

4 (iv) Notice that the individual may be 

5 entitled to consumer credit reports under 

6 subsection (e)(1). 

7 (v) Instructions how an individual can 

8 request consumer credit reports under sub9 section (e)(1). 

10 (vi) A telephone number, that an indi11 vidual can use at no cost to the individual, 

12 and an address to contact each major cred13 it reporting agency. 

14 (vii) A telephone number, that an in15 dividual can use at no cost to the indi16 vidual, and an Internet website address to 

17 obtain information regarding identity theft 

18 from the Commission. 

19 (2) SUBSTITUTE NOTIFICATION.— 

20 (A) CIRCUMSTANCES GIVING RISE TO SUB21 STITUTE NOTIFICATION.—A covered entity re22 quired to provide notification to individuals 

23 under subsection (a)(1) may provide notifica24 tion under this paragraph instead of paragraph 

25 (1) of this subsection if— 


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1 (i) notification under paragraph (1) is 

2 not feasible due to lack of sufficient con3 tact information for the individual required 

4 to be notified; or 

5 (ii) the covered entity owns or pos6 sesses data in electronic form containing 

7 personally identifiable information of fewer 

8 than 10,000 individuals and direct notifica9 tion is not feasible due to excessive cost to 

10 the covered entity required to provide such 

11 notification relative to the resources of 

12 such covered entity, as determined in ac13 cordance with the regulations issued by the 

14 Commission under paragraph (3)(A). 

15 (B) METHOD OF SUBSTITUTE NOTIFICA16 TION.—Notification under this paragraph shall 

17 include the following: 

18 (i) Conspicuous and clearly identified 

19 notification by e-mail to the extent the cov20 ered entity has an e-mail address for an in21 dividual who is entitled to notification 

22 under subsection (a)(1). 

23 (ii) Conspicuous and clearly identified 

24 notification on the Internet website of the 


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1 covered entity if the covered entity main2 tains an Internet website. 

3 (iii) Notification to print and to 

4 broadcast media, including major media in 

5 metropolitan and rural areas where the in6 dividuals whose personally identifiable in7 formation was acquired or accessed reside. 

8 (C) CONTENT OF SUBSTITUTE NOTIFICA9 TION.—Each method of notification under this 

10 paragraph shall include the following: 

11 (i) The date, estimated date, or esti12 mated date range of the breach of security. 

13 (ii) A description of the types of per14 sonally identifiable information that were 

15 or are reasonably believed to have been ac16 quired or accessed as a result of the breach 

17 of security. 

18 (iii) Notice that an individual may be 

19 entitled to consumer credit reports under 

20 subsection (e)(1). 

21 (iv) Instructions how an individual 

22 can request consumer credit reports under 

23 subsection (e)(1). 

24 (v) A telephone number that an indi25 vidual can use at no cost to the individual 


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1 to learn whether the individual’s personally 

2 identifiable information is included in the 

3 breach of security. 

4 (vi) A telephone number, that an indi5 vidual can use at no cost to the individual, 

6 and an address to contact each major cred7 it reporting agency. 

8 (vii) A telephone number, that an in9 dividual can use at no cost to the indi10 vidual, and an Internet website address to 

11 obtain information from the Commission 

12 regarding identity theft. 

13 (3) REGULATIONS AND GUIDANCE.— 

14 (A) REGULATIONS CONCERNING SUB15 STITUTE NOTIFICATION.— 

16 (i) IN GENERAL.—Not later than 1 

17 year after the date of the enactment of this 

18 Act, the Commission shall prescribe cri19 teria for determining circumstances under 

20 which notification may be provided under 

21 paragraph (2), including criteria for deter22 mining whether providing notification 

23 under paragraph (1) is not feasible due to 

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1 quired to provide such notification relative 

2 to the resources of such covered entity. 

3 (ii) OTHER CIRCUMSTANCES.—The 

4 regulations required by clause (i) may also 

5 identify other circumstances in which noti6 fication under paragraph (2) would be ap7 propriate, including circumstances under 

8 which the cost of providing direct notifica9 tion exceeds the benefits to individuals. 

10 (B) GUIDANCE.— 

11 (i) IN GENERAL.—The Commission, in 

12 consultation with the Administrator of the 

13 Small Business Administration, shall pub14 lish and otherwise make available general 

15 guidance with respect to compliance with 

16 this subsection. 

17 (ii) CONTENTS.—The guidance re18 quired by clause (i) shall include the fol19 lowing: 

20 (I) A description of written or e21 mail notification that complies with 

22 paragraph (1). 

23 (II) Guidance on the content of 

24 notification under paragraph (2), in25 cluding the extent of notification to 


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1 print and broadcast media that com2 plies with subparagraph (B)(iii) of 

3 such paragraph. 

4 (e) OTHER OBLIGATIONS FOLLOWING BREACH.— 

5 (1) IN GENERAL.—Subject to the provisions of 

6 this subsection, not later than 60 days after the date 

7 of a request by an individual who received notifica8 tion under subsection (a)(1) and quarterly thereafter 

9 for 2 years, a covered entity required to provide no10 tification under such subsection to such individual 

11 shall provide, or arrange for the provision of, to such 

12 individual at no cost to such individual, consumer 

13 credit reports from at least 1 major credit reporting 

14 agency. 

15 (2) LIMITATION.—Paragraph (1) shall not 

16 apply if the only personally identifiable information 

17 that is the subject of the breach of security is the 

18 individual’s first name or initial and last name, or 

19 address, or phone number, in combination with a 

20 credit or debit card number, and any required secu21 rity code. 

22 (3) RULEMAKING.—Not later than 1 year after 

23 the date of the enactment of this Act, the Commis24 sion shall prescribe the following: 


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1 (A) Criteria for determining the cir2 cumstances under which a covered entity re3 quired to provide notification under subsection 

4 (a)(1) must provide or arrange for the provision 

5 of free consumer credit reports under this sub6 section. 

7 (B) A simple process under which a cov8 ered entity that is a small business concern or 

9 small nonprofit organization may request a full 

10 or a partial waiver or a modified or an alter11 native means of complying with this subsection 

12 if providing free consumer credit reports is not 

13 feasible due to excessive costs relative to the re14 sources of such covered entity and relative to 

15 the level of harm, to affected individuals, 

16 caused by the breach of security. 

17 (4) DEFINITIONS.—In this subsection: 

18 (A) SMALL BUSINESS CONCERN.—The 

19 term ‘‘small business concern’’ has the meaning 

20 given such term under section 3 of the Small 

21 Business Act (15 U.S.C. 632). 

22 (B) SMALL NONPROFIT ORGANIZATION.— 

23 The term ‘‘small nonprofit organization’’ has 

24 the meaning the Commission shall give such 

25 term for purposes of this subsection. 


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1 (f) DELAY OF NOTIFICATION AUTHORIZED FOR NA2 TIONAL SECURITY AND LAW ENFORCEMENT PUR3 POSES.— 

4 (1) IN GENERAL.—If the United States Secret 

5 Service or the Federal Bureau of Investigation de6 termines that notification under this section would 

7 impede a criminal investigation or a national secu8 rity activity, such notification shall be delayed upon 

9 written notice from the United States Secret Service 

10 or the Federal Bureau of Investigation to the cov11 ered entity that experienced the breach of security. 

12 The notification from the United States Secret Serv13 ice or the Federal Bureau of Investigation shall 

14 specify the period of delay requested for national se15 curity or law enforcement purposes. 

16 (2) SUBSEQUENT DELAY OF NOTIFICATION.— 

17 (A) IN GENERAL.—If the notification re18 quired under subsection (a)(1) is delayed pursu19 ant to paragraph (1), a covered entity shall give 

20 notice not more than 30 days after the day 

21 such law enforcement or national security delay 

22 was invoked unless a Federal law enforcement 

23 or intelligence agency provides written notifica24 tion that further delay is necessary. 


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1 (B) WRITTEN JUSTIFICATION REQUIRE2 MENTS.— 

3 (i) UNITED STATES SECRET SERV4 ICE.—If the United States Secret Service 

5 instructs a covered entity to delay notifica6 tion under this section beyond the 30-day 

7 period set forth in subparagraph (A) (re8 ferred to in this clause as ‘‘subsequent 

9 delay’’), the United States Secret Service 

10 shall submit written justification for the 

11 subsequent delay to the Secretary of 

12 Homeland Security before the subsequent 

13 delay begins. 

14 (ii) FEDERAL BUREAU OF INVESTIGA15 TION.—If the Federal Bureau of Investiga16 tion instructs a covered entity to delay no17 tification under this section beyond the 30- 

18 day period set forth in subparagraph (A) 

19 (referred to in this clause as ‘‘subsequent 

20 delay’’), the Federal Bureau of Investiga21 tion shall submit written justification for 

22 the subsequent delay to the Attorney Gen23 eral before the subsequent delay begins. 

24 (3) LAW ENFORCEMENT IMMUNITY.—No cause 

25 of action shall lie in any court against any Federal 


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1 agency for acts relating to the delay of notification 

2 for national security or law enforcement purposes 

3 under this subtitle. 

4 (g) GENERAL EXEMPTION.— 

5 (1) IN GENERAL.—A covered entity shall be ex6 empt from the requirements under this section if, 

7 following a breach of security, the covered entity 

8 reasonably concludes that there is no reasonable risk 

9 of identity theft, fraud, or other unlawful conduct. 

10 (2) FTC GUIDANCE.—Not later than 1 year 

11 after the date of the enactment of this Act, the 

12 Commission, after consultation with the Director of 

13 the National Institute of Standards and Technology, 

14 shall issue guidance regarding the application of the 

15 exemption under paragraph (1). 

16 (h) EXEMPTIONS FOR NATIONAL SECURITY AND

17 LAW ENFORCEMENT PURPOSES.— 

18 (1) IN GENERAL.—A covered entity shall be ex19 empt from the notice requirements under this sec20 tion if— 

21 (A) a determination is made— 

22 (i) by the United States Secret Serv23 ice or the Federal Bureau of Investigation 

24 that notification of the breach of security 

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1 sitive sources and methods or similarly im2 pede the ability of the Government to con3 duct law enforcement or intelligence inves4 tigations; or 

5 (ii) by the Federal Bureau of Inves6 tigation that notification of the breach of 

7 security could be reasonably expected to 

8 cause damage to the national security; and 

9 (B) the United States Secret Service or the 

10 Federal Bureau of Investigation, as the case 

11 may be, provides written notice of its deter12 mination under subparagraph (A) to the cov13 ered entity. 

