Before the MAINE STATE LEGISLATURE

In the Matter of

) ) An Act To Protect Minors from Pharmaceutical ) Marketing Practices ) )

LD 1677

Written Testimony of Berin Szoka, Senior Fellow, The Progress & Freedom Foundation (“PFF”)* Berin Szoka, Senior Fellow at The Progress & Freedom Foundation (“PFF”) and Director of PFF’s Center for Internet Freedom1 offers the following comments the proposed “An Act To Protect Minors from Pharmaceutical Marketing Practices”2 currently pending in the Maine Legislature. The bill provides the following official summary: This bill prohibits the collection and use of personal information collected on the Internet from a minor who is at least 13 years of age and under 17 years of age for the purposes of pharmaceutical marketing in violation of rules adopted by the Attorney General. The bill requires the Attorney General to adopt rules consistent with the federal Children's Online Privacy Protection Act of 1998
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The Progress & Freedom Foundation is a market-oriented, non-partisan and non-profit (501(c)(3)) think tank based in Washington, D.C. that studies the digital revolution and its implications for public policy. PFF’s mission is to educate policymakers, opinion leaders, and the public about issues associated with technological change, based on a philosophy of limited government, free markets, and individual sovereignty. Szoka is a recognized expert in cyberlaw and online privacy who has spoken at numerous Washington policy events, including the Federal Trade Commission’s Exploring Privacy Roundtable in December 2009. See Comments of Berin Szoka, Senior Fellow, The Progress & Freedom Foundation, to the FTC Privacy Roundtables, Privacy Trade-Offs: How Further Regulation Could Diminish Consumer Choice, Raise Prices, Quash Digital Innovation & Curtail Free Speech, Dec. 7, 2009, www.pff.org/issues-pubs/filings/2009/111009-FTC-privacy-workshopfiling.pdf. Before joining PFF in May 2008, Szoka practiced communications and Internet law at the global law firm of Latham & Watkins LLP and the communications boutique of Lawler Metzger Milkman & Keeney, LLC, and clerked for the Hon. H. Dale Cook, Senior U.S. District Judge for the Northern District of Oklahoma. Szoka received his Bachelor's degree in economics from Duke University and his juris doctor from the University of Virginia School of Law, where he served as Submissions Editor of the Virginia Journal of Law and Technology. He is admitted to practice law in D.C. and California (inactive). The views expressed in this report are the author’s own, and are not necessarily the views of the PFF board, fellows or staff. The mission of PFF’s Center for Internet Freedom is to advance a comprehensive market-oriented approach to Internet policy issues. An Act To Prevent Predatory Marketing Practices against Minors, LD 1677 (hereinafter the “Proposed Law”), www.mainelegislature.org/legis/bills/bills_124th/billtexts/SP064901.asp

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*COPPA+ … which regulates the collection and use of personal information from children under 13 years of age on the Internet. The rules, which are routine technical rules, must define “pharmaceutical marketing” in a manner that includes the business of advertising or otherwise promoting the sale of prescription and over-the-counter drugs, as regulated by the United States Food and Drug Administration, and ensures the adequate protection of the health and safety of minors who are at least 13 years of age and under 17 years of age. The bill establishes that a violation is an unfair trade practice as prohibited by the Maine Unfair Trade Practices Act.3

I. Introduction: COPPA 2.0 Laws in General
Maine’s passage of “An Act To Prevent Predatory Marketing Practices against Minors” in the summer of 20094 was deeply disturbing both in itself and as part of a larger trend at the state level to expand the Children’s Online Privacy Protection Act (COPPA) of 19985 to apply to adolescents (minors age 13 through 17). Such laws have been introduced in North Carolina,6 Georgia,7 Illinois8 and New Jersey.9 While the intentions of these “COPPA 2.0” efforts are undoubtedly noble (if somewhat vague), such laws would have a number of negative unintended consequences because of the fundamental technical architecture of the Internet, as Adam Thierer (PFF’s President) and I explained in our 35-page paper, COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech, published in May 2009.10
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Id. An Act To Prevent Predatory Marketing Practices against Minors, LD 1183, 124 Leg., 1 Reg. Sess. (Me. 2009), www.mainelegislature.org/legis/bills/bills_124th/chapters/PUBLIC230.asp 15 U.S.C. §§ 6501-6506. S.B. 132, 2007 Gen. Assemb., Reg. Sess. § 8 (N.C. 2007), available at www.ncga.state.nc.us/Sessions/2007/Bills/Senate/HTML/S132v3.html; see also Roy Cooper, Protecting Children from Sexual Predators: SB 132, July 24, 2007, www.ncdoj.com/DocumentStreamerClient?directory=WhatsNew/&file=S132%20Summary%20final.pdf; see also Adam Thierer, The Progress & Freedom Foundation, Age Verification Showdown in North Carolina, PFF Blog, July 26, 2007, http://blog.pff.org/archives/2007/07/age_verificatio.html. S.B. 59, Gen. Assemb., 2007-2008 Leg. Sess. (Ga. 2007), available at www.legis.ga.gov/legis/2007_08/fulltext/sb59.htm. H.B. 1312, 96th Gen. Assemb., Synopsis as Introduced (Il. 2007), available at www.ilga.gov/legislation/billstatus.asp?DocNum=1312&GAID=10&GA=96&DocTypeID=HB&LegID=43038&Ses sionID=76. A.B. 108, Gen. Assemb., 213th Leg. Sess. (N.J. 2008), available at www.njleg.state.nj.us/2008/Bills/A0500/108_I1.HTM. Berin Szoka & Adam Thierer, The Progress & Freedom Foundation, COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech, Progress on Point 16.11, June 2009, www.pff.org/issuespubs/pops/2009/pop16.11-COPPA-and-age-verification.pdf; see also The Progress & Freedom Foundation, Online Child Safety, Privacy, and Free Speech: An Overview of Challenges in Congress & the States, PFF
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Expanding COPPA to cover older children would be unconstitutional because COPPA 2.0 laws:   Restrict the rights of adolescents to access legal and potentially beneficial information, even though these rights are not fully equivalent to those of adults; Also burden the free speech rights of adults to the extent that such laws force online operators to presume that everyone they deal with online might be a child and to require adults to rebut this presumption through age verification—which would restrict free speech online and essentially converge with the unconstitutional Children’s Online Protection Act (COPA),11 another 1998 law sometimes confused with COPPA; Impose an undue burden on the rights of online operators to engage in truthful speech that is not misleading about legal and potentially beneficial pharmaceuticals; and Violate the Commerce Clause of the U.S. Constitution when enacted at the state level, since Internet activity clearly represents interstate commerce that states have no authority to regulate.

