[Congressional Record Volume 150, Number 26 (Wednesday, March 3, 2004)]
[Senate]
[Pages S2106-S2109]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Mr. Stevens, and Ms. Murkowski):
  S. 2160. A bill to regulate interstate commerce by prohibiting the 
sale of children's personally identifiable information for commercial 
marketing purposes; to the Committee on Commerce, Science, and 
Transportation.
   Mr. WYDEN. Mr. President and colleagues, there is now clear evidence 
that it is open season for large-scale commercial marketing to the 
Nation's smallest children. As a result, today I am introducing with 
the distinguished chairman of the Senate Appropriations Committee, 
Senator Stevens, legislation to protect the privacy of America's 
children.
   I suspect parents of very young children would not want their 
children's names and addresses, their e-mail addresses, their ages and 
other data

[[Page S2107]]

treated as a simple marketplace commodity to be freely bought and sold 
for a profit with no questions asked. Yet that is exactly what happens 
every day.
   Parents may not be aware of it, but large list brokers routinely 
advertise and sell information on very young children for marketing 
purposes. Their lists cover millions of children and often include such 
data as ethnicity, family income, and hobbies or interests. In short, 
commercial trafficking in personal information about very young 
children is surprisingly commonplace.
   How extreme has it gotten? Take a look at this example. The broker 
of this list says on their Web site that they have more than 15 million 
names of children from the ages of 2 to 13. They said they update it 
monthly. That is why it is clear it is open season for large-scale 
marketing to the country's smallest children, which has concerned 
Senator Stevens and I. The list brokers break it down for the 
marketers, as well, to help them target the very young.
   On this next graphic, a list broker offers marketing lists that only 
contain the names of preschool children ages 2 to 5. If that is too 
young for a particular marketer's needs, the marketer could pursue 
lists of elementary school children ages 5 through 11 or junior high 
school kids age 11 to 13. These lists of young children are advertised 
openly on the Internet for anyone who is interested.
   We can see the details promised: Full name, address, and age. My 
view is that is not information about youngsters that parents want 
available for sale without the consent of the parents. But it is 
happening now all the time because there is big money in marketing to 
the very young. Children, of course, influence the purchases of their 
parents. Sometimes they have money to spend of their own. As a result, 
an estimated $12 billion per year is spent on marketing to these very 
young children.
   Unfortunately, with all the money involved, the ethics of direct 
marketing to children and appropriate limits get short shrift. The very 
young are not likely to understand the intent and tactics of marketing 
pitches the way adults do and may be more vulnerable to influence, 
manipulation, and questionable and deceptive tactics. The wholesale 
trafficking of specific information about individual youngsters and the 
use of that information to target and contact those children for 
marketing purposes is something that most parents find very troubling.
   The suggested use for these lists runs the gamut. Here is another 
list broker that has 20 million names of children in preschool through 
eighth grade. They have all kinds of suggestions. We can see a few of 
the examples on the chart that make it clear exactly how great this 
potential market is.
   That is why I am introducing today, with the bipartisan support of 
our colleague, the distinguished chairman of the Senate Appropriations 
Committee, Senator Stevens, a privacy act to protect our youngsters.
   The bill's premise is simple: Trafficking in data on very young 
children for the purpose of commercial marketing should not be 
permitted in our country. Specifically, the bill bans the selling or 
purchasing of personal information about people that the seller and 
purchaser know to be very young. There would be an exception for cases 
where the parent is given express consent, provided that the parent had 
notice of what he or she was consenting to and was not required to 
grant consent as a condition of obtaining a desired product or service.
  There would also be an exception for the sale of information for 
nonmarketing purposes as long as the purchaser certifies it will 
neither use the information for marketing nor allow others to do so. 
This exception would allow, for example, health care officials to still 
use available data to track the spread of a disease or for students, of 
course, to get information about various academic activities. The list 
buyers would have to certify that lists are not being purchased or 
resold for marketing; otherwise they will be in violation of the law.
  The bill's enforcement provisions track those of the Children's 
Online Privacy Protection Act. Primary enforcement authority would rest 
with the Federal Trade Commission, and State attorneys general would be 
authorized to bring enforcement actions as well.
  I think we all understand marketers have products they want to get 
out, and lists are a big part of their trade. But it is one proposition 
when the person on the list is an adult; it is quite another to be 
buying and selling and trafficking in all of this data and all of these 
lists on the very young.
  I say to the Senate, if you just spend a little time on the Internet, 
you will see what I have concluded; that it is open season for the 
large-scale marketing that is targeted at very small children, and we 
ought to make an effort to draw some lines.
  Yes, marketing is accepted and important with respect to adults. But 
I hope my colleagues will join me and Senator Stevens today in 
supporting a commonsense effort to limit the way in which data is used 
and commercialized about America's smallest children.
  Mr. President, I ask unanimous consent that the text of the 
legislation I am introducing today with Senator Stevens be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2160

