The Vermont legislature passed S.69, the Vermont Age-Appropriate Design Code Act, a landmark bill aimed at protecting minors from harmful online practices. Awaiting Governor Phil Scott’s signature, this legislation introduces strict regulations for businesses offering online services likely to be accessed by children under 18. With 68% of U.S. teens reporting exposure to manipulative online features, S.69 seeks to curb exploitative design and data practices.
Why S.69 Matters
S.69 addresses gaps in federal protections, like the outdated Children’s Online Privacy Protection Act (COPPA), by setting a higher standard for safeguarding minors’ data and online experiences. Modeled partly on California’s Age-Appropriate Design Code, it responds to growing concerns about addictive algorithms, excessive data collection, and unsafe interactions on platforms like social media. The bill’s focus on privacy-by-design and harm prevention positions Vermont as a leader in state-level privacy reform.
- Minors’ Safety: Prohibits design features that cause emotional distress or compulsive use.
- Business Accountability: Imposes clear obligations on companies, with enforcement by the Vermont Attorney General.
- Consumer Empowerment: Enhances parental and minor control over online interactions.
- Constitutional Debate: Faces scrutiny over free speech and commerce clause concerns, as noted by critics like the ACLU.
Key Provisions of S.69
S.69, detailed on the Vermont Legislature’s website, establishes comprehensive rules for “covered businesses” (entities offering online services likely accessed by minors) and emphasizes data minimization and user safety. Key provisions include:
- Default Privacy Settings: Businesses must configure services with the highest privacy protections for minors, such as disabling direct messaging with adults, hiding account visibility, and stopping push notifications.
- Data Minimization: Prohibits collecting or using minors’ personal data beyond what’s necessary for the service, banning practices like excessive tracking or profiling.
- Age Assurance: Mandates privacy-preserving age verification methods, with immediate deletion of collected data to prevent misuse.
- Prohibited Practices: Bans design features that lead to compulsive use, emotional distress, or discrimination based on protected characteristics like race or gender.
- Transparency: Requires businesses to disclose algorithmic recommendation systems and data practices clearly.
- Enforcement: The Vermont Attorney General can bring civil actions against violators, with fines up to $10,000 per violation and a 60-day cure period.
Context and Challenges
Introduced by Senator Wendy Harrison and supported by experts like Gaia Bernstein and the Electronic Privacy Information Center (EPIC), S.69 passed the Senate and House with bipartisan support but faced opposition. Critics, including the Vermont Technology Alliance and NetChoice, argue the bill’s 2% minor audience threshold is too broad, potentially burdening small businesses like restaurant reservation apps. Others, including the ACLU, raise concerns about free speech and the Dormant Commerce Clause, citing similar challenges to Maryland’s Kids Code.
Governor Scott vetoed a related bill (H.121) in 2024, citing litigation risks and small business impacts, suggesting S.69 may face a similar fate unless amended.
Implications for Businesses and Consumers
S.69 has significant ramifications for both online platforms and Vermont residents:
- For Businesses:
- Compliance Costs: Implementing age assurance and redesigning platforms to meet privacy standards could be costly, especially for smaller firms.
- Legal Risks: Non-compliance risks hefty fines and Attorney General enforcement, though no private right of action exists, unlike Vermont’s broader H.121. If a private right of action existed it would be extremely problematic for business owners.
- Innovation Opportunities: Demand for privacy-preserving tech, like anonymized age verification, may spur development.
- For Consumers:
- Safer Online Spaces: Minors gain protections from addictive features and unwanted adult interactions.
- Privacy Concerns: Age assurance methods must balance efficacy with data minimization to avoid new privacy risks.
- National Influence: S.69 could inspire other states, as Maryland’s Kids Code did, though federal preemption remains a hurdle.
Actionable Steps for Compliance
Businesses operating in Vermont or targeting its residents should prepare for S.69’s potential enactment on January 1, 2027. Recommended steps include:
- Conduct Data Audits: Map data collection practices to ensure compliance with minimization rules.
- Implement Age Assurance: Adopt privacy-first verification tools, such as zero-knowledge proofs, and delete age data immediately after use.
- Redesign User Interfaces: Disable addictive features like endless scroll and autoplay for minor users by default.
- Enhance Transparency: Publish clear policies on algorithms and data use, as required by the bill.
- Monitor Legislative Updates: Track Governor Scott’s decision and potential legal challenges via the Vermont Legislature’s bill status page.
Why Act Now
With only 19 states having “comprehensive” (there are more privacy frameworks but depends on how one classifies “comprehensive”) privacy laws and federal inaction on updating COPPA, S.69 positions Vermont as a pioneer in protecting minors online. However, its broad scope and constitutional questions make swift preparation critical. The bill’s passage reflects growing public demand for digital safety, with 74% of parents favoring stronger online protections for kids. Businesses ignoring these trends are going to see a lot of problems popping up that they will be forced to comply long term or be regulated out of business while losing clients along the way for not keeping their trust.
For more details, visit the Vermont Legislature’s S.69 page at Bill Status S.69. Stay proactive to navigate this evolving privacy landscape.