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Such laws are also generally inadvisable from a policy perspective in that they would:  Come at the expense of the clear benefits pharmaceutical advertising provides to consumers, including adolescents, such as increasing information about their choices and lowering pharmaceutical prices through competition; Potentially reduce, rather than enhance, the privacy of adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data); Likely be the subject of massive fraud or evasion since it is not always possible to definitively verify the parent-child relationship, or because the system could be “gamed” in other ways by determined adolescents; Do nothing to prevent offshore sites and services from operating outside these rules; and Present major practical challenges for law enforcement officials in the face of such evasion by both domestic users and offshore sites.

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II. Comparison: Maine’s Current Law & Proposed Bill
In some ways, both Maine’s existing law and the law currently proposed to replace it are less problematic than COPPA 2.0 bills considered in other states—none of which have actually been enacted into law. Unlike these bills, neither the existing law nor the Proposed Law would apply to all online activity, but instead require verifiable parental consent only for the collection of

Congressional Seminar, July 27, 2009, http://www.pff.org/events/pastevents/072709-online-child-safetyprivacy-free-speech.asp.
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47 U.S.C. § 231. While COPPA governs sites “directed at” children, COPA would have required age verification for content deemed “harmful to minors.” COPA has been struck down on First Amendment grounds. See infra at note 41 and associated text.

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information for “marketing” purposes (although that term is defined so ambiguously as to apply to mere “promotion” of pharmaceuticals). Nonetheless, all the concerns listed above would still apply to such marketing restrictions. Only in the third category—the free speech rights of the online operators—would the basic constitutional analysis change, but only in terms of the burden that must be satisfied by the government in defending regulation. As the Supreme Court has repeatedly noted, even purely “commercial speech” (that which does “no more than propose a commercial transaction”12) is “not wholly outside the protection of the First Amendment.”13 While truthful, non-misleading commercial speech generally receives intermediate, rather than strict, scrutiny, the government must nonetheless demonstrate that it has a “substantial interest” in regulating the speech, that the regulation directly advances that interest, and that the regulation is narrowly tailored to that interest.14 In this case, it remains unclear precisely what the government’s interest is. In other words, what is the “harm” from which the government is trying to protect adolescents? This threshold question remains unanswered—and joins all the other practical concerns listed above. In some ways, however, the Maine law enacted last summer was considerably more problematic than the COPPA bills proposed in other states. The Maine legislature and Attorney General deserve credit for recognizing these problems and attempting to remedy them by introducing the proposed bill as a substitute for the current law, which the Maine Attorney General agreed not to enforce after a constitutional challenge in the fall.15 In some important ways, the current proposal marks a significant improvement over that law. Most notably, the bill removes two key provisions that would have led to staggeringly draconian outcomes if it were actually to be enforced—and significant chilling effects even without, or prior to, enforcement:  A statutory minimum penalty of $10-20,000 for a first violation and $20,000 for other violations (with every act of unauthorized collection or use potentially constituting a separate offense); and A private right of action.

Even so, the current bill remains deeply problematic for the reasons noted above. Below is a section-by-section analysis of the bill that highlights key problems, which are then further developed in a discussion of the broad concerns raised by the bill.

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Pittsburgh Press Co. v. Human Rel. Comm’n, 413 U.S. 376, 85 (1973). Va. Pharmacy Bd. v. Va. Consumer Council, 425 U.S. 748, 776 (1976) (internal quotations omitted). Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). Braden Cox, Maine Committee Does the Right Thing, Recommends Repeal of Marketing Law, The Technology Liberation Front, Oct. 20, 2009, http://techliberation.com/2009/10/20/maine-committee-does-the-rightthing-recommends-repeal-of-marketing-law/

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III. Section-by-Section Analysis
1. Definition. As used in this section, “minor” means a person who is at least 13 years of age and under 17 years of age. COPPA currently requires parental consent for the collection and use of information from children under 13. But as originally introduced in Congress in June 1998, COPPA would have required “reasonable efforts to provide the parents with notice and an opportunity to prevent or curtail the collection or use of personal information” for kids 13-16 and would also have created a parental right of access to any information collected about their children.16 After hearing concerns about the First Amendment implications of the law for adolescents,17 Congress wisely removed these provisions of the bill, leaving the law applicable only to minors under 13. Yet the Maine Bill would do what Congress never considered, even in the original bill, by applying COPPA’s verifiable parental consent framework to adolescents 13 and above. As noted below, this raises profound First Amendment problems because of the difficulties with any form of age verification inherent in the technical architecture of the Internet. 2. Prohibition. A person may not collect and use personal information collected on the Internet from a minor for the purposes of pharmaceutical marketing in violation of rules adopted by the Attorney General under subsection 3. This is the key operative section of the law. Most notably, the law does not specify a knowledge requirement. Omitting so critical a provision as a knowledge requirement from a statute is a dangerous statutory drafting practice, as it makes it impossible for someone of ordinary intelligence to understand what the law requires on its face—a basic precept of the rule of law. The bill raises two separate but parallel knowledge problems. First, as noted below, subsection 3 requires the state Attorney General to draft rules that are “consistent with and to the extent possible the same as” those issues by the FTC under COPPA. Thus, the Proposed Law indirectly imports COPPA’s requirement that an operator either (1) have “actual knowledge” that a user is, in fact, under 13, or (ii) have constructive knowledge (a term not actually used in COPPA) of this by virtue of operating a site or service “directed at” such children. In practice, however, this framework becomes unworkable when extended above age 13 because, for every year above that age, it becomes significantly more difficult to discern whether a site is “directed at” that age group and because such sites are much more likely to be used by adults than are sites geared to children under 13—thus implicating the free speech rights of adults who might be subjected to age verification mandates as well as those of online speakers trying to a market or “promote” a truthful, lawful product.