14 (2) UNITED STATES SECRET SERVICE.—If the 

15 United States Secret Service invokes an exemption 

16 under paragraph (1), the United States Secret Serv17 ice shall submit written justification for invoking the 

18 exemption to the Secretary of Homeland Security 

19 before the exemption is invoked. 

20 (3) FEDERAL BUREAU OF INVESTIGATION.—If 

21 the Federal Bureau of Investigation invokes an ex22 emption under paragraph (1), the Federal Bureau of 

23 Investigation shall submit written justification for 

24 invoking the exemption to the Attorney General be25 fore the exemption is invoked. 


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1 (4) IMMUNITY.—No cause of action shall lie in 

2 any court against any Federal agency for acts relat3 ing to the exemption from notification for national 

4 security or law enforcement purposes under this sub5 title. 

6 (5) REPORTS.—Not later than 540 days after 

7 the date of the enactment of this Act, and upon re8 quest by Congress thereafter, the United States Se9 cret Service and the Federal Bureau of Investigation 

10 shall submit to Congress a report on the number 

11 and nature of breaches of security subject to the ex12 emptions for national security and law enforcement 

13 purposes under this subsection. 

14 (i) FINANCIAL FRAUD PREVENTION EXEMPTION.— 

15 (1) IN GENERAL.—A covered entity shall be ex16 empt from the notice requirements under this sec17 tion if the covered entity utilizes or participates in 

18 a security program that— 

19 (A) effectively blocks the use of the person20 ally identifiable information to initiate an unau21 thorized financial transaction before it is 

22 charged to the account of the individual; and 

23 (B) provides notice to each affected indi24 vidual after a breach of security that resulted in 


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1 attempted fraud or an attempted unauthorized 

2 transaction. 

3 (2) LIMITATIONS.—An exemption under para4 graph (1) shall not apply if— 

5 (A) the breach of security includes person6 ally identifiable information, other than a credit 

7 card number or credit card security code, of 

8 any type; or 

9 (B) the breach of security includes both 

10 the individual’s credit card number and the in11 dividual’s first and last name. 

12 (j) FINANCIAL INSTITUTIONS REGULATED BY FED13 ERAL FUNCTIONAL REGULATORS.— 

14 (1) IN GENERAL.—A covered financial institu15 tion shall be deemed in compliance with this section 

16 if— 

17 (A) the Federal functional regulator with 

18 jurisdiction over the covered financial institu19 tion has issued a standard by regulation or 

20 guideline under title V of the Gramm-Leach21 Bliley Act (15 U.S.C. 6801 et seq.) that— 

22 (i) requires financial institutions with23 in its jurisdiction to provide notification to 

24 individuals following a breach of security; 

25 and 


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1 (ii) provides protections substantially 

2 similar to, or greater than, those required 

3 under this Act; and 

4 (B) the covered financial institution is in 

5 compliance with the standard under subpara6 graph (A). 

7 (2) DEFINITIONS.—In this subsection: 

8 (A) COVERED FINANCIAL INSTITUTION.— 

9 The term ‘‘covered financial institution’’ means 

10 a financial institution that is subject to— 

11 (i) the data security requirements of 

12 the Gramm-Leach-Bliley Act (15 U.S.C. 

13 6801 et seq.); 

14 (ii) any implementing standard issued 

15 by regulation or guideline issued under 

16 that Act; and 

17 (iii) the jurisdiction of a Federal func18 tional regulator under that Act. 

19 (B) FEDERAL FUNCTIONAL REGULATOR.— 

20 The term ‘‘Federal functional regulator’’ has 

21 the meaning given the term in section 509 of 

22 the Gramm-Leach-Bliley Act (15 U.S.C. 6809). 

23 (C) FINANCIAL INSTITUTION.—The term 

24 ‘‘financial institution’’ has the meaning given 


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1 the term in section 509 of the Gramm-Leach2 Bliley Act (15 U.S.C. 6809). 

3 (k) EXEMPTION; HEALTH PRIVACY.— 

4 (1) COVERED ENTITY OR BUSINESS ASSOCIATE

5 UNDER HITECH ACT.—To the extent that a covered 

6 entity under this section acts as a covered entity or 

7 a business associate under section 13402 of the 

8 Health Information Technology for Economic and 

9 Clinical Health Act (42 U.S.C. 17932), has the obli10 gation to provide notification to individuals following 

11 a breach of security under that Act or its imple12 menting regulations, and is in compliance with that 

13 obligation, the covered entity shall be deemed in 

14 compliance with this section. 

15 (2) ENTITY SUBJECT TO HITECH ACT.—To the 

16 extent that a covered entity under this section acts 

17 as a vendor of personal health records, a third party 

18 service provider, or other entity subject to section 

19 13407 of the Health Information Technology for Ec20 onomical and Clinical Health Act (42 U.S.C. 

21 17937), has the obligation to provide notification to 

22 individuals following a breach of security under that 

23 Act or its implementing regulations, and is in com24 pliance with that obligation, the covered entity shall 

25 be deemed in compliance with this section. 


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1 (3) LIMITATION OF STATUTORY CONSTRUC2 TION.—Nothing in this subtitle may be construed in 

3 any way to give effect to the sunset provision under 

4 section 13407(g)(2) of the Health Information Tech5 nology for Economic and Clinical Health Act (42 

6 U.S.C. 17937(g)(2)) or to otherwise limit or affect 

7 the applicability, under section 13407 of that Act, of 

8 the requirement to provide notification to individuals 

9 following a breach of security for vendors of personal 

10 health records and each entity described in clause 

11 (ii), (iii), or (iv) of section 13424(b)(1)(A) of that 

12 Act (42 U.S.C. 17953(b)(1)(A)). 

13 (l) INTERNET WEBSITE NOTICE OF FEDERAL TRADE

14 COMMISSION.—If the Commission, upon receiving notifi15 cation of any breach of security that is reported to the 

16 Commission, finds that notification of the breach of secu17 rity via the Commission’s Internet website would be in the 

18 public interest or for the protection of consumers, the 

19 Commission shall place such a notice in a clear and con20 spicuous location on its Internet website. 

21 (m) FTC STUDY ON NOTIFICATION IN LANGUAGES

22 IN ADDITION TO ENGLISH.—Not later than 1 year after 

23 the date of the enactment of this Act, the Commission 

24 shall conduct a study on the feasibility and advisability 

25 of requiring notification provided pursuant to subsection 


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1 (d)(1) to be provided in a language in addition to English 

2 to individuals known to speak only such other language. 

3 SEC. 143. NOTICE TO LAW ENFORCEMENT. 

4 (a) DESIGNATION OF GOVERNMENT ENTITY TO RE5 CEIVE NOTICE.—Not later than 60 days after the date 

6 of the enactment of this Act, the Secretary of Homeland 

7 Security shall designate a Federal Government entity to 

8 receive notice under this section. 

9 (b) NOTICE TO DESIGNATED ENTITY.—A covered en10 tity shall notify the designated entity of a breach of secu11 rity if— 

12 (1) the number of individuals whose personally 

13 identifiable information was, or is reasonably be14 lieved to have been, acquired or accessed as a result 

15 of the breach of security exceeds 10,000; 

16 (2) the breach of security involves a database, 

17 networked or integrated databases, or other data 

18 system containing the personally identifiable infor19 mation of more than 1,000,000 individuals; 

20 (3) the breach of security involves databases 

21 owned by the Federal Government; or 

22 (4) the breach of security involves primarily 

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1 tractors of the Federal Government involved in na2 tional security or law enforcement. 

3 (c) CONTENT OF NOTICES.— 

4 (1) IN GENERAL.—Each notice under sub5 section (b) shall contain the following: 

6 (A) The date, estimated date, or estimated 

7 date range of the breach of security. 

8 (B) A description of the nature of the 

9 breach of security. 

10 (C) A description of each type of person11 ally identifiable information that was or is rea12 sonably believed to have been acquired or 

13 accessed as a result of the breach of security. 

14 (D) A statement of each paragraph under 

15 subsection (b) that applies to the breach of se16 curity. 

17 (2) CONSTRUCTION.—Nothing in this section 

18 shall be construed to require a covered entity to re19 veal specific or identifying information about an in20 dividual as part of the notice under paragraph (1). 

21 (d) NOTICE BY DESIGNATED ENTITY.—The des22 ignated entity shall promptly provide each notice it re23 ceives under subsection (b) to the following: 

24 (1) The United States Secret Service. 

25 (2) The Federal Bureau of Investigation. 


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1 (3) The Commission. 

2 (4) The United States Postal Inspection Serv3 ice, if the breach of security involves mail fraud. 

4 (5) The attorney general of each State affected 

5 by the breach of security. 

6 (6) Such other Federal agencies as the des7 ignated entity considers appropriate for law enforce8 ment, national security, or data security purposes. 

9 (e) TIMING OF NOTICES.—Notice under this section 

10 shall be delivered as follows: 

11 (1) Notice under subsection (b) shall be deliv12 ered as promptly as possible, but— 

13 (A) not less than 3 business days before 

14 notification to an individual under section 

15 142(a)(1); and 

16 (B) not later than 10 days after the date 

17 of discovery of the events requiring notice. 

18 (2) Notice under subsection (d) shall be deliv19 ered as promptly as possible, but not later than 1 

20 business day after the date that the designated enti21 ty receives notice of a breach of security from a cov22 ered entity. 


