KIDS Act
Bill: H.R.5439 | Sponsor: Rep. Castor, Kathy (D-FL)
Policy area: Commerce

Summary:
Kids Internet Design and Safety Act or the KIDS Act  This bill prohibits operators of commercial online platforms that are directed to children from engaging in certain practices, including implementing features that encourage additional engagement with the platform, promoting certain types of content, and using certain advertising methods.

To keep children safe and protect their interests on the internet, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Kids Internet Design and Safety 
Act'' or the ``KIDS Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Children increasingly consume digital entertainment on 
        the internet and are uniquely susceptible to manipulation 
        online, given their lack of important neurological and 
        psychological capabilities which are developed later in 
        adulthood.
            (2) Today's digital media environment, which is constantly 
        evolving and now includes high-tech experiences, such as 
        augmented reality and virtual reality, is largely designed in 
        non-transparent ways to ensure children interact with content 
        that reflect the interests and goals of content producers, 
        online platforms, and marketers.
            (3) Artificial intelligence, machine learning, and other 
        complex systems are used to make continuous decisions about how 
        online content for children can be personalized to increase 
        engagement.
            (4) Online companies gather, analyze, and use data for 
        behavioral marketing directed at children.
            (5) Companies employ sophisticated strategies, including 
        neuromarketing, to affect consumer behavior and manipulate 
        online users' decision making.
            (6) Branded content in various forms of multimedia, 
        including native advertising and influencer marketing, exposes 
        children to marketing that is inherently manipulative or 
        purposely disguised as entertainment or other information.

SEC. 3. DEFINITIONS.

    (a) In General.--In this Act:
            (1) Algorithmic process.--The term ``algorithmic process'' 
        means a computational process, including one derived from 
        machine learning or other artificial intelligence techniques, 
        that processes personal information or other data for the 
        purpose of determining the order or manner that a set of 
        information is provided to a user of an online platform, 
        including the provision of commercial content, the display of 
        social media posts, or any other method of automated decision 
        making, content selection, content recommendation, or content 
        amplification.
            (2) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (3) Constructive knowledge.--
                    (A) In general.--The term ``constructive 
                knowledge'' means, for purposes of section 4, with 
                respect to knowledge that a user of an online platform 
                is a covered user, knowledge that is imputed to the 
                operator of the online platform if--
                            (i) the operator directly or indirectly 
                        collects, uses, profiles, buys, sells, 
                        classifies, or analyzes (using an algorithmic 
                        process or other form of data analytics) data 
                        about the user to estimate, identify, or 
                        classify the age, age range, or proxy thereof;
                            (ii) the operator has or receives data or 
                        reporting related to the age of the user on the 
                        online platform under the self-regulatory 
                        guidelines described in section 1304 of the 
                        Children's Online Privacy Protection Act of 
                        1998 (15 U.S.C. 6503) that documents risks and 
                        controls, including the existence of operator-
                        controlled data analytics and content analytics 
                        capabilities and functions or outputs;
                            (iii) the operator has or receives 
                        complaints from parents or other third parties 
                        about the age of the user, whether through the 
                        operator's complaint mechanism, by email, or 
                        other means conveniently accessible by such 
                        parents or third parties;
                            (iv) the operator has or receives data or 
                        reporting or information from the operator's 
                        internal communications, including 
                        documentation about its advertising practices, 
                        such as an advertisement insertion order, or 
                        other promotional material to marketers, that 
                        indicates that data is being collected from the 
                        user because the user is within a particular 
                        age range; or
                            (v) the operator knows that--
                                    (I) a provider of content on the 
                                platform communicates to an advertising 
                                network that the content is intended 
                                for users of a particular age range or 
                                likely to appeal to users of a 
                                particular age range, whether directly 
                                or indirectly; and
                                    (II) the user is shown that 
                                content.
                    (B) Additional factors.--The Commission may issue 
                guidance or promulgate rules in accordance with section 
                553 of title 5, United States Code, that indicate 
                factors, in addition to those described in subparagraph 
                (A), that should be considered to be constructive 
                knowledge for purposes of this Act.
            (4) Covered user.--The term ``covered user'' means an 
        individual under the age of 16.
            (5) Directed to children.--The term ``directed to 
        children'' means the targeting of covered users by an online 
        platform or portion of an online platform, as demonstrated by, 
        with respect to such platform or portion of a platform--
                    (A) its subject matter;
                    (B) its visual content;
                    (C) the use of animated characters or child-
                oriented activities for children and related 
                incentives;
                    (D) music or other audio content;
                    (E) the age of models used;
                    (F) the presence of--
                            (i) child celebrities; or
                            (ii) celebrities who appeal to covered 
                        users;
                    (G) the language used;
                    (H) advertising content used on, or used to 
                advertise, such platform; or
                    (I) reliable empirical evidence relating to--
                            (i) the composition of the audience of such 
                        platform; and
                            (ii) the intended audience of such 
                        platform.
            (6) Host-selling.--The term ``host-selling'' refers to 
        commercial video content that features the same characters or 
        individuals as in the adjacent noncommercial content.
            (7) Influencer marketing.--The term ``influencer 
        marketing'' means a tactic by which a company compensates 
        individuals who are deemed to have the potential to review, 
        promote, or sell a product or service online to an intended 
        target audience.
            (8) Online platform.--The term ``online platform'' means 
        any public-facing website, online service, online application, 
        or mobile application which is operated for commercial 
        purposes.
            (9) Operator.--The term ``operator'' means any person who, 
        for commercial purposes, in interstate or foreign commerce, 
        operates or provides an online platform.
            (10) Person.--The term ``person'' means any individual, 
        partnership, corporation, trust, estate, cooperative, 
        association, or other entity.