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Children's Online Privacy Protection Act of 1998, S. 2326 as introduced, 105 Cong. (1998), available at http://thomas.loc.gov/cgi-bin/query/z?c105:S.2326: Testimony of Deirdre Mulligan, Staff Counsel, Center for Democracy and Technology, before the Senate Committee on Commerce, Science and Transportation, Subcommittee on Communications, Sep. 23, 1998, available at http://old.cdt.org/testimony/980923mulligan.shtml.

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Second, the Proposed Law fails to specify that, to be liable, an Internet site or service operator must know—or even that they ought to know—that the user from whom they are collecting information is actually in Maine. Thus, the law creates a strict liability offense: an out-of-state website may be held liable for inadvertent collection of information from adolescents in Maine. Federal courts are highly likely to strike down such a law under the Constitution’s so-called “Dormant Commerce Clause” because of its effects on interstate commerce. Specifically, to avoid this liability, website operators across the country—indeed, around the world—would have to either abide by Maine’s law for all users or attempt to determine whether every user is in Maine in order to apply special procedures to users that appear to be coming from Maine (or simply to shut off service to Maine). Even if this strict liability standard were replaced with a requirement of constructive or actual knowledge, the law would likely still pose an undue burden on interstate commerce by opening the door to a patchwork of inconsistent state laws governing communications in the inherently interstate medium of the Internet. At the very least, site operators might have to collect additional location information in order to determine whether a user is actually in Maine—and then implement separate procedures for dealing with that user. Finally, as a matter of basic statutory drafting, it makes little sense for the law to prohibit only the “collection and use.” The law as drafted could be easily circumvented if one party “collected” personal information and another “used” it—which is probably not the intention of the law’s drafters. If nothing else, this apparent drafting error suggests that the bill requires careful and thorough re-consideration. 3. Rules. In order to ensure the health and safety of minors, no later than one year after the effective date of this section, the Attorney General shall adopt rules governing the collection and use of personal information collected on the Internet from a minor for the purposes of pharmaceutical marketing. The rules must be consistent with and to the extent possible the same as those established under [COPPA]. The rules must define “pharmaceutical marketing” in a manner that includes the business of advertising or otherwise promoting the sale of prescription and over-the-counter drugs, as regulated by the United States Food and Drug Administration…, and that ensures the adequate protection of the health and safety of minors. This broad definition of “pharmaceutical marketing” probably exceeds the Supreme Court’s definition of “commercial speech” as that which does “no more than propose a commercial transaction."18 If Maine wants to avoid applying its law to non-commercial speech, which enjoys greater protection under the First Amendment, it should narrow its definition to speech that clearly proposes the sale of pharmaceuticals. Either way, Maine will bear the burden of proof in an inevitable First Amendment challenge in defining the “governmental interest” that justifies its imposition on the speech rights of both adolescents and adults, both inside and outside of Maine. Again, while the bill implies that its

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Pittsburgh Press Co. v. Human Rel. Comm'n, 413 U.S. 376, 85 (1973).

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purpose is to “ensure” the “protection of the health and safety of minors,” it is unclear what factual basis the legislature has for concluding that either is at risk from the practices that would be regulated by the Proposed Law. Legislation typically including findings of fact for precisely this purpose: to put the legislature on record in specifying why it has concluded government intervention is necessary. This precept is no mere formality of statutory drafting: It embodies the basic presumption undergirding a free society and free market that freedom, not regulation, is the default and impositions upon the freedoms of any actors in society (be they individuals or corporations) for whatever purpose must be somehow justified.

IV. General Problems Raised by the Bill
A. First Amendment Rights of Minors
The law before the Maine legislature would extend COPPA’s current verifiable parental consent requirement to adolescents ages 13-16, even after Congress emphatically rejected this approach. This approach—which could quite literally be summarized as “Mother, may I?”— directly infringes on the First Amendment rights of adolescents to access lawful information without parental permission. While the First Amendment rights of minors may not be on par with those of adults, adolescents do have the right to access certain types of information and express themselves in certain ways.19 These rights are not derivative of their parents’ or guardians’ rights, but are the individual minors’ personal rights. Minors “are ‘persons’ under our Constitution… possessed of fundamental rights which the state must respect,” 20 and “are entitled to a significant measure of First Amendment protection.”21 The Supreme Court has held that “constitutional rights do not mature and come into being magically only when one attains the state-defined age of majority.”22 Indeed, mature minors possess close to the “full
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See Theresa Chmara & Daniel Mach, Minors' Rights to Receive Information Under the First Amendment, Memorandum from Jenner & Block to the Freedom To Read Foundation, Feb. 2, 2004, www.ala.org/ala/aboutala/offices/oif/ifissues/issuesrelatedlinks/minorsrights.cfm (summarizing case law regarding minors’ first amendment rights, especially in schools and in the context of mandates that public libraries filter Internet content); United States v. American Library Ass'n, 123 S. Ct. 2297 (2003), available at htttp://laws.findlaw.com/us/000/02-361.html (upholding the constitutionality of a filtering software system applicable to minors); see generally, Tinker v. Des Moines Ind. Comm. School Dist., 393 U.S. 503 (1969) (upholding students’ rights to wear protest armbands and affirming that minors have speech rights) available at www.oyez.org/cases/1960-1969/1968/1968_21; cf. Morse v. Frederick, 551 U.S. 393 (2007), available at www.oyez.org/cases/2000-2009/2006/2006_06_278/ (holding that the First Amendment rights of students in school and at school-supervised events are not as broad as those of adults in other settings). Tinker v. Des Moines Indep. Cmty. Sch. Dist., 393 U.S. 503, 511 (1969); see Planned Parenthood v. Casey, 505 U.S. 833, 899 (1992) (parental consent statute must contain method by which minor can obtain abortion without parental consent); In re Gault, 387 U.S. 1, 13 (1967) (minors’ right to criminal due process). Erznoznik v. City of Jacksonville, 422 U.S. 205, 212-213 (1975) (citation omitted). Planned Parenthood of Cent. Mo. v. Danforth, 428 U.S. 52, 74 (1976) (minors’ right to abortion). See also Bellotti v. Baird, 443 U.S. 622, 635 n.13 (minors possess close to the “full capacity for individual choice which is the presupposition of First Amendment guarantees”); Catherine Ross, An Emerging Right for Mature Minors to Receive Information, 2 U. Pa. J. Const. L. 223 (1999); Lee Tien & Seth Schoen, Reply Comments of the Electronic Frontier Foundation filed in Implementation of the Child Safe Viewing Act; Examination of Parental Control Technologies for Video or Audio Programming, MB Docket No. 0926, Federal Communications