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1 Subtitle E—Enforcement 

2 SEC. 151. GENERAL APPLICATION. 

3 The requirements of this title shall apply to any per4 son who— 

5 (1) collects, uses, transfers, or stores covered 

6 information concerning more than 5,000 individuals 

7 during any consecutive 12-month period; and 

8 (2) is— 

9 (A) a person over which the Commission 

10 has authority pursuant to section 5(a)(2) of the 

11 Federal Trade Commission Act (15 U.S.C. 

12 45(a)(2)); 

13 (B) a common carrier subject to the Com14 munications Act of 1934 (47 U.S.C. 151 et 

15 seq.), notwithstanding the definition of the term 

16 ‘‘Acts to regulate commerce’’ in section 4 of the 

17 Federal Trade Commission Act (15 U.S.C. 44) 

18 and the exception provided by section 5(a)(2) of 

19 the Federal Trade Commission Act (15 U.S.C. 

20 45(a)(2)) for such carriers; or 

21 (C) a nonprofit organization, including any 

22 organization described in section 501(c) of the 

23 Internal Revenue Code of 1986 that is exempt 

24 from taxation under section 501(a) of such 

25 Code, notwithstanding the definition of the 


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1 term ‘‘Acts to regulate commerce’’ in section 4 

2 of the Federal Trade Commission Act (15 

3 U.S.C. 44) and the exception provided by sec4 tion 5(a)(2) of the Federal Trade Commission 

5 Act (15 U.S.C. 45(a)(2)) for such organiza6 tions. 

7 SEC. 152. ENFORCEMENT BY THE FEDERAL TRADE COM8 MISSION. 

9 (a) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.— 

10 A reckless or repetitive violation of a provision of this title, 

11 except section 143, shall be treated as an unfair or decep12 tive act or practice in violation of a regulation under sec13 tion 18(a)(1)(B) of the Federal Trade Commission Act 

14 (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive 

15 acts or practices. 

16 (b) POWERS OF COMMISSION.— 

17 (1) IN GENERAL.—Except as provided in para18 graph (3), the Commission shall enforce this title, 

19 except section 143, in the same manner, by the same 

20 means, and with the same jurisdiction, powers, and 

21 duties as though all applicable terms and provisions 

22 of the Federal Trade Commission Act (15 U.S.C. 41 

23 et seq.) were incorporated into and made a part of 

24 this title. 


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1 (2) PRIVILEGES AND IMMUNITIES.—Except as 

2 provided in paragraph (3), any person who violates 

3 a provision of this title, except section 143, shall be 

4 subject to the penalties and entitled to the privileges 

5 and immunities provided in the Federal Trade Com6 mission Act (15 U.S.C. 41 et seq.). 

7 (3) COMMON CARRIERS AND NONPROFIT ORGA8 NIZATIONS.—The Commission shall enforce this 

9 title, except section 143, with respect to common 

10 carriers and nonprofit organizations described in 

11 section 151 to the extent necessary to effectuate the 

12 purposes of this title as if such carriers and non13 profit organizations were persons over which the 

14 Commission has authority pursuant to section 

15 5(a)(2) of the Federal Trade Commission Act (15 

16 U.S.C. 45(a)(2)). 

17 (c) RULEMAKING AUTHORITY.— 

18 (1) LIMITATION.—In promulgating rules under 

19 this title, the Commission may not require the de20 ployment or use of any specific products or tech21 nologies, including any specific computer software or 

22 hardware. 

23 (2) ADMINISTRATIVE PROCEDURE.—The Com24 mission shall promulgate regulations under this title 


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1 in accordance with section 553 of title 5, United 

2 States Code. 

3 (d) RULE OF CONSTRUCTION.—Nothing in this title 

4 shall be construed to limit the authority of the Commission 

5 under any other provision of law. 

6 SEC. 153. ENFORCEMENT BY ATTORNEY GENERAL. 

7 (a) IN GENERAL.—The Attorney General may bring 

8 a civil action in the appropriate United States district 

9 court against any covered entity that engages in conduct 

10 constituting a violation of section 143. 

11 (b) PENALTIES.— 

12 (1) IN GENERAL.—Upon proof of such conduct 

13 by a preponderance of the evidence, a covered entity 

14 shall be subject to a civil penalty of not more than 

15 $1,000 per individual whose personally identifiable 

16 information was or is reasonably believed to have 

17 been accessed or acquired as a result of the breach 

18 of security that is the basis of the violation, up to 

19 a maximum of $100,000 per day while such violation 

20 persists. 

21 (2) LIMITATIONS.—The total amount of the 

22 civil penalty assessed under this subsection against 

23 a covered entity for acts or omissions relating to a 

24 single breach of security shall not exceed 

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1 tion of subtitle D was reckless or repeated, in which 

2 case an additional civil penalty of up to $3,000,000 

3 may be imposed. 

4 (3) ADJUSTMENT FOR INFLATION.—Beginning 

5 on the date that the Consumer Price Index is first 

6 published by the Bureau of Labor Statistics that is 

7 after 1 year after the date of the enactment of this 

8 Act, and each year thereafter, the amounts specified 

9 in paragraphs (1) and (2) shall be increased by the 

10 percentage increase in the Consumer Price Index 

11 published on that date from the Consumer Price 

12 Index published the previous year. 

13 (c) INJUNCTIVE ACTIONS.—If it appears that a cov14 ered entity has engaged, or is engaged, in any act or prac15 tice that constitutes a violation of subtitle D, the Attorney 

16 General may petition an appropriate United States district 

17 court for an order enjoining such practice or enforcing 

18 compliance with such subtitle. 

19 (d) ISSUANCE OF ORDER.—A court may issue such 

20 an order under paragraph (c) if it finds that the conduct 

21 in question constitutes a violation of subtitle D. 

22 SEC. 154. ENFORCEMENT BY STATES. 

23 (a) CIVIL ACTION.—In any case in which the attor24 ney general of a State has reason to believe that an inter25 est of the residents of that State has been or is adversely 


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1 affected by a covered entity who violates any part of this 

2 title in a manner that results in economic or physical harm 

3 to an individual or engages in a pattern or practice that 

4 violates any part of this title other than section 143, the 

5 attorney general may, as parens patriae, bring a civil ac6 tion on behalf of the residents of the State in an appro7 priate district court of the United States— 

8 (1) to enjoin further violation of this title or a 

9 regulation promulgated under this title by the de10 fendant; 

11 (2) to compel compliance with this title or a 

12 regulation promulgated under this title; or 

13 (3) for violations of this title or a regulation 

14 promulgated under this title to obtain civil penalties 

15 in the amount determined under section title. 

16 (b) RIGHTS OF FEDERAL TRADE COMMISSION.— 

17 (1) NOTICE TO FEDERAL TRADE COMMIS18 SION.— 

19 (A) IN GENERAL.—Except as provided in 

20 subparagraph (C), the attorney general of a 

21 State shall notify the Commission in writing of 

22 any civil action under subsection (b), prior to 

23 initiating such civil action. 

24 (B) CONTENTS.—The notice required by 

25 subparagraph (A) shall include a copy of the 


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1 complaint to be filed to initiate such civil ac2 tion. 

3 (C) EXCEPTION.—If it is not feasible for 

4 the attorney general of a State to provide the 

5 notice required by subparagraph (A), the State 

6 shall provide notice immediately upon insti7 tuting a civil action under subsection (b). 

8 (2) INTERVENTION BY FEDERAL TRADE COM9 MISSION.—Upon receiving notice required by para10 graph (1) with respect to a civil action, the Commis11 sion may— 

12 (A) intervene in such action; and 

13 (B) upon intervening— 

14 (i) be heard on all matters arising in 

15 such civil action; and 

16 (ii) file petitions for appeal of a deci17 sion in such action. 

18 (c) PREEMPTIVE ACTION BY FEDERAL TRADE COM19 MISSION.—If the Commission institutes a civil action for 

20 violation of this title or a regulation promulgated under 

21 this title, no attorney general of a State may bring a civil 

22 action under subsection (a) against any defendant named 

23 in the complaint of the Commission for violation of this 

24 title or a regulation promulgated under this title that is 

25 alleged in such complaint. 


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1 (d) INVESTIGATORY POWERS.—Nothing in this sec2 tion may be construed to prevent the attorney general of 

3 a State from exercising the powers conferred on such at4 torney general by the laws of such State to conduct inves5 tigations or to administer oaths or affirmations or to com6 pel the attendance of witnesses or the production of docu7 mentary and other evidence. 

8 (e) VENUE; SERVICE OF PROCESS.— 

9 (1) VENUE.—Any action brought under sub10 section (a) may be brought in— 

11 (A) the district court of the United States 

12 that meets applicable requirements relating to 

13 venue under section 1391 of title 28, United 

14 States Code; or 

15 (B) another court of competent jurisdic16 tion. 

17 (2) SERVICE OF PROCESS.—In an action 

18 brought under subsection (a), process may be served 

19 in any district in which the defendant— 

20 (A) is an inhabitant; or 

21 (B) may be found. 

22 (f) ACTIONS BY OTHER STATE OFFICIALS.— 

23 (1) IN GENERAL.—In addition to civil actions 

24 brought by attorneys general under subsection (a), 

25 any other officer of a State who is authorized by the 


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1 State to do so may bring a civil action under sub2 section (a), subject to the same requirements and 

3 limitations that apply under this section to civil ac4 tions brought by attorneys general. 

5 (2) SAVINGS PROVISION.—Nothing in this sec6 tion may be construed to prohibit an authorized offi7 cial of a State from initiating or continuing any pro8 ceeding in a court of the State for a violation of any 

9 civil or criminal law of the State. 

10 SEC. 155. CIVIL PENALTIES. 

11 (a) IN GENERAL.—In an action brought under sec12 tion 154, in addition to any other penalty otherwise appli13 cable to a violation of this title or any regulation promul14 gated under this title, the following civil penalties shall 

15 apply: 

16 (1) SUBTITLE A VIOLATIONS.—A covered entity 

17 that recklessly or repeatedly violates subtitle A is lia18 ble for a civil penalty equal to the amount calculated 

19 by multiplying the number of days that the entity is 

20 not in compliance with such subtitle by an amount 

21 not to exceed $33,000. 