SEC. 4. REGULATION OF ACTS AND PRACTICES ON CHILD-DIRECTED PLATFORMS.

    (a) Prohibition on Certain Interface Elements.--
            (1) In general.--
                    (A) Prohibition.--It is unlawful for an operator to 
                operate or provide--
                            (i) an online platform or a portion of an 
                        online platform directed to children that 
                        incorporates an interface element described in 
                        subparagraph (B); and
                            (ii) any online platform that employs an 
                        interface element described in subparagraph (B) 
                        with respect to a user if the operator has 
                        actual or constructive knowledge that the user 
                        is a covered user.
                    (B) Interface elements described.--The interface 
                elements described in this subparagraph are the 
                following:
                            (i) Any auto-play setting that, without 
                        input from the covered user, commences 
                        additional video content directly following the 
                        video content initially selected by the user.
                            (ii) Messages or alerts that encourage a 
                        covered user who is not actively using the 
                        platform to engage with the platform.
                            (iii) Displaying the quantity of positive 
                        engagement or feedback that a covered user has 
                        received from other users.
                            (iv) Any interface element or setting that 
                        unfairly encourages a covered user, due to 
                        their age or inexperience, to share personal 
                        information, submit content, or spend more time 
                        engaging with the platform.
                            (v) Any interface element that provides a 
                        covered user with badges or other visual award 
                        symbols based on elevated levels of engagement 
                        with the platform.
                            (vi) Any interface element that maximizes a 
                        covered user's spending on the platform, 
                        unfairly encourages a covered user to spend 
                        money on the platform, facilitates a financial 
                        transaction by a covered user on the platform 
                        without notification to the covered user's 
                        parent, or facilitates a financial transaction 
                        by a covered user on the platform that is not 
                        in the interest of the covered user.
            (2) Rulemaking.--Not later than 1 year after the date of 
        enactment of this Act and not less frequently than every 5 
        years thereafter, the Commission shall promulgate regulations 
        under section 553 of title 5, United States Code, that 
        establish any additions or exceptions to the prohibitions under 
        paragraph (1). The Commission may only establish such an 
        exception on the basis that the exception is necessary to 
        provide essential functionality for an online platform and is 
        consistent with the best interests of covered users.
    (b) Prohibition on Amplification of Certain Content; User Reporting 
Mechanism.--
            (1) In general.--It shall be unlawful for an operator to 
        operate or provide--
                    (A) an online platform or portion of an online 
                platform directed to children that employs an 
                algorithmic process described in paragraph (2) on the 
                platform;
                    (B) any online platform that employs an algorithmic 
                process described in paragraph (2) with respect to a 
                user of the platform if the operator of the platform 
                has actual or constructive knowledge that the user is a 
                covered user; and
                    (C) an online platform that does not include a 
                mechanism for users or other third parties to report 
                suspected violations of any requirement of this 
                paragraph.
            (2) Algorithmic process described.--An algorithmic process 
        described in this paragraph is an algorithmic process that 
        amplifies, promotes, or encourages covered users' consumption 
        of videos and other forms of content that--
                    (A) are of a non-educational nature (as determined 
                by the Commission); and
                    (B) involve--
                            (i) sexual material;
                            (ii) promotion of physical or emotional 
                        violence or activities that can reasonably be 
                        assumed to result in physical or emotional 
                        harm, including self-harm, use of weapons, and 
                        bullying;
                            (iii) activities that are unlawful for 
                        covered users to engage in or the promotion of 
                        such activities; or
                            (iv) wholly commercial content that is not 
                        reasonably recognizable as such to a covered 
                        user.
    (c) Prohibition on Certain Advertising Methods.--
            (1) In general.--It shall be unlawful for an online 
        operator to operate or provide--
                    (A) an online platform or portion of an online 
                platform directed to children that employs an 
                algorithmic process to present any of the content 
                described in paragraph (2) to users of the platform; 
                and
                    (B) any online platform that employs an algorithmic 
                process to present any of the content described in 
                paragraph (2) to a covered user if the operator of the 
                platform has actual or constructive knowledge that the 
                user is a covered user.
            (2) Content described.--The content described in this 
        paragraph is the following:
                    (A) Content that includes host-selling.
                    (B) Program-length advertisements.
                    (C) Influencer marketing.
                    (D) Online advertising or material with 
                considerable commercial content involving alcohol, 
                nicotine, or tobacco.
                    (E) Online advertising or material with 
                considerable commercial content with any imbedded 
                interactive elements that take advantage of covered 
                users' inexperience or credulity in noncommercial 
                child-directed content.
                    (F) Content that includes product placement.
            (3) Program-length advertisement.--For purposes of this 
        subsection, the term ``program-length advertisement'' shall be 
        defined by the Commission through regulation or other public 
        guidance.
    (d) Prohibition on Use of Personal Information.--It shall be 
unlawful for an online platform to use age verification information 
collected from a covered user for any commercial purpose if--
            (1) the online platform is directed to children; or
            (2) the operator of the online platform has constructive 
        knowledge that the user is a covered user.
    (e) Requirement To Distinguish Commercial Content From 
Noncommercial Content.--The Commission shall promulgate regulations in 
accordance with section 553 of title 5, United States Code, to require 
any online platform or portion of an online platform that is directed 
to children, or with respect to which the operator of the platform or 
portion of the platform has constructive knowledge that covered users 
use the platform or portion of the platform, to incorporate online 
visual elements or other indicators that distinguish commercial content 
from noncommercial content.
    (f) Rulemaking.--The Commission shall promulgate, in accordance 
with section 553 of title 5, United States Code, such rules as may be 
necessary to carry out this section.
    (g) Effective Date.--The requirements of this section shall apply 
to online platforms beginning on the date that is 1 year after the date 
of enactment of this Act.