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capacity for individual choice which is the presupposition of First Amendment guarantees.”23 Perversely, Maine law would recognize that a 16 year-old is capable of consenting to sexual intercourse,24 but deny that near-adult the right to share information about themselves in order to ask to receive more information about products related to sexual health or contraception. While Federal courts have upheld laws requiring parental notification before minors have abortions performed or even parental consent (subject to a “judicial bypass” where judges may grant consent if a girl’s parents are unwilling to do so), the state’s interest in ensuring parental involvement in such a major medical procedure is far greater than in “protecting” adolescents from truthful information about legal products. Importantly, these abortion laws do not involve speech rights and even they do not ultimately require “verifiable parental consent.” The concerns expressed in Congressional testimony offered by the Center for Democracy & Technology explaining the need for Congress to limit COPPA to children under 13 still ring true today—nearly twelve years later: Under the bill each time a 15 year old signs-up to receive information through email his or her parent would be notified. For example if a 15 year old visits a site, whether a bookstore or a women's health clinic where material is made available for sale and requests information about purchasing a particular book or merely inquires about books on a particular subject (abuse, religion) using their email address the teenager's parent would be notified. This may chill older minors in pursuit of information.25 While the Maine law indeed is narrower in its scope than COPPA, the area of “pharmaceutical marketing” is one where a requirement of verifiable parental consent may do the most harm in chilling adolescents’ access to information about pharmaceuticals. Teenagers are notoriously reluctant to share information with their parents and may be discouraged from signing up to receive information about pharmaceuticals that may be relevant to a wide variety of potentially sensitive needs, from issues as seemingly innocuous as acne, shaving or body odor (which can still cause great embarrassment to teenagers) to those as emotionally fraught as weight-loss, addiction or depression to those as morally contentious as contraception and abortion. Under the COPPA framework, as CDT noted back in 1998, a child would require parental permission to sign up for a simple e-mail list—and the same would be true for interactive discussion fora. Indeed, under an expansive view of the COPPA framework, the same might also be true for evolving forms of social media, such as “following” an individual or organization
Commission, May 18, 2009, http://fjallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6520216901.
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Bellotti v. Baird, 443 U.S. 622, 635 n.13 (quoting Ginsberg v. New York, 390 U.S. 629, 649 (1968)). Maine Criminal Code, tit. 17-A, § 254 (2003), available at www.mainelegislature.org/legis/statutes/17A/title17-Asec254.html Testimony of Deirdre Mulligan, supra note 17.

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on Twitter or becoming a “Fan” of their “Page” on Facebook since the FTC has defined “personal information” to include names and “[a]n e-mail address or other online contact information, including but not limited to an instant messaging user Identifier, or a screen name that reveals an individual’s e-mail address.”26 While the Proposed Law would not appear to restrict the ability of users to directly access information about pharmaceuticals by, for example, using search engines to find information about a particular drug or symptom (so long as they shared no information about themselves), the law would restrict their ability to ask to be provided with information about legal, safe and effective pharmaceuticals. Courts would likely recognize this as an infringement of their speech rights, which include the right to access information. This recognizes the simple practical fact that advertising and marketing play a critical role in providing consumers with useful information about products they simply would not have found, or even thought to look for, on their own.27

B. First Amendment Rights of Adults
The FTC has explained Congress’s rationale for drawing the line drawing the line at the age of 13 in COPPA: Congress and industry self-regulatory bodies have traditionally distinguished children aged 12 and under, who are particularly vulnerable to overreaching by marketers, from children over the age of 12, for whom strong, but more flexible protections may be appropriate. In addition, distinguishing adolescents from younger children may be warranted where younger children may not understand the safety and privacy issues created by the online collection of personal information.28 But this age also corresponds to an important threshold in the real world for applying COPPA— and one that ensures that COPPA does not infringe on the First Amendment rights of adults. At about this age, adolescents begin to share interests with adults in ways that children 12 and below do not; if left to their own devices, adolescents (minors age 13 through 17) would spend
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16 C.F.R. § 312.2. See infra Section IV.D (“The Benefits of Advertising & Marketing”). Federal Trade Commission, Frequently Asked Questions about the Children's Online Privacy Protection Rule, Question 8 (“Why does COPPA apply only to children under 13? What about protecting the online privacy of teens?”), www.ftc.gov/privacy/coppafaqs.shtm. The FTC also reminds companies that: websites’ information practices regarding teens and adults are subject to Section 5 of the FTC Act, which prohibits unfair or deceptive acts and practices. See Staff Opinion Letter to Center for Media Education (July 15, 1997) for guidance on how Section 5 applies to information practices involving teens. In addition, recent concern about the risks of child participation on social networking websites led the FTC to issue a set of safety tips for social networking. See “Social Networking Sites: A Parents’ Guide” (September 2007), available at www.ftc.gov/opa/2006/05/socialnetworking.shtm; see also www.onguardonline.gov/docs/onguardonline_socialnetworking.pdf.