22 (2) SUBTITLE B VIOLATIONS.—A covered entity 

23 that recklessly or repeatedly violates subtitle B is 

24 liable for a civil penalty equal to the amount cal25 culated by multiplying the number of days that such 


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1 an entity is not in compliance with such subtitle, or 

2 the number of individuals for whom the entity failed 

3 to obtain consent as required by such subtitle, 

4 whichever is greater, by an amount not to exceed 

5 $33,000. 

6 (3) SUBTITLE D VIOLATIONS.—A covered entity 

7 that recklessly or repeatedly violates section 142 is 

8 liable for a civil penalty equal to the amount cal9 culated by multiplying the number of violations of 

10 such section by an amount not to exceed $33,000. 

11 Each failure to send notification as required under 

12 such section to a resident of the State shall be treat13 ed as a separate violation. 

14 (b) ADJUSTMENT FOR INFLATION.—Beginning on 

15 the date that the Consumer Price Index for All Urban 

16 Consumers is first published by the Bureau of Labor Sta17 tistics that is after 1 year after the date of the enactment 

18 of this Act, and each year thereafter, each of the amounts 

19 specified in subsection (a) shall be increased by the per20 centage increase in the Consumer Price Index published 

21 on that date from the Consumer Price Index published 

22 the previous year. 

23 (c) MAXIMUM TOTAL LIABILITY.—Notwithstanding 

24 the number of actions which may be brought against a 

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1 alty for which any covered entity may be liable under this 

2 section in such actions shall not exceed— 

3 (1) $6,000,000 for any related series of viola4 tions of any rule promulgated under subtitle A; 

5 (2) $6,000,000 for any related series of viola6 tions of subtitle B; and 

7 (3) $6,000,000 for any related series of viola8 tions of section 142. 

9 SEC. 156. EFFECT ON OTHER LAWS. 

10 (a) PREEMPTION OF STATE LAWS.—The provisions 

11 of this title shall supersede any provisions of the law of 

12 any State relating to those entities covered by the regula13 tions issued pursuant to this title, to the extent that such 

14 provisions relate to the collection, use, or disclosure of— 

15 (1) covered information addressed in this title; 

16 or 

17 (2) personally identifiable information or per18 sonal identification information addressed in provi19 sions of the law of a State. 

20 (b) UNAUTHORIZED CIVIL ACTIONS; CERTAIN STATE

21 LAWS.— 

22 (1) UNAUTHORIZED ACTIONS.—No person 

23 other than a person specified in section 154 may 

24 bring a civil action under the laws of any State if 

25 such action is premised in whole or in part upon the 


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1 defendant violating this title or a regulation promul2 gated under this title. 

3 (2) PROTECTION OF CERTAIN STATE LAWS.— 

4 This title shall not be construed to preempt the ap5 plicability of— 

6 (A) State laws that address the collection, 

7 use, or disclosure of health information or fi8 nancial information; or 

9 (B) other State laws to the extent that 

10 those laws relate to acts of fraud. 

11 (c) RULE OF CONSTRUCTION RELATING TO RE12 QUIRED DISCLOSURES TO GOVERNMENT ENTITIES.— 

13 This title shall not be construed to expand or limit the 

14 duty or authority of a covered entity or third party to dis15 close personally identifiable information to a government 

16 entity under any provision of law. 

17 SEC. 157. NO PRIVATE RIGHT OF ACTION. 

18 This title may not be construed to provide any private 

19 right of action. 

20 Subtitle F—Co-Regulatory Safe 

21 Harbor Programs 

22 SEC. 161. ESTABLISHMENT OF SAFE HARBOR PROGRAMS. 

23 (a) IN GENERAL.—Not later than 1 year after the 

24 date of the enactment of this Act, the Commission shall 

25 initiate a rulemaking proceeding to establish requirements 


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1 for the establishment and administration of safe harbor 

2 programs under which a nongovernmental organization 

3 will administer a program that— 

4 (1) establishes a mechanism for participants to 

5 implement the requirements of this title with regards 

6 to— 

7 (A) certain types of unauthorized uses of 

8 covered information as described in paragraph 

9 (2); or 

10 (B) any unauthorized use of covered infor11 mation; and 

12 (2) offers consumers a clear, conspicuous, per13 sistent, and effective means of opting out of the 

14 transfer of covered information by a covered entity 

15 participating in the safe harbor program to a third 

16 party for— 

17 (A) behavioral advertising purposes; 

18 (B) location-based advertising purposes; 

19 (C) other specific types of unauthorized 

20 use; or 

21 (D) any unauthorized use. 

22 (b) SELECTION OF NONGOVERNMENTAL ORGANIZA23 TIONS TO ADMINISTER PROGRAM.— 

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1 quirements established pursuant to subsection (a) 

2 shall submit to the Commission an application there3 for at such time, in such manner, and containing 

4 such information as the Commission may require. 

5 (2) NOTICE AND RECEIPT OF APPLICATIONS.— 

6 Upon completion of the rulemaking proceedings re7 quired by subsection (a), the Commission shall— 

8 (A) publish a notice in the Federal Reg9 ister that it will receive applications for ap10 proval of safe harbor programs under this sub11 title; and 

12 (B) begin receiving applications under 

13 paragraph (1). 

14 (3) SELECTION.—Not later than 270 days after 

15 the date on which the Commission receives a com16 pleted application under this subsection, the Com17 mission shall grant or deny the application on the 

18 basis of the Commission’s evaluation of the appli19 cant’s capacity to provide protection of individuals’ 

20 covered information with regard to specific types of 

21 unauthorized uses of covered information as de22 scribed in subsection (a)(2) that is substantially 

23 equivalent to or superior to the protection otherwise 

24 provided under this title. 


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1 (4) WRITTEN FINDINGS.—Any decision reached 

2 by the Commission under this subsection shall be ac3 companied by written findings setting forth the basis 

4 for and reasons supporting such decision. 

5 (c) SCOPE OF SAFE HARBOR PROTECTION.—The 

6 scope of protection offered by safe harbor programs ap7 proved by the Commission that establish mechanisms for 

8 participants to implement the requirements of the title 

9 only for certain uses of covered information as described 

10 in subsection (a)(2) shall be limited to participating enti11 ties’ use of those particular types of covered information. 

12 (d) SUPERVISION BY FEDERAL TRADE COMMIS13 SION.— 

14 (1) IN GENERAL.—The Commission shall exer15 cise oversight and supervisory authority of a safe 

16 harbor program approved under this section 

17 through— 

18 (A) ongoing review of the practices of the 

19 nongovernmental organization administering 

20 the program; 

21 (B) the imposition of civil penalties on the 

22 nongovernmental organization if it is not com23 pliant with the requirements established under 

24 subsection (a); and 


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1 (C) withdrawal of authorization to admin2 ister the safe harbor program under this sub3 title. 

4 (2) ANNUAL REPORTS BY NONGOVERNMENTAL

5 ORGANIZATIONS.—Each year, each nongovernmental 

6 organization administering a safe harbor program 

7 under this section shall submit to the Commission a 

8 report on its activities under this subtitle during the 

9 preceding year. 

10 SEC. 162. PARTICIPATION IN SAFE HARBOR PROGRAM. 

11 (a) EXEMPTION.—Any covered entity that partici12 pates in, and demonstrates compliance with, a safe harbor 

13 program administered under section 161 shall be exempt 

14 from any provision of subtitle B or subtitle C if the Com15 mission finds that the requirements of the safe harbor pro16 gram are substantially the same as or more protective of 

17 privacy of individuals than the requirements of the provi18 sion from which the exemption is granted. 

19 (b) LIMITATION.—Nothing in this subtitle shall be 

20 construed to exempt any covered entity participating in 

21 a safe harbor program from compliance with any other 

22 requirement of the regulations promulgated under this 

23 title for which the safe harbor does not provide an excep24 tion. 


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1 Subtitle G—Application With Other 

2 Federal Laws 

3 SEC. 171. APPLICATION WITH OTHER FEDERAL LAWS. 

4 (a) QUALIFIED EXEMPTION FOR PERSONS SUBJECT

5 TO OTHER FEDERAL PRIVACY LAWS.—If a person is sub6 ject to a provision of this title and a provision of a Federal 

7 privacy law described in subsection (d), such provision of 

8 this title shall not apply to such person to the extent that 

9 such provision of Federal privacy law applies to such per10 son. 

11 (b) PROTECTION OF OTHER FEDERAL PRIVACY

12 LAWS.—Nothing in this title may be construed to modify, 

13 limit, or supersede the operation of the Federal privacy 

14 laws described in subsection (d) or the provision of infor15 mation permitted or required, expressly or by implication, 

16 by such laws, with respect to Federal rights and practices. 

17 (c) COMMUNICATIONS INFRASTRUCTURE AND PRI18 VACY.—If a person is subject to a provision of section 222 

19 or 631 of the Communications Act of 1934 (47 U.S.C. 

20 222 and 551) and a provision of this title, such provision 

21 of such section 222 or 631 shall not apply to such person 

22 to the extent that such provision of this title applies to 

23 such person. 


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1 (d) OTHER FEDERAL PRIVACY LAWS DESCRIBED.— 

2 The Federal privacy laws described in this subsection are 

3 as follows: 

4 (1) Section 552a of title 5, United States Code 

5 (commonly known as the Privacy Act of 1974). 

6 (2) The Right to Financial Privacy Act of 1978 

7 (12 U.S.C. 3401 et seq.). 

8 (3) The Fair Credit Reporting Act (15 U.S.C. 

9 1681 et seq.). 

10 (4) The Fair Debt Collection Practices Act (15 

11 U.S.C. 1692 et seq.). 

12 (5) The Children’s Online Privacy Protection 

13 Act of 1998 (15 U.S.C. 6501 et seq.). 

14 (6) Title V of the Gramm-Leach-Bliley Act of 

15 1999 (15 U.S.C. 6801 et seq.). 

16 (7) Chapters 119, 123, and 206 of title 18, 

17 United States Code. 

18 (8) Section 2710 of title 18, United States 

19 Code. 

20 (9) Section 444 of the General Education Pro21 visions Act (20 U.S.C. 1232g) (commonly referred 

22 to as the ‘‘Family Educational Rights and Privacy 

23 Act of 1974’’). 

24 (10) Section 445 of the General Education Pro25 visions Act (20 U.S.C. 1232h). 


