October 4, 2022

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On September 15th, Governor Gavin Newsom signed into law a bill aimed at protecting children's privacy online and regulating companies that collect and process minors' personal information.
The California Age-Appropriate Design Code Act (the Act) penalizes companies to the tune of $2,500 per affected child for each negligent violation and $7,500 per affected child for each intentional violation.
The Act goes into effect on July 1, 2024, giving businesses ample time to revamp their products and services as necessary to comply with the Act's obligations. There is also a 90-day period to cure any violations for which a business receives notice from the Attorney General.
After the state Assembly passed a version of the Act, the Senate's updates focused on enforcement by California's Attorney General and implementation by its first-in-the-nation privacy protection agency – the California Privacy Protection Agency, created by the California Privacy Rights Act. The state Assembly approved a Senate-passed version of the Act on August 30, 2022, sending the bill to Gov. Gavin Newsom.
At its core, the Act emphasizes that companies must prioritize children's privacy, safety and well-being over commercial interests. It also addresses concerns of children's advocacy groups regarding the impact of technology on children's development and mental health. The Act applies to businesses “that provide an online service, product, or feature likely to be accessed by children,” with the term “likely to be accessed by children” broadly defined, taking into account factors such as audience composition, advertising and design elements. As a result, social media platforms, gaming companies and other online services that target children or teens should be aware of upcoming compliance obligations.
The Act requires covered businesses to take the following actions:
The Act prohibits covered businesses from taking any of the following actions:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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