       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 ``Children's Listbroker 
     Privacy Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Commercial list brokers routinely advertise and sell 
     detailed information on children, including names, addresses, 
     ages, and other data, for use in marketing. This data is 
     commonly available on children as young as two years old, 
     enabling marketers to target specific demographics such as 
     junior high school, elementary school, or even preschool.
       (2) Commercially available marketing databases can be very 
     large, covering millions of children.
       (3) Commercially available marketing databases can include 
     a variety of information on the children they cover, from 
     ethnicity to family income to hobbies and interests.
       (4) Money spent on marketing to children has been estimated 
     at $12 billion per year.
       (5) Several Federal statutes, including section 1061 of the 
     No Child Left Behind Act, the Children's Online Privacy 
     Protection Act, and the Family and Educational Rights and 
     Privacy Act, restrict the collection and disclosure of 
     information about children or students under specified 
     circumstances. When data on children is collected in a manner 
     that is outside the scope of those statutes, however, Federal 
     law does not significantly restrict the commercial sale or 
     resale of such data.
       (6) The ability to sell information about children to 
     marketers for a profit creates an economic incentive to find 
     new and creative ways to collect and compile such 
     information, and possibly to circumvent or subvert the intent 
     of those Federal statutes that do govern the collection of 
     information about children or students. There are a variety 
     of means and sources that marketers and list brokers can and 
     do use to compile names, addresses, and other data about 
     children.

     SEC. 3. RESTRICTION ON SALE OR PURCHASE OF CHILDREN'S 
                   PERSONAL INFORMATION.

       (a) In General.--It is unlawful--
       (1) to sell personal information about an individual the 
     seller knows to be a child;
       (2) to purchase personal information about an individual 
     identified by the seller as a child, for the purpose of 
     marketing to that child; or
       (3) for a person who has provided a certification pursuant 
     to subsection (b)(2), in connection with the purchase of 
     personal information about an individual identified by the 
     seller as a child, to engage in any practice that violates 
     the terms of the certification.
       (b) Exceptions.--
       (1) Parental consent.--Subsection (a) does not apply to any 
     sale, purchase, or use of personal information about a child 
     if the parent of the child has granted express consent to 
     that sale, purchase, or use of the information.
       (2) Certification.--Subsection (a)(1) shall not apply to 
     the sale of personal information about a child if the 
     purchaser certifies to the seller, electronically or in 
     writing, before the sale is completed--
       (A) the purpose for which the information will be used by 
     the purchaser; and
       (B) that the purchaser will neither--
       (i) use the information for marketing that child; nor
       (ii) permit the information to be used by others for the 
     purpose of marketing to that child.

     SEC. 4. ADMINISTRATION AND ENFORCEMENT.