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1 (11) The Privacy Protection Act of 1980 (42 

2 U.S.C. 2000aa et seq.). 

3 (12) The regulations promulgated under section 

4 264(c) of the Health Insurance Portability and Ac5 countability Act of 1996 (42 U.S.C. 1320d–2 note), 

6 as such regulations relate to a person described in 

7 section 1172(a) of the Social Security Act (42 

8 U.S.C. 1320d–1(a)) or to transactions referred to in 

9 section 1173(a)(1) of such Act (42 U.S.C. 1320d– 

10 2(a)(1)). 

11 (13) The Communications Assistance for Law 

12 Enforcement Act (47 U.S.C. 1001 et seq.). 

13 (14) Section 227 of the Communications Act of 

14 1934 (47 U.S.C. 227). 

15 Subtitle H—Development of Com16 mercial Data Privacy Policy in 

17 the Department of Commerce 

18 SEC. 181. DIRECTION TO DEVELOP COMMERCIAL DATA PRI19 VACY POLICY. 

20 The Secretary of Commerce shall contribute to the 

21 development of commercial data privacy policy by— 

22 (1) convening private sector stakeholders, in23 cluding members of industry, civil society groups, 

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1 duct in support of applications for safe harbor pro2 grams under subtitle F; 

3 (2) expanding interoperability between the 

4 United States commercial data privacy framework 

5 and other national and regional privacy frameworks; 

6 (3) conducting research related to improving 

7 privacy protection under this title; and 

8 (4) conducting research related to improving 

9 data sharing practices, including the use of 

10 anonymised data, and growing the information econ11 omy. 

12 TITLE II—ONLINE PRIVACY OF 

13 CHILDREN 

14 SEC. 201. SHORT TITLE. 

15 This title may be cited as the ‘‘Do Not Track Kids 

16 Act of 2014’’. 

17 SEC. 202. FINDINGS. 

18 Congress finds the following: 

19 (1) Since the enactment of the Children’s On20 line Privacy Protection Act of 1998, the World Wide 

21 Web has changed dramatically, with the creation of 

22 tens of millions of websites, the proliferation of en23 tirely new media platforms, and the emergence of a 

24 diverse ecosystem of services, devices, and applica25 tions that enable users to connect wirelessly within 


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1 an online environment without being tethered to a 

2 desktop computer. 

3 (2) The explosive growth of the Internet eco4 system has unleashed a wide array of opportunities 

5 to learn, communicate, participate in civic life, ac6 cess entertainment, and engage in commerce. 

7 (3) In addition to these significant benefits, the 

8 Internet also presents challenges, particularly with 

9 respect to the efforts of entities to track the online 

10 activities of children and minors and to collect, use, 

11 and disclose personal information about them, in12 cluding their geolocation, for commercial purposes. 

13 (4) Children and teens are visiting numerous 

14 companies’ websites, and marketers are using multi15 media games, online quizzes, and mobile phone and 

16 tablet applications to create ties to children and 

17 teens. 

18 (5) According to a study by the Wall Street 

19 Journal in 2010, websites directed to children and 

20 teens were more likely to use cookies and other 

21 tracking tools than sites directed to a general audi22 ence. 

23 (6) This study examined 50 popular websites 

24 for children and teens in the United States and 

25 found that these 50 sites placed 4,123 cookies, beaVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 cons, and other tracking tools on the test computer 

2 used for the study. 

3 (7) This is 30 percent greater than the number 

4 of such tracking tools that were placed on the test 

5 computer in a similar study of the 50 overall most 

6 popular websites in the United States, which are 

7 generally directed to adults. 

8 (8) Children and teens lack the cognitive ability 

9 to distinguish advertising from program content and 

10 to understand that the purpose of advertising is to 

11 persuade them, making them unable to activate the 

12 defenses on which adults rely. 

13 (9) Children and teens are less able than adults 

14 to understand the potential long-term consequences 

15 of having their information available to third parties, 

16 including advertisers, and other individuals. 

17 (10) According to Common Sense Media and 

18 the Center for Digital Democracy, 90 percent of 

19 teens have used some form of social media, 75 per20 cent have a social networking site, and 51 percent 

21 check their social networking site at least once a 

22 day. 

23 (11) Ninety-one percent of parents and 91 per24 cent of adults believe it is not okay for advertisers 


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1 to collect information about a child’s location from 

2 that child’s mobile phone. 

3 (12) Ninety-four percent of parents and 91 per4 cent of adults agree that advertisers should receive 

5 the parent’s permission before putting tracking soft6 ware on a child’s computer. 

7 (13) Ninety-six percent of parents and 94 per8 cent of adults expressed disapproval when asked if 

9 it is ‘‘okay for a website to ask children for personal 

10 information about their friends’’. 

11 (14) Eighty-eight percent of parents would sup12 port a law that requires search engines and social 

13 networking sites to get users’ permission before 

14 using their personal information. 

15 (15) A Commonsense Media/Zogby poll found 

16 that 94 percent of parents and 94 percent of adults 

17 believe individuals should have the ability to request 

18 the deletion, after a specific period of time, of all of 

19 their personal information held by an online search 

20 engine, social networking site, or marketing com21 pany. 

22 (16) According to a Pew/Berkman Center poll, 

23 69 percent of parents of teens who engage in online 

24 activity are concerned about how that activity might 


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1 affect their children’s future academic or employ2 ment opportunities. 

3 (17) Eighty-one percent of parents of teens who 

4 engage in online activity say they are concerned 

5 about how much information advertisers can learn 

6 about their children’s online activity. 

7 SEC. 203. DEFINITIONS. 

8 (a) IN GENERAL.—In this title: 

9 (1) MINOR.—The term ‘‘minor’’ means an indi10 vidual over the age of 12 and under the age of 16. 

11 (2) TARGETED MARKETING.—The term ‘‘tar12 geted marketing’’ means advertising or other efforts 

13 to market a product or service that are directed to 

14 a specific individual or device— 

15 (A) based on the personal information of 

16 the individual or a unique identifier of the de17 vice; and 

18 (B) as a result of use by the individual, or 

19 access by the device, of a website, online serv20 ice, online application, or mobile application. 

21 (b) TERMS DEFINED BY COMMISSION.—In this title, 

22 the terms ‘‘directed to minors’’ and ‘‘geolocation informa23 tion’’ shall have the meanings given such terms by the 

24 Commission by regulation. Not later than 1 year after the 

25 date of the enactment of this Act, the Commission shall 


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1 promulgate, under section 553 of title 5, United States 

2 Code, regulations that define such terms broadly enough 

3 so that they are not limited to current technology, con4 sistent with the principles articulated by the Commission 

5 regarding the definition of the term ‘‘Internet’’ in its 

6 statement of basis and purpose on the final rule under 

7 the Children’s Online Privacy Protection Act of 1998 (15 

8 U.S.C. 6501 et seq.) promulgated on November 3, 1999 

9 (64 Fed. Reg. 59891). 

10 (c) OTHER DEFINITIONS.—The definitions set forth 

11 in section 1302 of the Children’s Online Privacy Protec12 tion Act of 1998 (15 U.S.C. 6501), as amended by section 

13 3(a), shall apply in this title, except to the extent the Com14 mission provides otherwise by regulations issued under 

15 section 553 of title 5, United States Code. 

16 SEC. 204. ONLINE COLLECTION, USE, AND DISCLOSURE OF 

17 PERSONAL INFORMATION OF CHILDREN. 

18 (a) DEFINITIONS.—Section 1302 of the Children’s 

19 Online Privacy Protection Act of 1998 (15 U.S.C. 6501) 

20 is amended— 

21 (1) by amending paragraph (2) to read as fol22 lows: 

23 ‘‘(2) OPERATOR.—The term ‘operator’— 

24 ‘‘(A) means any person who, for commer25 cial purposes, in interstate or foreign commerce, 


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1 operates or provides a website on the Internet, 

2 online service, online application, or mobile ap3 plication, and who— 

4 ‘‘(i) collects or maintains, either di5 rectly or through a service provider, per6 sonal information from or about the users 

7 of such website, service, or application; 

8 ‘‘(ii) allows another person to collect 

9 personal information directly from users of 

10 such website, service, or application (in 

11 which case the operator is deemed to have 

12 collected the information); or 

13 ‘‘(iii) allows users of such website, 

14 service, or application to publicly disclose 

15 personal information (in which case the op16 erator is deemed to have collected the in17 formation); and 

18 ‘‘(B) does not include any nonprofit entity 

19 that would otherwise be exempt from coverage 

20 under section 5 of the Federal Trade Commis21 sion Act (15 U.S.C. 45).’’; 

22 (2) in paragraph (4)— 

23 (A) by amending subparagraph (A) to read 

24 as follows: 


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1 ‘‘(A) the release of personal information 

2 for any purpose, except where such information 

3 is provided to a person other than an operator 

4 who provides support for the internal operations 

5 of the website, online service, online application, 

6 or mobile application of the operator and does 

7 not disclose or use that information for any 

8 other purpose; and’’; and 

9 (B) in subparagraph (B), by striking 

10 ‘‘website or online service’’ and inserting 

11 ‘‘website, online service, online application, or 

12 mobile application’’; 

13 (3) in paragraph (8)— 

14 (A) by amending subparagraph (G) to read 

15 as follows: 

16 ‘‘(G) information concerning a child or the 

17 parents of that child (including any unique or 

18 substantially unique identifier, such as a cus19 tomer number) that an operator collects online 

20 from the child and combines with an identifier 

21 described in subparagraphs (A) through (G).’’; 

22 (B) by redesignating subparagraphs (F) 

23 and (G) as subparagraphs (G) and (H), respec24 tively; and 


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1 (C) by inserting after subparagraph (E) 

2 the following new subparagraph: 

3 ‘‘(F) information (including an Internet 

4 protocol address) that permits the identification 

5 of an individual, the computer of an individual, 

6 or any other device used by an individual to ac7 cess the Internet or an online service, online ap8 plication, or mobile application;’’; 

9 (4) by striking paragraph (10) and redesig10 nating paragraphs (11) and (12) as paragraphs (10) 

11 and (11), respectively; and 

12 (5) by adding at the end the following new 

13 paragraph: 

14 ‘‘(12) ONLINE, ONLINE SERVICE, ONLINE AP15 PLICATION, MOBILE APPLICATION, DIRECTED TO

16 CHILDREN.—The terms ‘online’, ‘online service’, ‘on17 line application’, ‘mobile application’, and ‘directed 

18 to children’ shall have the meanings given such 

19 terms by the Commission by regulation. Not later 

20 than 1 year after the date of the enactment of the 

21 Commercial Privacy Bill of Rights Act of 2014, the 

22 Commission shall promulgate, under section 553 of 

23 title 5, United States Code, regulations that define 

24 such terms broadly enough so that they are not lim25 ited to current technology, consistent with the prinVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 ciples articulated by the Commission regarding the 

2 definition of the term ‘Internet’ in its statement of 

3 basis and purpose on the final rule under this title 

4 promulgated on November 3, 1999 (64 Fed. Reg. 