SEC. 5. ONLINE CONTENT LABELING.

    (a) Content Labeling System Report.--Not later than the date that 
is 1 year after the date of enactment of this Act, the Commission shall 
submit to Congress a report--
            (1) containing recommendations for a labeling system to 
        allow covered users and parents to identify noncommercial, 
        educational, and enriching content for covered users online; 
        and
            (2) addressing considerations regarding how such labeling 
        system should--
                    (A) analyze content based on evidence-based 
                criteria;
                    (B) employ an easy-to-understand visual cue for 
                parents to identify content described in paragraph (1);
                    (C) receive regular review to determine its 
                effectiveness; and
                    (D) include a mechanism for users to report to the 
                Commission complaints of mislabeled content and for the 
                Commission to remedy such instances of mislabeled 
                content.
    (b) Consultation.--The report described in subsection (a) shall be 
developed by the Commission in consultation with an advisory board, to 
be created and convened by the Commission, which is comprised of 
experts in child development, child health, education, and media.

SEC. 6. TRANSPARENCY AND AUDITING.

    (a) Transparency.--The Commission shall promulgate regulations in 
accordance with section 553 of title 5, United States Code, requiring 
an operator of an online platform which is directed to children to 
publish and maintain a publicly accessible digital record of the 
viewable or playable content of each such platform. Such regulations 
shall require the operator to ensure that such record does not include 
personal information (as defined in section 1302 of the Children's 
Online Privacy Protection Act of 1998 (15 U.S.C. 6501)) or, as 
appropriate, user-generated content.
    (b) Annual Platform Audits.--The regulations promulgated pursuant 
to subsection (a) shall include the establishment of an annual audit 
process, to be conducted by the Commission during the 5-year period 
subsequent to the date of enactment of this Act, for each of the 25 
online platforms directed to children with the highest total number of 
covered users, to evaluate the level of compliance by each such 
platform with the requirements under this Act.
    (c) Report.--The Commission shall submit annual reports to Congress 
based on the audits described in subsection (b) that--
            (1) describe the level of compliance by the platforms 
        described in such subsection with the requirements under this 
        Act; and
            (2) provide recommendations for such legislation and 
        administrative actions as the Commission determines appropriate 
        based on the audit findings.