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far more time on “general audience”29 websites than would children (minors under the age of 13). Thirteen is probably about the point at which this transformation begins to accelerate. But regardless of precisely when it happens, it should be apparent that the sites favored by adolescents will be difficult to distinguish as “adolescent-oriented” because they are rarely, if ever, as thoroughly dominated by adolescents as “child-oriented” sites are by children 12 and under. This problem gives rise to the significant constitutional concerns raised by implementation of the constructive knowledge element of COPPA 2.0 proposals. As noted above, the Maine law imports the existing COPPA framework, requiring that an operator obtain verifiable parental consent if they either (1) have “actual knowledge” that a user is, in fact, under 13, or (ii) have “constructive knowledge” (a term not used in COPPA) of this by virtue of operating a site or service “directed at” such children. Congress developed this framework in an attempt to confront the anonymity inherent in the technical nature of the Internet—and the fact that true age verification is impossible and any attempt at age verification is cumbersome. Federal courts have found that there is “no evidence of age verification services or products available on the market to owners of Web sites that actually reliably establish or verify the age of Internet users. Nor is there evidence of such services or products that can effectively prevent access to Web pages by a minor.”30 Few public databases exist that could be referenced to conduct such verifications for minors, and most parents do not want the few records that do exist about their children (e.g., birth certificates, Social Security numbers, school records) to become more easily accessible.31 Indeed, concerns about those records being compromised or falling into the wrong hands have led to legal restrictions on their accessibility.32 COPPA 1.0 works in practice without implicating the First Amendment rights of adults because it does not require age verification for all users. Instead, it applies only when the site knows or should know that a user is a child. COPPA’s constructive knowledge element applies only to a virtually distinct “Junior Internet,” which has little overlap between adults and children under 13, and because many parents use technological controls to keep their children (but not their adolescents) within this Junior Internet. Sites and services that might attract significant numbers of children are expected to ask for a user’s age—which, while easily circumvented by a child who knows well enough to lie, at least ensures that the site can refuse service to a child under 13 or obtain their parent’s verifiable consent, and thus collecting information from children the site actually knows to be children.

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The term “general audience” is commonly used instead of “adult-oriented” for content that is not directed at children. ACLU v. Gonzales, 478 F. Supp. 2d 775, 806 (E.D. Pa. 2007). See Adam Thierer, The Progress & Freedom Foundation, Age Verification Debate Continues; Schools Now at Center of Discussion, PFF Blog, Sept. 25, 2008, http://blog.pff.org/archives/2008/09/age_verificatio_1.html. Various laws and regulations have been implemented that shield such records from public use, including various state statutes and the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. § 1232g, www.ed.gov/policy/gen/guid/fpco/ferpa/index.html.

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The problem is that sites used by 13-16-year olds cannot be so easily distinguished from the Internet at large (including sites that market or “otherwise promote” pharmaceuticals). In determining whether a website or service is “directed at children” under COPPA, the FTC currently considers the site or service’s “subject matter, visual or audio content, age of models [that appear in photos or videos on the site], language or other characteristics of the website or online service, as well as whether advertising promoting or appearing on the website or online service is directed to children…. and whether a site uses animated characters.”33 The following excerpts from FTC complaints illustrate how the agency has applied these criteria: The … subject matter *of www.lilromeo.com+ is Lil’ Romeo, a twelve-year-old recording artist who “enjoys ‘just being a regular kid.’” The website features content directed to children such as an animated game in which the player helps Lil’ Romeo save an elementary school from aliens by answering simple math and history questions. The website also features music and lyrics from Lil’ Romeo’s album “Game Time,” which is “about having fun, and also about, you know, kids*’+ things…”34 And: Defendant operates the www.etch-a-sketch.com website, which provides information about its toys, including the “Etch A Sketch” drawing toy. The subject matter, visual content, and language of this website are directed to children under the age of 13. For example, the site features a cartoon character named “Etchy” - an Etch A Sketch sporting sunglasses, purple hair and legs. Etchy invites visitors to play “cool games,” such as drawing with an online Etch A Sketch, finding hidden numbers, letters and shapes, and coloring pictures of Etchy and friends. The site also contains an “interactive story” titled, “Etchy Goes to a Birthday Party.”35 The FTC settled both cases with consent decrees—like, apparently, all the FTC’s COPPA enforcement actions.36 These examples demonstrate that subjective standards can sometimes work reasonably well in certain contexts. As Justice Potter Stewart famously said of obscenity, “I know it when I see it.”37 The same could probably be said, in many cases, about what constitutes child-oriented content; and this approach seems to have worked well enough for the FTC’s COPPA enforcement efforts.

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16 C.F.R. § 312.2 (definition of “Website or online service directed to children”). U.S. v. UMG Recordings, Inc., Civil Action No. CV-04-1050, Complaint at 4-5 (C.D. Ca. 2004), www.ftc.gov/os/caselist/umgrecordings/040217compumgrecording.pdf. U.S. v. The Ohio Art Company, Complaint, ¶ 12 (N.D. Oh. 2002), www.ftc.gov/os/2002/04/ohioartcomplaint.htm. See Federal Trade Commission, Children's Privacy Enforcement Cases, www.ftc.gov/privacy/privacyinitiatives/childrens_enf.html (including a consent decree for each case). Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring).

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But how would such an approach work in determining whether a pharmaceutical marketing site is directed to teens? Would an acne site be considered “directed at” adolescents age 13-16 even though many acne sufferers are in their late teens or early twenties, or continue to suffer from acne into their thirties and perhaps even beyond? Unless the site is actually called something like “Teen Health” or so explicitly focuses on teen matters that its “direction to” teenagers is unmistakable and its audience would be composed as overwhelmingly of teenagers as sites covered by COPPA are of children under 13, the Proposed Law could not be implemented in the same way as COPPA. Specifically, significant numbers of adults would be subjected to age verification requirements. This unintended practical consequence would trigger much the same constitutional arguments against COPA, which would have required that all website operators restrict access to material deemed “harmful to minors” by minors under the age of 17 and therefore requires age verification of all users who attempt to access such content (in order to identify minors).38 After a decade-long court battle over the constitutionality of COPA, the U.S. Supreme Court in January 2009 rejected the government’s latest request to revive the law, meaning it is likely dead.39 While the Courts that rejected COPA did so largely on the grounds that age verification would deter anonymous access to potentially sensitive material (such as pornography), the same basic concerns about chilling adult speech would also apply to any law that required an adult to prove they were actually an adult before sharing certain basic information about themselves such as a name and e-mail address as part of a request to receive more information about pharmaceuticals. If the law forces users to provide more information about themselves than they are willing to provide, such as a credit card (the most common indirect age verification mechanism), some users will be discouraged from accessing the desired information. As the Third Circuit recognized in striking down COPA: Requiring users to go through an age verification process would lead to a distinct loss of personal privacy. Many people wish to browse and access material privately and anonymously, especially if it is sexually explicit. Web users are especially unlikely to provide a credit card or personal information to gain access to sensitive, personal, controversial, or stigmatized content on the Web. As a result of this desire to remain anonymous, many users who are not willing to access information non-anonymously will be deterred from accessing the desired information.40 Again, anonymity is not a binary matter: A user will feel less anonymous if they are required to provide credit card information in addition to the information they want to provide, such as
38