5 59891). The definition of the term ‘online service’ in 

6 such regulations shall include broadband Internet 

7 access service (as defined in the Report and Order 

8 of the Federal Communications Commission relating 

9 to the matter of preserving the open Internet and 

10 broadband industry practices (FCC 10–201, adopted 

11 by the Commission on December 21, 2010)).’’. 

12 (b) ONLINE COLLECTION, USE, AND DISCLOSURE OF

13 PERSONAL INFORMATION OF CHILDREN.—Section 1303 

14 of the Children’s Online Privacy Protection Act of 1998 

15 (15 U.S.C. 6502) is amended— 

16 (1) by striking the heading and inserting the 

17 following: ‘‘ONLINE COLLECTION, USE, AND DIS18 CLOSURE OF PERSONAL INFORMATION OF

19 CHILDREN.’’; 

20 (2) in subsection (a)— 

21 (A) by amending paragraph (1) to read as 

22 follows: 

23 ‘‘(1) IN GENERAL.—It is unlawful for an oper24 ator of a website, online service, online application, 

25 or mobile application directed to children, or an opVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 erator having actual knowledge that personal infor2 mation being collected is from a child, to collect per3 sonal information from a child in a manner that vio4 lates the regulations prescribed under subsection 

5 (b).’’; and 

6 (B) in paragraph (2)— 

7 (i) by striking ‘‘of such a website or 

8 online service’’; and 

9 (ii) by striking ‘‘subsection 

10 (b)(1)(B)(iii)’’ and inserting ‘‘subsection 

11 (b)(1)(C)(iii)’’; and 

12 (3) in subsection (b)— 

13 (A) by amending paragraph (1) to read as 

14 follows: 

15 ‘‘(1) IN GENERAL.—Not later than 1 year after 

16 the date of the enactment of the Commercial Privacy 

17 Bill of Rights Act of 2014, the Commission shall 

18 promulgate, under section 553 of title 5, United 

19 States Code, regulations to require an operator of a 

20 website, online service, online application, or mobile 

21 application directed to children, or an operator hav22 ing actual knowledge that personal information 

23 being collected is from a child— 

24 ‘‘(A) to provide clear and conspicuous no25 tice in clear and plain language of the types of 


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1 personal information the operator collects, how 

2 the operator uses such information, whether the 

3 operator discloses such information, and the 

4 procedures or mechanisms the operator uses to 

5 ensure that personal information is not col6 lected from children except in accordance with 

7 the regulations promulgated under this para8 graph; 

9 ‘‘(B) to obtain verifiable parental consent 

10 for the collection, use, or disclosure of personal 

11 information of a child; 

12 ‘‘(C) to provide to a parent whose child 

13 has provided personal information to the oper14 ator, upon request by and proper identification 

15 of the parent— 

16 ‘‘(i) a description of the specific types 

17 of personal information collected from the 

18 child by the operator; 

19 ‘‘(ii) the opportunity at any time to 

20 refuse to permit the further use or mainte21 nance in retrievable form, or future collec22 tion, by the operator of personal informa23 tion collected from the child; and 

24 ‘‘(iii) a means that is reasonable 

25 under the circumstances for the parent to 


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1 obtain any personal information collected 

2 from the child, if such information is avail3 able to the operator at the time the parent 

4 makes the request; 

5 ‘‘(D) not to condition participation in a 

6 game, or use of a website, service, or applica7 tion, by a child on the provision by the child of 

8 more personal information than is reasonably 

9 required to participate in the game or use the 

10 website, service, or application; and 

11 ‘‘(E) to establish and maintain reasonable 

12 procedures to protect the confidentiality, secu13 rity, and integrity of personal information col14 lected from children.’’; 

15 (B) in paragraph (2)— 

16 (i) in the matter preceding subpara17 graph (A), by striking ‘‘paragraph 

18 (1)(A)(ii)’’ and inserting ‘‘paragraph 

19 (1)(B)’’; and 

20 (ii) in subparagraph (A), by inserting 

21 ‘‘or to contact a different child’’ after ‘‘to 

22 recontact the child’’; 

23 (C) by amending paragraph (3) to read as 

24 follows: 


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1 ‘‘(3) CONTINUATION OF SERVICE.—The regula2 tions shall prohibit an operator from discontinuing 

3 service provided to a child on the basis of refusal by 

4 the parent of the child, under the regulations pre5 scribed under paragraph (1)(C)(ii), to permit the 

6 further use or maintenance in retrievable form, or 

7 future collection, by the operator of personal infor8 mation collected from the child, to the extent that 

9 the operator is capable of providing such service 

10 without such information.’’; and 

11 (D) by adding at the end the following: 

12 ‘‘(4) RULE FOR TREATMENT OF USERS OF

13 WEBSITES, SERVICES, AND APPLICATIONS DIRECTED

14 TO CHILDREN.—An operator of a website, online 

15 service, online application, or mobile application that 

16 is directed to children shall treat all users of such 

17 website, service, or application as children for pur18 poses of this title, except as permitted by the Com19 mission by a regulation promulgated under this 

20 title.’’. 

21 (c) ADMINISTRATION AND APPLICABILITY OF ACT.— 

22 Section 1306 of the Children’s Online Privacy Protection 

23 Act of 1998 (15 U.S.C. 6505) is amended— 

24 (1) in subsection (b)— 


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1 (A) in paragraph (1), by striking ‘‘, in the 

2 case of’’ and all that follows and inserting the 

3 following: ‘‘by the appropriate Federal banking 

4 agency with respect to any insured depository 

5 institution (as such terms are defined in section 

6 3 of such Act (12 U.S.C. 1813));’’; and 

7 (B) by striking paragraph (2) and redesig8 nating paragraphs (3) through (6) as para9 graphs (2) through (5), respectively; and 

10 (2) by adding at the end the following new sub11 section: 

12 ‘‘(f) TELECOMMUNICATIONS CARRIERS AND CABLE

13 OPERATORS.— 

14 ‘‘(1) ENFORCEMENT BY FTC.—Notwithstanding 

15 section 5(a)(2) of the Federal Trade Commission 

16 Act (15 U.S.C. 45(a)(2)), compliance with the re17 quirements imposed under this title shall be enforced 

18 by the Commission with respect to any telecommuni19 cations carrier (as defined in section 3 of the Com20 munications Act of 1934 (47 U.S.C. 153)). 

21 ‘‘(2) RELATIONSHIP TO OTHER LAW.—To the 

22 extent that sections 222, 338(i), and 631 of the 

23 Communications Act of 1934 (47 U.S.C. 222; 

24 338(i); 551) are inconsistent with this title, this title 

25 controls.’’. 


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1 SEC. 205. TARGETED MARKETING TO CHILDREN OR MI2 NORS. 

3 (a) ACTS PROHIBITED.—It is unlawful for— 

4 (1) an operator of a website, online service, on5 line application, or mobile application directed to 

6 children, or an operator having actual knowledge 

7 that personal information being collected is from a 

8 child, to use, disclose to third parties, or compile 

9 personal information for targeted marketing pur10 poses without verifiable parental consent; or 

11 (2) an operator of a website, online service, on12 line application, or mobile application directed to mi13 nors, or an operator having actual knowledge that 

14 personal information being collected is from a minor, 

15 to use, disclose to third parties, or compile personal 

16 information for targeted marketing purposes without 

17 the consent of the minor. 

18 (b) REGULATIONS.—Not later than 1 year after the 

19 date of the enactment of this Act, the Commission shall 

20 promulgate, under section 553 of title 5, United States 

21 Code, regulations to implement this section. 

22 SEC. 206. DIGITAL MARKETING BILL OF RIGHTS FOR TEENS 

23 AND FAIR INFORMATION PRACTICES PRIN24 CIPLES. 

25 (a) ACTS PROHIBITED.—It is unlawful for an oper26 ator of a website, online service, online application, or moVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00090 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 bile application directed to minors, or an operator having 

2 actual knowledge that personal information being collected 

3 is from a minor, to collect personal information from a 

4 minor unless such operator has adopted and complies with 

5 a Digital Marketing Bill of Rights for Teens that is con6 sistent with the Fair Information Practices Principles de7 scribed in subsection (b). 

8 (b) FAIR INFORMATION PRACTICES PRINCIPLES.— 

9 The Fair Information Practices Principles described in 

10 this subsection are the following: 

11 (1) COLLECTION LIMITATION PRINCIPLE.—Ex12 cept as provided in paragraph (3), personal informa13 tion should be collected from a minor only when col14 lection of the personal information is— 

15 (A) consistent with the context of a par16 ticular transaction or service or the relationship 

17 of the minor with the operator, including collec18 tion necessary to fulfill a transaction or provide 

19 a service requested by the minor; or 

20 (B) required or specifically authorized by 

21 law. 

22 (2) DATA QUALITY PRINCIPLE.—The personal 

23 information of a minor should be accurate, complete, 

24 and kept up-to-date to the extent necessary to fulfill 


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1 the purposes described in subparagraphs (A) 

2 through (D) of paragraph (3). 

