I 116th CONGRESS 2d Session H. R. 8372 IN THE HOUSE OF REPRESENTATIVES September 24, 2020 Ms. Castor of Florida (for herself, Ms. Clarke of New York , and Ms. Wexton ) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To keep children safe and protect their interests on the internet, and for other purposes.

1. Short title This Act may be cited as the Kids Internet Design and Safety Act or the KIDS Act . 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 mechanisms 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 creators, 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 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. 3. Definitions (a) In general In this Act: (1) Augmented reality The term augmented reality means an application or web-based experience utilizing a camera to change or enhance the user's view of the real world. (2) Branded content The term branded content means commercial content created for, and distributed on, a platform in such a way that the line between entertainment and advertising becomes unclear in order to generate a positive view of the brand. (3) Commission The term Commission means the Federal Trade Commission. (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 a platform, as demonstrated by, with respect to such 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 brand or agency or publisher works with individuals who are deemed to have the potential to create engagement, drive conversation, or sell products or services with the intended target audience, in order to drive brand messages. (8) Manipulation The term manipulation means design strategies, product settings, and product architecture targeted to cognitive vulnerabilities with the intention or effect of pushing the user to make choices to their detriment and the operator’s benefit. (9) Native advertising The term native advertising means a form of paid media where the advertising experience follows the natural form and function of the user experience in which it is placed. (10) Neuromarketing The term neu­ro­mar­ket­ing means a subfield of marketing that attempts to predict and potentially manipulate consumer behavior and decision making based on analysis of brain patterns. (11) Operator (A) In general The term operator means any person who operates a platform, including any person offering products or services for sale through that platform, involving commerce— (i) among the several States or with one or more foreign nations; (ii) in any territory of the United States or in the District of Columbia, or between any such territory and— (I) another such territory; or (II) any State or foreign nation; or (iii) between the District of Columbia and any State, territory, or foreign nation. (B) Exception The term operator does not include any nonprofit entity that would otherwise be exempt from coverage under section 5 of the Federal Trade Commission Act ( 15 U.S.C. 45 ). (12) Person The term person means any individual, partnership, corporation, trust, estate, cooperative, association, or other entity. (13) Platform The term platform means a website, online service, online application, or mobile application which is operated for commercial purposes. (14) Virtual reality The term virtual reality means an application or web-based experience utilizing a camera to create an immersive environment that mimics the real world, usually via a headset. 4. Regulation of acts and practices on child-directed platforms (a) Prohibition on certain features It is unlawful for an operator of a platform directed to children to incorporate any of the following features: (1) 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. (2) Push alerts that urge a covered user to spend more time engaged with the platform when they are not actively using it. (3) Displaying the quantity of positive engagement or feedback that a covered user has received from other users. (4) Any design feature or setting that unfairly encourages a covered user, due to their age or inexperience, to make purchases, submit content, or spend more time engaging with the platform. (5) Any feature that provides a covered user with badges or other visual award symbols based on elevated levels of engagement with the platform. (b) Prohibition on amplification of certain content; user reporting mechanism It shall be unlawful for an operator of a platform directed to children, or a platform for which the operator has constructive knowledge that covered users use its platform, to— (1) amplify, promote, or encourage covered users’ consumption of videos and other forms of content that involve— (A) sexual material; (B) physical or emotional violence, including bullying; (C) adult activities, including gambling; or (D) other dangerous, abusive, exploitative, or wholly commercial content; or (2) fail to implement a mechanism for users to report suspected violations of any requirement under paragraph (1). (c) Prohibition on certain advertising methods (1) In general It shall be unlawful for an operator of a platform directed to children to— (A) direct content that includes host-selling to covered users; (B) expose covered users to program-length advertisements; (C) direct branded content or native advertising to covered users; (D) direct online advertising or material with considerable commercial content involving alcohol, nicotine, or tobacco to covered users; (E) expose covered users to 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; or (F) direct content that includes product placement to covered users. (2) Program-length advertisement 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 operator of a platform directed to children to use age verification information collected from covered users for any commercial purpose. (e) Regulations The Commission shall promulgate regulations in accordance with section 553 of title 5, United States Code, to require any operator of a platform directed to children to incorporate online visual elements or other indicators that distinguish commercial content from noncommercial content. 5. Marketing and commercialization (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 parents to identify noncommercial, educational, and enriching content for covered users online; and (2) address 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) develop 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. 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 a 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. (b) Annual platform audits The regulations promulgated pursuant to subsection (a) shall include the establishment of an annual audit process, to be conducted during the 5-year period subsequent to the date of enactment of this Act, for each of the 25 platforms directed to children with the highest total number of child users, to evaluate the level of compliance by each such platform with respect to the requirements under this Act. (c) Report The Commission shall issue 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 respect to 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. 7. Grant program (a) Establishment (1) In general The Secretary of Commerce shall provide grants to eligible persons to foster the creation and promotion of advertisement-free and educational online content for covered users, such as videos and applications. (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 of Commerce 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. 8. 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 the 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 the Act, or a rule promulgated under the 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) Effect on other laws Nothing contained in this Act shall be construed to limit the authority of the Commission under any other provisions of law.