COPA made it illegal to “knowingly … make*+ any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors.” 47 U.S.C. § 231. See Adam Thierer, The Progress & Freedom Foundation, Closing the Book on COPA, PFF Blog, Jan. 21, 2009, http://blog.pff.org/archives/2009/01/closing_the_boo.html. See also Alex Harris, Child Online Protection Act Still Unconstitutional, http://cyberlaw.stanford.edu/packet/200811/child-online-protection-act-stillunconstitutional. Gonzales, 478 F. Supp. 2d 775, 805.

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their e-mail. Information about pharmaceuticals can be clearly be considered “sensitive, personal, controversial, or stigmatized content” by some users, as in the examples noted above.

C. First Amendment Rights of Pharmaceutical Marketers & “Promoters”
The necessary corollary of discouraging adults from accessing certain content anonymously— and thereby deterring some users from accessing that content—is that any COPPA 2.0 law would, like COPA, necessarily reduce the audience size of online operators subject to age verification mandates. Furthermore, such mandates would encourage websites to self-censor themselves to avoid offering content they fear could be considered “directed at” adolescents because doing so might subject them to an age verification mandate—or to legal liability if they fail to implement age verification. The Third Circuit cited all of these burdens on the free speech rights of website operators in striking down COPA.41 And all apply to the proposed Maine law to the extent that the law would inevitably apply to some adults because, as explained above, adults and adolescents use the same websites in a way that adults and children under 13 do not. For instance, as noted above, a site that offers information about acne medication and allows users to sign up to receive more information is likely to attract both adolescents and older teens as well as adults. Requiring users above 17 to prove they are not 16 or below would necessarily restrict the adult audience of these sites. This concern is particularly problematic to the extent that the proposed Maine law would, unlike COPA, apply not merely to commercial speech42 but potentially also to non-commercial speech as well. As noted above, the Maine law uses a broad definition of “pharmaceutical marketing” to include “the business of advertising or otherwise promoting the sale of prescription and over-the-counter drugs.” Under this definition, the law would apply not merely to for-profit condom manufacturers, but also to advocacy groups that merely “promote” the use—and therefore the sale—of condoms as a form of contraception or a precaution against sexually-transmitted infections. Such a burden on non-commercial speech would demand even higher First Amendment scrutiny. Although the debate about the First Amendment treatment of commercial speech continues to rage, it should be noted that the Supreme Court has made it clear commercial speech is deserving of First Amendment protection like other forms of speech. Several Supreme Court decisions over the past four decades have highlighted the important role that advertising and

41

See ACLU III, 534 F.3d at 196-97 (citing Gonzales at 804). The Court held that websites “face significant costs to implement *COPA’s age verification mandates+ and will suffer the loss of legitimate visitors once they do so.” Id. at 197. 47 U.S.C. 231(1) (“Whoever knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors shall be fined not more than $50,000, imprisoned not more than 6 months, or both.”) (emphasis added).

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marketing plays in facilitating the flow of information that is beneficial to society. 43 “Both the individual consumer and society in general may have strong interests in the free flow of commercial information,” the Court noted in Va. Pharmacy Bd. v. Va. Consumer Council (1976).44 “As to the particular consumer’s interest in the free flow of commercial information, that interest may be as keen, if not keener by far, than his interest in the day’s most urgent political debate,” Justice Blackmun stressed in that decision.45

D. The Benefits of Advertising & Marketing
The above discussion of commercial free speech rights evinces a growing recognition by the courts of a growing consensus in the economic literature that advertising itself is an important type of speech that communicates relevant information to the public. As Nobel laureate economist George Stigler pointed out in his now legendary 1961 article on the economics of information, advertising is “an immensely powerful instrument for the elimination of ignorance.”46 And as advertising scholar John Calfee has argued, “advertising has an unsuspected power to improve consumer welfare” since it “is an efficient and sometimes irreplaceable mechanism for bringing consumers information that would otherwise languish on the sidelines.”47 More importantly, Calfee argues: Advertising’s promise of more and better information also generates ripple effects in the market. These include enhanced incentives to create new information and develop better products. Theoretical and empirical research has demonstrated what generations of astute observers had known intuitively, that markets with advertising are far superior to markets without advertising.48 These benefits must be weighed in the balance when considering the alleged harms of advertising. Any discussion of the effects of advertising on children in particular should begin by first recognizing, as Calfee concluded after an extensive survey of several decades of scientific literature, “by the age 10 or so, children develop a full understanding of the purpose of advertising and equally important, an active suspicion of what advertisers say.” 49 This healthy suspicion grows into intense skepticism among older youths. Thus, while younger children covered by COPPA may truly fail to appreciate the nature of advertising, justifying
43

“Constitutional protection for advertising is explicitly based upon the idea that freedom to advertise brings benefits to markets generally, especially consumers. The central argument in Supreme Court decisions overturning restrictions on advertising is that consumers can benefit from a free exchange of information – the ‘marketplace of ideas’ celebrated by authors and jurists since at least the time of John Milton.” John E. Calfee, Fear of Persuasion: A New Perspective on Advertising and Regulation, 107-8 (Monnaz, Switzerland: Agora Association, 1997). Va. Pharmacy Bd. v. Va. Consumer Council, 425 U.S. 748, 765 (1976). Id. at 763. George Stigler, The Economics of Information, Jour. of Political Economy, Vol. 69, No. 3, at 213 (June 1961). Calfee, supra note 43, at 96. Id. Calfee, supra note 43, at 59.