SEC. 7. GRANT PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of Commerce (in this section 
        referred to as the ``Secretary'') shall make grants to eligible 
        persons to foster the creation and promotion of advertisement-
        free and educational online content (such as videos and 
        applications) for covered users.
            (2) Eligible person.--For purposes of this section, the 
        term ``eligible person'' means a person that has submitted an 
        application, as approved by the Secretary pursuant to the 
        eligibility requirements developed under subsection (b), for 
        the creation and promotion of advertisement-free and 
        educational online content for covered users.
    (b) Advisory Council.--The Secretary shall establish and convene an 
Advisory Council on Children's Online Content, which shall be--
            (1) comprised of experts in education, child development, 
        psychology, online media, and other related disciplines; and
            (2) tasked with developing evidence-based criteria for 
        grant eligibility and grant distribution.
    (c) Authorization of Appropriations.--
            (1) In general.--To carry out this section, there is 
        authorized to be appropriated--
                    (A) for fiscal year 2021, $4,000,000;
                    (B) for fiscal year 2022, $8,000,000;
                    (C) for fiscal year 2023, $10,000,000; and
                    (D) for fiscal year 2024, $12,000,000.
            (2) Availability of funds.--Any amount appropriated under 
        this subsection for any fiscal year shall remain available for 
        the purposes of carrying out any application approved during 
        such fiscal year for an additional period of 1 year after the 
        end of such fiscal year.

SEC. 8. FEDERAL TRADE COMMISSION STUDY.

    Not later than 1 year after the date of enactment of this Act, the 
Commission shall conduct and publish a study, using any compulsory 
processes available to the Commission as necessary, relying on public 
data and information if available and sufficient, and incorporating 
public comment, on harms resulting from interface elements and 
advertising methods on online platforms that are directed to children 
(and best practices for avoiding such harms), including the following:
            (1) The use of algorithmic processes and any other 
        automated systems used for non-commercial content 
        recommendation or amplification on platforms that are directed 
        to covered users.
            (2) The effect of algorithmic processes and any other 
        automated systems used for non-commercial content 
        recommendation or amplification on platforms that are directed 
        to covered users.

SEC. 9. ADMINISTRATION AND ENFORCEMENT.

    (a) In General.--This Act shall be enforced by the Commission under 
the Federal Trade Commission Act (15 U.S.C. 41 et seq.).
    (b) Actions by Commission.--
            (1) In general.--The Commission shall prevent any person 
        from violating this Act or any regulation promulgated by the 
        Commission under this Act in the same manner, by the same 
        means, and with the same jurisdiction, powers, and duties, as 
        though all applicable terms and provisions of the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
        and made a part of this Act.
            (2) Penalties and privileges.--Any person that violates 
        this Act or any regulation promulgated under this Act shall be 
        subject to the penalties and entitled to the privileges and 
        immunities provided in the Federal Trade Commission Act in the 
        same manner, by the same means, and with the same jurisdiction, 
        power, and duties, as though all applicable terms and 
        provisions of the Federal Trade Commission Act were 
        incorporated into and made a part of this Act.
    (c) Civil Penalty.--A violation of this Act, or a regulation 
promulgated under this Act, shall be treated as a violation of a rule 
defining an unfair or deceptive act or practice prescribed under 
section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)).
    (d) Enforcement by States.--
            (1) In general.--If the attorney general of a State has 
        reason to believe that an interest of the residents of the 
        State has been or is being threatened or adversely affected by 
        a violation of this Act or a regulation promulgated under this 
        Act, the attorney general of the State may, as parens patriae, 
        bring a civil action on behalf of the residents of the State in 
        an appropriate district court of the United States to obtain 
        appropriate relief.
            (2) Rights of commission.--
                    (A) Notice to commission.--
                            (i) In general.--Except as provided in 
                        clause (iii), the attorney general of a State, 
                        before initiating a civil action under 
                        paragraph (1), shall provide written 
                        notification to the Commission that the 
                        attorney general intends to bring such civil 
                        action.
                            (ii) Contents.--The notification required 
                        under clause (i) shall include a copy of the 
                        complaint to be filed to initiate the civil 
                        action.
                            (iii) Exception.--If it is not feasible for 
                        the attorney general of a State to provide the 
                        notification required under clause (i) before 
                        initiating a civil action under paragraph (1), 
                        the attorney general shall notify the 
                        Commission immediately upon instituting the 
                        civil action.
                    (B) Intervention by commission.--The Commission 
                may--
                            (i) intervene in any civil action brought 
                        by the attorney general of a State under 
                        paragraph (1); and
                            (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (3) Investigatory powers.--Nothing in this subsection may 
        be construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of the State to conduct investigations, to administer 
        oaths or affirmations, or to compel the attendance of witnesses 
        or the production of documentary or other evidence.
    (e) Effect on Other Laws.--
            (1) Authority of the commission.--Nothing contained in this 
        Act shall be construed to limit the authority of the Commission 
        under any other provisions of law.
            (2) Relation to state law.--Nothing in this Act may be 
        construed to preempt any provision of State law that provides 
        greater protection to consumers than is provided in this Act.
                                 <all>