       (a) In General.--Except as provided in subsection (b), this 
     Act shall be enforced by the Commission as if the violation 
     of section 3 of this Act were an unfair or deceptive act or 
     practice proscribed under section 18(a)(1)(B) of the 
     Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

[[Page S2108]]

       (b) Enforcement by Certain Other Agencies.--Compliance with 
     this Act shall be enforced under--
       (1) section 8 of the Federal Deposit Insurance Act (12 
     U.S.C. 1818), in the case of--
       (A) national banks, and Federal branches and Federal 
     agencies of foreign banks, by the Office of the Comptroller 
     of the Currency;
       (B) member banks of the Federal Reserve System (other than 
     national banks), branches and agencies of foreign banks 
     (other than Federal branches, Federal agencies, and insured 
     State branches of foreign banks), commercial lending 
     companies owned or controlled by foreign banks, and 
     organizations operating under section 25 or 25A of the 
     Federal Reserve Act (12 U.S.C. 601 and 611), by the Board; 
     and
       (C) banks insured by the Federal Deposit Insurance 
     Corporation (other than members of the Federal Reserve 
     System) and insured State branches of foreign banks, by the 
     Board of Directors of the Federal Deposit Insurance 
     Corporation;
       (2) section 8 of the Federal Deposit Insurance Act (12 
     U.S.C. 1818), by the Director of the Office of Thrift 
     Supervision, in the case of a savings association the 
     deposits of which are insured by the Federal Deposit 
     Insurance Corporation;
       (3) the Federal Credit Union Act (12 U.S.C. 1751 et seq.) 
     by the National Credit Union Administration Board with 
     respect to any Federal credit union;
       (4) part A of subtitle VII of title 49, United States Code, 
     by the Secretary of Transportation with respect to any air 
     carrier or foreign air carrier subject to that part;
       (5) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et 
     seq.) (except as provided in section 406 of that Act (7 
     U.S.C. 226, 227)), by the Secretary of Agriculture with 
     respect to any activities subject to that Act; and
       (6) the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) by 
     the Farm Credit Administration with respect to any Federal 
     land bank, Federal land bank association, Federal 
     intermediate credit bank, or production credit association.
       (c) Exercise of Certain Powers.--For the purpose of the 
     exercise by any agency referred to in subsection (b) of its 
     powers under any Act referred to in that subsection, a 
     violation of section 3 of this Act I is deemed to be a 
     violation of a requirement imposed under that Act. In 
     addition to its powers under any provision of law 
     specifically referred to in subsection (b), each of the 
     agencies referred to in that subsection may exercise, for the 
     purpose of enforcing compliance with any requirement imposed 
     under section 3 of this Act, any other authority conferred on 
     it by law.
       (d) Actions by the Commission.--The Commission shall 
     prevent any person from violating section 3 of 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. Any entity that violates any provision of that 
     section is 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 that 
     section.
       (f) Preservation of Commission Authority.--Nothing 
     contained in this section shall be construed to limit the 
     authority of the Commission under any other provision of law.

     SEC. 5. ACTIONS BY STATES.

       (a) In General.--
       (1) Civil Actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that section 3 of this Act, the State, as parens 
     patriae, may bring a civil action on behalf of the residents 
     of the State in a district court of the United States of 
     appropriate jurisdiction--
       (A) to enjoin that practice;
       (B) to enforce compliance with the rule;
       (C) to obtain damage, restitution, or other compensation on 
     behalf of residents of the State; or
       (D) to obtain such other relief as the court may consider 
     to be appropriate.
       (2) Notice.--
       (A) In general.--Before filing an action under paragraph 
     (1), the attorney general of the State involved shall provide 
     to the Commission--
       (i) written notice of that action; and
       (ii) a copy of the complaint for that action.
       (B) Exception.--
       (i) In general.--Subparagraph (A) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this subsection, if the attorney general 
     determines that it is not feasible to provide the notice 
     described in that subparagraph before the filing of the 
     action.
       (ii) Notification.--In an action described in clause (i), 
     the attorney general of a State shall provide notice and a 
     copy of the complaint to the Commission at the same time as 
     the attorney general files the action.
       (b) Intervention.--
       (1) In general.--On receiving notice under subsection 
     (a)(2), the Commission shall have the right to intervene in 
     the action that is the subject of the notice.
       (2) Effect of intervention.--If the Commission intervenes 
     in an action under subsection (a), it shall have the right--
       (A) to be heard with respect to any matter that arises in 
     that action; and
       (B) to file a petition for appeal.
       (c) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this subtitle shall 
     be construed to prevent an attorney general of a State from 
     exercising the powers conferred on the attorney general by 
     the laws of that State to--
       (1) conduct investigations;
       (2) administer oaths or affirmations; or
       (3) compel the attendance of witnesses or the production of 
     documentary and other evidence.
       (d) Actions by the Commission.--In any case in which an 
     action is instituted by or on behalf of the Commission for 
     violation of section 2 of this Act, no State may, during the 
     pendency of that action, institute an action under subsection 
     (a) against any defendant named in the complaint in that 
     action for violation of that section.
       (e) Venue; Service of Process.--
       (1) Venue.--Any action brought under subsection (a) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 
     1391 of title 28, United States Code.
       (2) Service of process.--In an action brought under 
     subsection (a), process may be served in any district in 
     which the defendant--
       (A) is an inhabitant; or
       (B) may be found.