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paternalistic regulation to protect them from it, adolescents are not so vulnerable. Indeed, as Calfee notes, a 1994 literature review published by the US federal government’s National Institute for Alcoholism and Alcohol Abuse (NIAAA), concluded that “the general dislike and skepticism for advertising may result in adolescents tuning out most advertising they are exposed to, and may result in increased vigilance of advertising claims. This could result in adolescents being less influenced by advertising than adults.”50 Calfee explains that, in the 1960s and 70s, “Advertising to children came to be seen as profoundly different from advertising in general, bereft of advertising’s usual benefits and carrying more than the usual costs. The implication was that children and their families should be protected from receiving any advertising directed to children at all.” 51 This perception led the Federal Trade Commission to launch a crusade against advertising on children’s programming: In the late 1970s, the FTC staff proposed a ban on all television advertising to children under the age of 8, and a ban on television advertising for sugared products targeted at children aged 8 through 12. This proposal never came close to enactment. The Washington Post editorial page, normally a friend of FTC regulation, declared that the agency was trying to become the ‘national nanny.’ Criticism of FTC overreaching became widespread. Fighting to preserve its very existence, the FTC soon dropped its children’s advertising scheme.52 Since this regulatory disaster, economic literature has recognized that “Advertising to children, so often believed to be an exception to rule that advertising makes markets work better, actually provides one of the more compelling examples of the benefits of advertising.” 53 Even in the case of young children, advertising has dramatically driven down the prices of children’s toys by making markets more competitive: Sellers advertised their brands directly to children. The children asked their parents to buy the toys they saw on TV without caring how much they cost. The parents went to the store looking for the brands their children wanted. Then what happened? A lot of people might assume that the parents encountered higher prices because demand had been increased through advertising targeted at an ignorant audience (children). But this is another case where popular expectations are mistaken. One must take into account the competitive process. The ads ratcheted up competition at the retail level, so much so that parents in search of heavily advertised toys actually found lower prices. It was a remarkable
50

Id. at 61 (citing David W Stewart & Ronald Rice, Non-traditional Advertising and Promotions in the Marketing of Alcoholic Beverages, in Susan E Martin, ed. Research Monograph No 28, The Effects of the Mass Media on the Use and Abuse of Alcohol (1995), at 228) (emphasis added). Id. at 60. Id. at 60 (citing Susan Foote & Robert Mnookin, ‘The “Kid Vid” Crusade’, 61 (1980), available at www.nationalaffairs.com/public_interest/detail/the-kid-vid-crusade). Id. at 64.

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example of the indirect benefits of advertising, and it should be much better known than it is today.54 Calfee also explains the benefits of advertising about health information. He recounts in detail how the FTC’s victory over the FDA in allowing food manufacturers to tout the health benefits with truthful health claims of their products did much to drive demand for, and increase supply of, healthier foods—despite the FDA’s decades-long insistence that any product advertised with such claims must be re-classified as a “drug” and subjected to clinical testing so onerous that “health foods” hardly existed before the FTC’s courageous defense of the intelligence of ordinary consumers to choose for themselves among truthfully advertised products. 55 As Calfee concludes: Once unleashed from its regulatory prison, competitive advertising of health claims for foods proved to be pervasive, relentless (ask anyone in the packaged food business about this) and surprisingly extensive in its effects on information. Health claims induced changes in foods, in non-foods such as toothpaste, in publications ranging from Consumer Reports and university health letters to mainstream newspapers and magazines, and of course, consumer knowledge of diet and health. These rippling effects from health claims in ads demonstrated the most basic propositions in the economics of information. Useful information initially failed to reach people who needed it because information producers could not charge a price to cover the costs of creating and disseminating pure information. And, this problem was alleviated by advertising, sometimes in a most vivid manner.56 Thus, despite the common “Fear of Persuasion” that often drives advertising restrictions,57 advertising plays a critical role in educating all of us—including adolescents—about beneficial products and services.

E. Less Restrictive Alternatives to Regulation
First, if Maine is concerned about the effects of certain kinds of speech on adolescents, the best response is to counter that speech by promoting or supporting speech intended to educate teens about pharmaceuticals and to remedy whatever it is the state finds objectionable about pharmaceutical marketing—which, again, remains unclear, since the state has not specified what harm it has in mind. Such education could take place through schools, parents, or health care professionals. The Federal Trade Commission has already developed two excellent examples of awareness-building efforts: First, “You Are Here” provides a virtual mall that educates teens about advertising techniques, target marketing, suspicious claims, as well as

54 55 56 57

Id. at 62. Id. at 23-29. Id. at 33. See generally Calfee, supra note 43.

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online privacy, and various online scams.58 Second, “OnGuard Online” provides, for a broader audience, “practical tips from the federal government and the technology industry to help you be on guard against Internet fraud, secure your computer and protect your personal information.”59 Second, Maine can and should enforce its existing laws against unfair and deceptive trade practices—which are, of course, also punished by the Federal Trade Commission. 60 If a pharmaceutical company is engaging in truly “predatory” marketing practices—such as enticing teens with a fraudulent offer of a free iPod in order to get them to provide personal information—such practices are probably already illegal. Again, the state needs to be clear about precisely which “predatory practices” it is trying to thwart, rather than simply restricting all pharmaceutical marketing. Third, the state could promote parental empowerment tools. The Third Circuit drew on the Supreme Court’s 2004 decision striking down COPA on the grounds that “*b+locking and filtering software is an alternative that is less restrictive than COPA, and, in addition, likely more effective as a means of restricting children’s access to materials harmful to them.” 61 Similarly, parental control software already empowers parents to restrict adolescents’ access to sites that might collect information from their children for pharmaceutical marketing purposes. A simple black-list could be developed that would block access to websites run by drug manufacturers and other commercial ventures—perhaps accompanied by software that directs adolescents to non-profit sites that provide information about pharmaceuticals. Such a tool could be implemented by a parent concerned about their child’s exposure to pharmaceutical marketing. In all these cases, the state might actually have to spend money—in promoting education, in bolstering enforcement of existing laws or in encouraging self-help solutions—but these solutions are preferable to regulation for two reasons. First, as the Supreme Court held in a 2000 decision concerning blocking potentially objectionable content on cable television, “*t+echnology expands the capacity to choose; and it denies the potential of this revolution if we assume the Government is best positioned to make these choices for us.”62 Second, these solutions are likely to be at least as effective in preventing real harm to adolescents and in preparing our youth to use digital media wisely.

