The news from the front is that progress is being made toward staying enforcement of the Maine privacy law targeting minors. The law, which contains a private right of action, has caused many to void Maine in their promotional plans for the fall and to adjust their data collection practices.

Background

The new Maine privacy law targeted at minors suffers from serious constitutional flaws.

Under the new Maine law, which is scheduled to take effect Sept. 12, 2009, an entity may not collect, receive or use personal or health-related information from a minor for marketing purposes without first obtaining “verifiable parental consent.” To obtain such consent, the entity must undertake a “reasonable effort, taking into consideration available technology” to notify the parent and obtain parental consent. Any such notice must describe the entity’s practices regarding the collection, use, and disclosure of the information, and the consent provided must authorize such practices before any information may be collected, received or used.

Maine is following the lead of other states that have tried to expand the federal Children’s Online Privacy Protection Act (“COPPA”) to address adolescents between 13-17 years of age and their use of social networking websites. Like COPPA extension proposals in New Jersey (extending COPPA to cover the 13-17 age range) and Illinois (applying COPPA to most social networking sites), the Maine law tries to build on COPPA’s "verifiable parental consent" requirement for the 13-17 age range.

But, the Maine law addresses the following additional items:

  • Online & Offline Information Collection: The Maine law applies to all collection, receipt or use of information from a minor, whether online or offline, whereas COPPA only applies to online activities.
  • Personal Information: Although both COPPA and the Maine law define “personal information” generically as any “individually identifiable information,” the examples provided in the Maine law are less focused on the online collection of information than COPPA.
  • Health Related Information: The Maine law applies to the collection and use of both “personal information” and “health-related information,” whereas COPPA only applies to personal information.

This statute potentially could greatly complicate children’s marketing compliance, because it will create a marketing environment in Maine that is inconsistent with COPPA. Because the Maine legislature will not be in session until Jan. 6, 2010, and there have been no rumors of a special legislative session before September, the industry has been busy seeking a way to stay enforcement of the law. Among the bases for challenge that could forestall enforcement of the law might be:

  • Statutory Preemption: Section 1303(d) of COPPA preempts state or local government laws that are inconsistent with COPPA. The legislative history of COPPA reveals Congressional findings that: (1) adolescents over the age of 13 have privacy rights and a greater understanding of commercial content, and (2) a national uniform standard was necessary because of the global distribution of the Internet. With this knowledge, Congress chose to regulate only the online collection of information from children younger than 13, and included this preemption provision to specifically guard against a patchwork of inconsistent regulation.
  • Dormant Commerce Clause: Under Pike v. Bruce Church, 397 U.S. 137 (1970), if “the burden imposed . . . is clearly excessive in relation to the putative local benefit, and if the local interest can be promoted by other regulations that have a lesser impact on interstate activities,” the court may strike down a state law that burdens interstate commerce. Courts have invalidated a number of Internet-related state laws (regarding matters such as obscenity and SPAM regulation) on these grounds. In this case, the Maine law would be excessive because it forces out-of-state websites to treat Maine users differently – or to treat all Internet users as if they were located in Maine. Further, the interest of protecting children’s activities online is already addressed in COPPA, a uniform federal statute that has less impact on interstate commerce.First Amendment Commercial Speech: Under Central Hudson Gas v. Public Service Commission, 447 U.S. 557 (1980), commercial speech that is not illegal or deceptive is afforded First Amendment protection. Courts may overturn statutes where the government does not demonstrate that its regulation: (1) directly advances a substantial government interest, and (2) is no more restrictive of speech than necessary. In this case, the Maine statute is overbroad and would not directly advance the government’s interest of protecting children’s activities online – the statute pertains to any collection of a youth’s information whether online or offline. Likewise, advertisers could find less restrictive and less comprehensive approaches to deter the perceived harm. For example, a parent could monitor his child’s computer use, and prevent the child from providing personal information. Or, parents could purchase “Net Nanny” software, which has settings to prevent personal information disclosure. Both of these solutions require no regulation at all.
  • Higher Value First Amendment Concerns: This statute has the potential to raise issues justifying a higher level of judicial scrutiny. For example, if government regulation could cause a chilling effect on any form of speech or regulate political speech, courts generally afford the speech strict scrutiny. In this case, it is not out of the realm of reasonableness to assume that some website operators could avoid information collection to the 14- to 17-year-old age group altogether, chilling all forms of youth marketing. Or, for political speech matters, groups like the Young Democrats or the Young Republicans may want to avoid collecting youth information as well, because much political activity could be viewed as marketing (i.e., party donation solicitations and memorabilia sales e-mails).

The news on the front is that the AG of Maine understands and supports the stay. At least we know for sure the AG will not be bringing any actions under this law until the legislature revises it. It is critical that a stay be put in place to ensure that the industry is not inundated with nuisance private lawsuits for violation of the law. On the whole, however, things are moving in the right direction.