     SEC. 6. DEFINITIONS.

       In this Act:
       (1) Child.--The term ``child'' means an individual under 
     the age of 16.
       (2) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (3) Express consent.--
       (A) In general.--The term ``express consent'' means an 
     affirmative indication of permission in writing or electronic 
     form. The term ``express consent'' does not include consent 
     inferred from a failure to indicate affirmatively that 
     consent is denied or withheld.
       (B) Prerequisites.--Express consent is not valid unless--
       (i) before granting the consent the individual granting the 
     consent was informed of the purpose for which the information 
     would be sold, purchased, or used; and
       (ii) consent was not granted as a condition for making a 
     product, service, or warranty available to the individual or 
     the child to which the information pertains.
       (4) Marketing.--The term ``marketing'' means making a 
     communication to encourage the purchase or use of a 
     commercial product or service. For purposes of this 
     paragraph, a product or service shall be considered to be 
     commercial if some or all of the proceeds from the sale inure 
     to the benefit of an enterprise conducted for profit.
       (5) Parent.--The term ``parent'' includes a legal guardian.
       (6) Personal information.--The term ``personal 
     information'' means identifiable information about an 
     individual, including--
       (A) a name;
       (B) a home or other physical address including street name 
     and name of a city or town;
       (C) an e-mail address or online username;
       (D) a telephone number;
       (E) a Social Security number; or
       (F) any other information that permits a specific 
     individual to be identified.
       (7) Purchase; sell; sale.--In section 3, the terms 
     ``purchase'', ``sell'', and ``sale'' include the purchase and 
     sale of the right to use personal information, without regard 
     to whether--
       (A) the right is limited or unlimited;
       (B) the transaction is characterized as a purchase, sale, 
     lease, or otherwise; and
       (C) the consideration for the transaction is monetary, 
     goods, or services.

     SEC. 7. EFFECTIVE DATE.

       This Act takes effect 6 months after the date of enactment.

  Mr. STEVENS. Mr. President, I am proud to introduce, with my 
colleague from Oregon, a bill which protects children from being 
strategically targeted by commercial advertising.
  I was shocked to learn that presently there is no law that restricts 
companies from purchasing databases which contain information about 
children.
  In fact, websites have been brought to my attention that actually 
sell lists of children as young as pre-school.
  The thought of companies acquiring lists of information about kids 
that are barely past the toddler stage is appalling.
  These companies actually market that the lists can be selected and 
purchased by sorting according to different age groups. They suggest 
possible commercial uses for the lists such as for magazines, amusement 
parks, child care services, etc.
  One of the websites even points out that many high school students 
have their own credit cards or have use of their parents' credit cards. 
The website then suggests that companies could buy these lists so they 
could market to children various products such as clothing, computers, 
etc.
  The bill that we are introducing today will deter entities from 
selling

[[Page S2109]]

these lists of personal information about children to be used for 
commercial purposes.
  The bill will prohibit anyone from selling or buying personal 
information about a person who is known to be under 16 years of age 
unless: 1. The parent has given express consent; or 2. The buyer 
certifies that the information is being obtained for strictly non-
marketing purposes. If that is the case, they can't subsequently sell 
the information to a commercial marketing group.
  The enforcement will be by the Federal Trade Commission and the 50 
attorney generals.
  I look forward to working with my colleague from Oregon and others on 
this bill.
                                 ______