F. The Dormant Commerce Clause
Just as the Proposed Law’s potential application to adults creates a variety of First Amendment problems, the law’s potential application to users who are not Maine residents creates a variety
58 59 60

www.ftc.gov/youarehere/ www.onguardonline.gov/ See supra note 28 (noting that the FTC has reminded websites that their “information practices regarding teens and adults are subject to Section 5 of the FTC Act, which prohibits unfair or deceptive acts and practices.”) Id. at 198 (quoting ACLU v. Mukasey, 534 F.3d 181, 198 (2008)). United States v. Playboy Entertainment Group, 529 U.S. 803, 818 (2000).

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of problems under the Commerce Clause of the U.S. Constitution since Internet activity clearly represents interstate commerce that states have no authority to regulate. The Internet is a uniquely “interstate” medium whose architecture makes it difficult, if not impossible, to isolate the effects of state regulation on residents of that state. There is a long string of “Dormant Commerce Clause” cases that have consistently struck down state laws attempting to regulate commerce (or speech) that originates or takes place outside the state’s borders. 63 If it is not possible for a state government to isolate the effects of its regulatory actions to merely those operators or users living within its jurisdiction, federal courts will block such measures. Consequently, the extraterritorial impact of state-based COPPA expansion would likely result in an immediate constitutional challenge and such regulation would almost certainly be overturned.

V. Other Policy Concerns
A. The Ineffectiveness & Unintended Consequences of Age Verification Mandates
There are a host of other concerns about age verification mandates.64 Some of these concerns were summarized in a recent report produced by the Internet Safety Technical Task Force, a blue ribbon task force assembled in 2008 by state Attorneys General to study this issue: Age verification and identity authentication technologies are appealing in concept but challenged in terms of effectiveness. Any system that relies on remote verification of information has potential for inaccuracies. For example, on the user side, it is never certain that the person attempting to verify an identity is using their own actual identity or someone else’s. Any system that relies on public records has a better likelihood of accurately verifying an adult than a minor due to extant records. Any system that focuses on third-party inperson verification would require significant political backing and social acceptance. Additionally, any central repository of this type of personal information would raise significant privacy concerns and security issues.65
63

See generally Adam Thierer, The Delicate Balance: Federalism, Interstate Commerce, and Economic Freedom in the Technological Age at 58-61 (The Heritage Foundation, 1999). For a fuller exploration of these issues, see Adam Thierer, The Progress & Freedom Foundation, Social Networking and Age Verification: Many Hard Questions; No Easy Solutions, Progress on Point No. 14.5, Mar. 2007; Adam Thierer, The Progress & Freedom Foundation, Statement Regarding the Internet Safety Technical Task Force’s Final Report to the Attorneys General, Jan. 14, 2008, www.pff.org/issues-pubs/other/ 090114ISTTFthiererclosingstatement.pdf; Nancy Willard, Why Age and Identity Verification Will Not Work— And is a Really Bad Idea, Jan. 26, 2009, www.csriu.org/PDFs/digitalidnot.pdf; Jeff Schmidt, Online Child Safety: A Security Professional’s Take, The Guardian, Spring 2007, www.jschmidt.org/AgeVerification/Gardian_JSchmidt.pdf. Internet Safety Technical Task Force, Enhancing Child Safety & Online Technologies: Final Report of the Internet Safety Technical Task Force to the Multi-State Working Group on Social Networking of State Attorneys General of the United States, Dec. 31, 2008, at 10, http://cyber.law.harvard.edu/pubrelease/isttf. Full disclosure: PFF’s Adam Thierer was a member of this task force.

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Ironically, the Maine law would require the collection of more personal information about adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data). Again, this privacy concern is magnified to the extent that some sites would have to presume its users might be children—and therefore collect additional information from adults necessary to conduct age verification, such as credit card information.

B. Inconsistency with National Policy
Finally, even if a court held that state-level expansion of the COPPA framework was not preempted by federal law, and therefore unconstitutional under the Supremacy Clause of the Constitution, COPPA 2.0 laws are clearly inconsistent with the general framework for Internet governance explicitly laid down by Congress in Section 230 of the Communications Decency Act of 1996, where Congress declared that it would be the “policy of the United States”: (2) to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation; (3) to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services;66 Congress found that: (1) The rapidly developing array of Internet and other interactive computer services available to individual Americans represent an extraordinary advance in the availability of educational and informational resources to our citizens. (2) These services offer users a great degree of control over the information that they receive, as well as the potential for even greater control in the future as technology develops. (3) The Internet and other interactive computer services offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity. (4) The Internet and other interactive computer services have flourished, to the benefit of all Americans, with a minimum of government regulation.67

66 67

47 U.S.C. § 230(b)(1-3) (emphasis added). 47 U.S.C. § 230(a)(1-4) (emphasis added).

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VI. Conclusion
Given the effects of state regulation on the uniquely interstate medium that is the Internet, regulations such as the proposed Maine law will probably fail to pass constitutional muster under the Dormant Commerce Clause. Even if the law could be amended to avoid this problem (or simply implemented at the Federal level), the First Amendment problems raised by any attempt to apply the verifiable parental consent framework of COPPA to adolescents would likely prove insurmountable. The legislature should focus on educating and empowering all its citizens, especially adolescents, to make smart decisions as Internet users and consumers. If regulation has a role to play, it lies in protecting consumers from clear, demonstrable and specified harms—starting with enforcement of existing laws against unfair and deceptive trade practices at both the state and federal level.

Respectfully submitted, Berin Szoka, Senior Fellow The Progress & Freedom Foundation 1444 Eye St., NW, Suite 500 Washington, D.C. 20005 202-289-8928 bszoka@pff.org www.pff.org March 4, 2010

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