3 (3) PURPOSE SPECIFICATION PRINCIPLE.—The 

4 purposes for which personal information is collected 

5 should be specified to the minor not later than at 

6 the time of the collection of the information. The 

7 subsequent use or disclosure of the information 

8 should be limited to— 

9 (A) fulfillment of the transaction or service 

10 requested by the minor; 

11 (B) support for the internal operations of 

12 the website, service, or application, as described 

13 in section 312.2 of title 16, Code of Federal 

14 Regulations; 

15 (C) compliance with legal process or other 

16 purposes expressly authorized under specific 

17 legal authority; or 

18 (D) other purposes— 

19 (i) that are specified in a notice to the 

20 minor; and 

21 (ii) to which the minor has consented 

22 under paragraph (7) before the informa23 tion is used or disclosed for such other 

24 purposes. 


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1 (4) RETENTION LIMITATION PRINCIPLE.—The 

2 personal information of a minor should not be re3 tained for longer than is necessary to fulfill a trans4 action or provide a service requested by the minor 

5 or such other purposes specified in subparagraphs 

6 (A) through (D) of paragraph (3). The operator 

7 should implement a reasonable and appropriate data 

8 disposal policy based on the nature and sensitivity of 

9 such personal information. 

10 (5) SECURITY SAFEGUARDS PRINCIPLE.—The 

11 personal information of a minor should be protected 

12 by reasonable and appropriate security safeguards 

13 against risks such as loss or unauthorized access, 

14 destruction, use, modification, or disclosure. 

15 (6) OPENNESS PRINCIPLE.— 

16 (A) IN GENERAL.—The operator should 

17 maintain a general policy of openness about de18 velopments, practices, and policies with respect 

19 to the personal information of a minor. The op20 erator should provide each minor using the 

21 website, online service, online application, or 

22 mobile application of the operator with a clear 

23 and prominent means— 

24 (i) to identify and contact the oper25 ator, by, at a minimum, disclosing, clearly 


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1 and prominently, the identity of the oper2 ator and— 

3 (I) in the case of an operator 

4 who is an individual, the address of 

5 the principal residence of the operator 

6 and an e-mail address and telephone 

7 number for the operator; or 

8 (II) in the case of any other op9 erator, the address of the principal 

10 place of business of the operator and 

11 an e-mail address and telephone num12 ber for the operator; 

13 (ii) to determine whether the operator 

14 possesses any personal information of the 

15 minor, the nature of any such information, 

16 and the purposes for which the information 

17 was collected and is being retained; 

18 (iii) to obtain any personal informa19 tion of the minor that is in the possession 

20 of the operator from the operator, or from 

21 a person specified by the operator, within 

22 a reasonable time after making a request, 

23 at a charge (if any) that is not excessive, 

24 in a reasonable manner, and in a form that 

25 is readily intelligible to the minor; 


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1 (iv) to challenge the accuracy of per2 sonal information of the minor that is in 

3 the possession of the operator; and 

4 (v) if the minor establishes the inaccu5 racy of personal information in a challenge 

6 under clause (iv), to have such information 

7 erased, corrected, completed, or otherwise 

8 amended. 

9 (B) LIMITATION.—Nothing in this para10 graph shall be construed to permit an operator 

11 to erase or otherwise modify personal informa12 tion requested by a law enforcement agency 

13 pursuant to legal authority. 

14 (7) INDIVIDUAL PARTICIPATION PRINCIPLE.— 

15 The operator should— 

16 (A) obtain consent from a minor before 

17 using or disclosing the personal information of 

18 the minor for any purpose other than the pur19 poses described in subparagraphs (A) through 

20 (C) of paragraph (3); and 

21 (B) obtain affirmative express consent 

22 from a minor before using or disclosing pre23 viously collected personal information of the 

24 minor for purposes that constitute a material 


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1 change in practice from the original purposes 

2 specified to the minor under paragraph (3). 

3 (c) REGULATIONS.—Not later than 1 year after the 

4 date of the enactment of this Act, the Commission shall 

5 promulgate, under section 553 of title 5, United States 

6 Code, regulations to implement this section, including reg7 ulations further defining the Fair Information Practices 

8 Principles described in subsection (b). 

9 SEC. 207. ONLINE COLLECTION OF GEOLOCATION INFOR10 MATION OF CHILDREN AND MINORS. 

11 (a) ACTS PROHIBITED.— 

12 (1) IN GENERAL.—It is unlawful for an oper13 ator of a website, online service, online application, 

14 or mobile application directed to children or minors, 

15 or an operator having actual knowledge that 

16 geolocation information being collected is from a 

17 child or minor, to collect geolocation information 

18 from a child or minor in a manner that violates the 

19 regulations prescribed under subsection (b). 

20 (2) DISCLOSURE TO PARENT OR MINOR PRO21 TECTED.—Notwithstanding paragraph (1), neither 

22 an operator nor the operator’s agent shall be held to 

23 be liable under any Federal or State law for any dis24 closure made in good faith and following reasonable 

25 procedures in responding to a request for disclosure 


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1 of geolocation information under subparagraph 

2 (C)(ii)(III) or (D)(ii)(III) of subsection (b)(1). 

3 (b) REGULATIONS.— 

4 (1) IN GENERAL.—Not later than 1 year after 

5 the date of the enactment of this Act, the Commis6 sion shall promulgate, under section 553 of title 5, 

7 United States Code, regulations that require an op8 erator of a website, online service, online application, 

9 or mobile application directed to children or minors, 

10 or an operator having actual knowledge that 

11 geolocation information being collected is from a 

12 child or minor— 

13 (A) to provide clear and conspicuous notice 

14 in clear and plain language of any geolocation 

15 information the operator collects, how the oper16 ator uses such information, and whether the op17 erator discloses such information; 

18 (B) to establish procedures or mechanisms 

19 to ensure that geolocation information is not 

20 collected from children or minors except in ac21 cordance with regulations promulgated under 

22 this paragraph; 

23 (C) in the case of collection of geolocation 

24 information from a child— 


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1 (i) prior to collecting such informa2 tion, to obtain verifiable parental consent; 

3 and 

4 (ii) after collecting such information, 

5 to provide to the parent of the child, upon 

6 request by and proper identification of the 

7 parent— 

8 (I) a description of the 

9 geolocation information collected from 

10 the child by the operator; 

11 (II) the opportunity at any time 

12 to refuse to permit the further use or 

13 maintenance in retrievable form, or 

14 future collection, by the operator of 

15 geolocation information from the 

16 child; and 

17 (III) a means that is reasonable 

18 under the circumstances for the par19 ent to obtain any geolocation informa20 tion collected from the child, if such 

21 information is available to the oper22 ator at the time the parent makes the 

23 request; and 

24 (D) in the case of collection of geolocation 

25 information from a minor— 


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1 (i) prior to collecting such informa2 tion, to obtain affirmative express consent 

3 from such minor; and 

4 (ii) after collecting such information, 

5 to provide to the minor, upon request— 

6 (I) a description of the 

7 geolocation information collected from 

8 the minor by the operator; 

9 (II) the opportunity at any time 

10 to refuse to permit the further use or 

11 maintenance in retrievable form, or 

12 future collection, by the operator of 

13 geolocation information from the 

14 minor; and 

15 (III) a means that is reasonable 

16 under the circumstances for the minor 

17 to obtain any geolocation information 

18 collected from the minor, if such in19 formation is available to the operator 

20 at the time the minor makes the re21 quest. 

22 (2) WHEN CONSENT NOT REQUIRED.—The reg23 ulations promulgated under paragraph (1) shall pro24 vide that verifiable parental consent under subpara25 graph (C)(i) of such paragraph or affirmative exVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 press consent under subparagraph (D)(i) of such 

2 paragraph is not required when the collection of the 

3 geolocation information of a child or minor is nec4 essary, to the extent permitted under other provi5 sions of law, to provide information to law enforce6 ment agencies or for an investigation on a matter re7 lated to public safety. 

8 (3) CONTINUATION OF SERVICE.—The regula9 tions promulgated under paragraph (1) shall pro10 hibit an operator from discontinuing service provided 

11 to— 

12 (A) a child on the basis of refusal by the 

13 parent of the child, under subparagraph 

14 (C)(ii)(II) of such paragraph, to permit the fur15 ther use or maintenance in retrievable form, or 

16 future online collection, of geolocation informa17 tion from the child by the operator, to the ex18 tent that the operator is capable of providing 

19 such service without such information; or 

20 (B) a minor on the basis of refusal by the 

21 minor, under subparagraph (D)(ii)(II) of such 

22 paragraph, to permit the further use or mainte23 nance in retrievable form, or future online col24 lection, of geolocation information from the 

25 minor by the operator, to the extent that the 


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1 operator is capable of providing such service 

2 without such information. 

3 (c) INCONSISTENT STATE LAW.—No State or local 

4 government may impose any liability for commercial ac5 tivities or actions by operators in interstate or foreign 

6 commerce in connection with an activity or action de7 scribed in this section that is inconsistent with the treat8 ment of those activities or actions under this section. 

9 SEC. 208. REMOVAL OF CONTENT. 

10 (a) ACTS PROHIBITED.—It is unlawful for an oper11 ator of a website, online service, online application, or mo12 bile application to make publicly available through the 

13 website, service, or application content or information that 

14 contains or displays personal information of children or 

15 minors in a manner that violates the regulations pre16 scribed under subsection (b). 

17 (b) REGULATIONS.— 

18 (1) IN GENERAL.—Not later than 1 year after 

19 the date of the enactment of this Act, the Commis20 sion shall promulgate, under section 553 of title 5, 

21 United States Code, regulations that require an op22 erator— 

23 (A) to the extent technologically feasible, 

24 to implement mechanisms that permit a user of 

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1 ator to erase or otherwise eliminate content or 

2 information submitted to the website, service, or 

3 application by such user that is publicly avail4 able through the website, service, or application 

5 and contains or displays personal information of 

6 children or minors; and 

7 (B) to take appropriate steps to make 

8 users aware of such mechanisms and to provide 

9 notice to users that such mechanisms do not 

10 necessarily provide comprehensive removal of 

11 the content or information submitted by such 

12 users. 

13 (2) EXCEPTION.—The regulations promulgated 

14 under paragraph (1) may not require an operator or 

15 third party to erase or otherwise eliminate content 

16 or information that— 

17 (A) any other provision of Federal or State 

18 law requires the operator or third party to 

19 maintain; or 

20 (B) was submitted to the website, service, 

21 or application of the operator by any person 

22 other than the user who is attempting to erase 

23 or otherwise eliminate such content or informa24 tion, including content or information submitted 


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1 by such user that was republished or resub2 mitted by another person. 

3 (3) LIMITATION.—Nothing in this section shall 

4 be construed to limit the authority of a law enforce5 ment agency to obtain any content or information 

6 from an operator as authorized by law or pursuant 

7 to an order of a court of competent jurisdiction. 

8 SEC. 209. ENFORCEMENT AND APPLICABILITY. 

9 (a) ENFORCEMENT BY THE COMMISSION.— 

10 (1) IN GENERAL.—Except as otherwise pro11 vided, this title and the regulations prescribed under 

12 this title shall be enforced by the Commission under 

13 the Federal Trade Commission Act (15 U.S.C. 41 et 

14 seq.). 

15 (2) UNFAIR OR DECEPTIVE ACTS OR PRAC16 TICES.—Subject to subsection (b), a violation of this 

17 title or a regulation prescribed under this title shall 

18 be treated as a violation of a rule defining an unfair 

19 or deceptive act or practice prescribed under section 

20 18(a)(1)(B) of the Federal Trade Commission Act 

21 (15 U.S.C. 57a(a)(1)(B)). 

22 (3) ACTIONS BY THE COMMISSION.— 

23 (A) IN GENERAL.—Subject to subsection 

24 (b), and except as provided in subsection (d)(1), 

25 the Commission shall prevent any person from 


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1 violating this title or a regulation prescribed 

2 under this title in the same manner, by the 

3 same means, and with the same jurisdiction, 

4 powers, and duties as though all applicable 

5 terms and provisions of the Federal Trade 

6 Commission Act (15 U.S.C. 41 et seq.) were in7 corporated into and made a part of this title. 

8 (B) PRIVILEGES AND IMMUNITIES.—Any 

9 person who violates this title or a regulation 

10 prescribed under this title shall be subject to 

11 the penalties and entitled to the privileges and 

12 immunities provided in the Federal Trade Com13 mission Act (15 U.S.C. 41 et seq.). 

14 (b) ENFORCEMENT BY CERTAIN OTHER AGEN15 CIES.—Notwithstanding subsection (a), compliance with 

16 the requirements imposed under this title shall be enforced 

17 as follows: 

18 (1) Under section 8 of the Federal Deposit In19 surance Act (12 U.S.C. 1818) by the appropriate 

20 Federal banking agency, with respect to an insured 

21 depository institution (as such terms are defined in 

22 section 3 of such Act (12 U.S.C. 1813)). 

23 (2) Under the Federal Credit Union Act (12 

24 U.S.C. 1751 et seq.) by the National Credit Union 


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1 Administration Board, with respect to any Federal 

2 credit union. 

3 (3) Under part A of subtitle VII of title 49, 

4 United States Code, by the Secretary of Transpor5 tation, with respect to any air carrier or foreign air 

6 carrier subject to such part. 

7 (4) Under the Packers and Stockyards Act, 

8 1921 (7 U.S.C. 181 et seq.) (except as provided in 

9 section 406 of such Act (7 U.S.C. 226; 227)) by the 

10 Secretary of Agriculture, with respect to any activi11 ties subject to such Act. 

12 (5) Under the Farm Credit Act of 1971 (12 

13 U.S.C. 2001 et seq.) by the Farm Credit Adminis14 tration, with respect to any Federal land bank, Fed15 eral land bank association, Federal intermediate 

16 credit bank, or production credit association. 

17 (c) ENFORCEMENT BY STATES.— 

18 (1) CIVIL ACTIONS.—In any case in which the 

19 attorney general of a State has reason to believe 

20 that an interest of the residents of that State has 

21 been or is threatened or adversely affected by the 

22 engagement of any person in a practice that violates 

23 this title or a regulation prescribed under this title, 

24 the State, as parens patriae, may bring a civil action 

25 on behalf of the residents of the State in a district 


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1 court of the United States of appropriate jurisdic2 tion to— 

3 (A) enjoin that practice; 

4 (B) enforce compliance with this title or 

5 such regulation; 

6 (C) obtain damages, restitution, or other 

7 compensation on behalf of residents of the 

8 State; or 

9 (D) obtain such other relief as the court 

10 may consider to be appropriate. 

11 (2) RIGHTS OF FEDERAL TRADE COMMIS12 SION.— 

13 (A) NOTICE TO FEDERAL TRADE COMMIS14 SION.— 

15 (i) IN GENERAL.—Except as provided 

16 in clause (iii), the attorney general of a 

17 State shall notify the Federal Trade Com18 mission in writing that the attorney gen19 eral intends to bring a civil action under 

20 paragraph (1) before initiating the civil ac21 tion. 

22 (ii) CONTENTS.—The notification re23 quired by clause (i) with respect to a civil 

24 action shall include a copy of the complaint 

25 to be filed to initiate the civil action. 


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1 (iii) EXCEPTION.—If it is not feasible 

2 for the attorney general of a State to pro3 vide the notification required by clause (i) 

4 before initiating a civil action under para5 graph (1), the attorney general shall notify 

6 the Federal Trade Commission imme7 diately upon instituting the civil action. 

8 (B) INTERVENTION BY FEDERAL TRADE

9 COMMISSION.—The Federal Trade Commission 

10 may— 

11 (i) intervene in any civil action 

12 brought by the attorney general of a State 

13 under paragraph (1); and 

14 (ii) upon intervening— 

15 (I) be heard on all matters aris16 ing in the civil action; and 

17 (II) file petitions for appeal of a 

18 decision in the civil action. 

19 (3) INVESTIGATORY POWERS.—For purposes of 

20 bringing any civil action under paragraph (1), noth21 ing in this title shall be construed to prevent an at22 torney general of a State from exercising the powers 

23 conferred on the attorney general by the laws of that 

24 State to— 

25 (A) conduct investigations; 


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1 (B) administer oaths or affirmations; or 

2 (C) compel the attendance of witnesses or 

3 the production of documentary and other evi4 dence. 

5 (4) PREEMPTIVE ACTION BY FEDERAL TRADE

6 COMMISSION.—If the Federal Trade Commission in7 stitutes a civil action or an administrative action 

8 with respect to a violation of this title, the attorney 

9 general of a State may not, during the pendency of 

10 such action, bring a civil action under paragraph (1) 

11 against any defendant named in the complaint of the 

12 Commission for the violation with respect to which 

13 the Commission instituted such action. 

14 (5) VENUE; SERVICE OF PROCESS.— 

15 (A) VENUE.—Any action brought under 

16 paragraph (1) may be brought in the district 

17 court of the United States that meets applicable 

18 requirements relating to venue under section 

19 1391 of title 28, United States Code. 

20 (B) SERVICE OF PROCESS.—In an action 

21 brought under paragraph (1), process may be 

22 served in any district in which the defendant— 

23 (i) is an inhabitant; or 

24 (ii) may be found. 

25 (6) ACTIONS BY OTHER STATE OFFICIALS.— 


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1 (A) IN GENERAL.—In addition to civil ac2 tions brought by attorneys general under para3 graph (1), any other officer of a State who is 

4 authorized by the State to do so may bring a 

5 civil action under paragraph (1), subject to the 

6 same requirements and limitations that apply 

7 under this subsection to civil actions brought by 

8 attorneys general. 

9 (B) SAVINGS PROVISION.—Nothing in this 

10 subsection may be construed to prohibit an au11 thorized official of a State from initiating or 

12 continuing any proceeding in a court of the 

13 State for a violation of any civil or criminal law 

14 of the State. 

15 (d) TELECOMMUNICATIONS CARRIERS AND CABLE

16 OPERATORS.— 

17 (1) ENFORCEMENT BY FTC.—Notwithstanding 

18 section 5(a)(2) of the Federal Trade Commission 

19 Act (15 U.S.C. 45(a)(2)), compliance with the re20 quirements imposed under this title shall be enforced 

21 by the Commission with respect to any telecommuni22 cations carrier (as defined in section 3 of the Com23 munications Act of 1934 (47 U.S.C. 153)). 

24 (2) RELATIONSHIP TO OTHER LAW.—To the ex25 tent that sections 222, 338(i), and 631 of the ComVerDate Mar 15 2010 02:54 May 29, 2014 Jkt 039200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 E:\BILLS\S2378.IS S2378

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1 munications Act of 1934 (47 U.S.C. 222; 338(i); 

2 551) are inconsistent with this title, this title con3 trols. 

4 SEC. 210. RULE FOR TREATMENT OF USERS OF WEBSITES, 

5 SERVICES, AND APPLICATIONS DIRECTED TO 

6 CHILDREN OR MINORS. 

7 An operator of a website, online service, online appli8 cation, or mobile application that is directed to children 

9 or minors shall treat all users of such website, service, or 

10 application as children or minors (as the case may be) for 

11 purposes of this title, except as permitted by the Commis12 sion by a regulation promulgated under this title. 

13 SEC. 211. EFFECTIVE DATES. 

14 (a) IN GENERAL.—Except as provided in subsections 

15 (b) and (c), this title and the amendments made by this 

16 title shall take effect on the date that is 1 year after the 

17 date of the enactment of this Act. 

18 (b) AUTHORITY TO PROMULGATE REGULATIONS.— 

19 The following shall take effect on the date of the enact20 ment of this Act: 

21 (1) The amendments made by subsections 

22 (a)(5) and (b)(3)(A) of section 204. 

23 (2) Sections 205(b), 206(c), 207(b), and 

24 208(b). 

25 (3) Subsections (b) and (c) of section 203. 


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1 (c) DIGITAL MARKETING BILL OF RIGHTS FOR

2 TEENS.—Section 206, except for subsection (c) of such 

3 section, shall take effect on the date that is 180 days after 

4 the promulgation of regulations under such subsection. 

Æ 


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