BILL NUMBER: AB 1681 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 8, 2016
INTRODUCED BY Assembly Member Cooper
( Coauthor: Assembly Member
Gallagher )
( Coauthors: Senators Bates
and Hall )
JANUARY 20, 2016
An act to add Section 22762 to the Business and Professions Code,
relating to smartphones.
LEGISLATIVE COUNSEL'S DIGEST
AB 1681, as amended, Cooper. Smartphones.
Existing law requires that a smartphone that is manufactured on or
after July 1, 2015, and sold in California after that date, include
a technological solution at the time of sale, which may consist of
software, hardware, or both software and hardware, that, once
initiated and successfully communicated to the smartphone, can render
inoperable the essential features, as defined, of the smartphone to
an unauthorized user when the smartphone is not in the possession of
an authorized user.
This bill would require a smartphone that is manufactured on or
after January 1, 2017, and sold in California, to be capable of being
decrypted and unlocked by its manufacturer or its operating system
provider. The bill would, except as provided, subject a
seller or lessor would subject a
manufacturer or operating system provider that knowingly failed
to comply with that requirement to a civil penalty of $2,500 for
each smartphone sold or leased. The bill would prohibit a
seller or lessor manufacturer or operating system
provider who has paid this civil penalty from passing any
portion of the penalty on to purchasers of smartphones. The bill
would authorize only the Attorney General or a district attorney to
bring a civil suit to enforce these provisions. This bill would
make findings and declarations related to smartphones and criminal
activity.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) Worldwide, human trafficking is a $32 billion per year
industry.
(b) After drug trafficking and counterfeiting, human trafficking
is the world's most profitable criminal activity.
(c) Although previously believed to be an international problem,
current statistics show that human trafficking is increasingly a
domestic issue.
(d) According to estimates by the Federal Bureau of Investigation
(FBI), human trafficking or the commercial sexual exploitation of
children in the United States currently involves over 100,000
children. The San Francisco Bay area, Los Angeles, and San Diego
metropolitan areas comprise three of the nation's 13 areas of "high
intensity" child exploitation in this country, as described by the
FBI.
(e) Studies have estimated that anywhere from 50 to 80 percent of
victims of commercial sexual exploitation are, or were formerly,
involved with the child welfare system.
(f) Smartphones are increasingly becoming a weapon of choice for
criminals and criminal organizations involved in human trafficking
and sexual exploitation of children.
(g) In 2014, smartphones with full-disk encryption (FDE) became
available on the market.
(h) On smartphones with FDE, when a user creates a password, that
phrase generates a key that is used in combination with a hardware
key on a chip inside the phone, which blocks access to all "data at
rest" stored in the device.
(i) "Data at rest" on a smartphone is data that is parked, stored,
and no longer in motion, such as pictures and text messages.
(j) Only the password holder can unlock the FDE-equipped
smartphone and provide access to all "data at rest."
(k) Before 2014, when smartphones without FDE were used in crimes,
law enforcement obtained and served a court order on the phone
manufacturer and was able to have access to "data at rest" on the
device, to aid in an investigation.
(l) In order to successfully access "data at rest" on smartphones
in a criminal investigation, law enforcement must have physical
possession of the phone.
(m) Since the introduction of FDE on smartphones in 2014, "data at
rest" on FDE-equipped smartphones has become virtually impossible to
access.
(n) A smartphone belonging to one of the shooters in the County of
San Bernardino mass shooting, which left 14 people dead and many
more injured, is equipped with FDE and has prevented law enforcement
from accessing the phone's content for evidence.
(o) Since 2014, FDE in smartphones has created a public safety
crisis that has armed criminals and criminal organizations with a
powerful weapon to conduct illicit activities while simultaneously
providing a shield to conceal crimes and remain out of reach of law
enforcement.
(p) Since 2014, FDE in smartphones has rendered court orders to
access critical evidence on smartphones useless.
(q) Since 2014, FDE in smartphones has interfered with law
enforcement human trafficking investigations and prosecutions.
(r) Smartphones play an essential role in facilitating cases of
domestic minor sex trafficking. Human traffickers text logistical
information, such as time, place, pricing, types of services, and
descriptions of exploited minors using smartphones.
(s) Human traffickers rely on smartphones to communicate with each
other, organize, and advertise their illicit business.
(t) Technology-facilitated sex trafficking networks rely upon
anonymity of victims and traffickers in order to operate. Fully
encrypted smartphones, immune to search warrants, make this possible.
(u) Individuals suspected of crimes are, upon the issuance of a
court order, subject to search of their homes, vehicles, and even
their bodies, but not their smartphones that are equipped with FDE.
SECTION 1. SEC. 2. Section 22762 is
added to the Business and Professions Code, immediately following
Section 22761, to read:
22762. (a) For the purposes of this section, the following terms
have the following meanings:
(1) "Smartphone" has the same meaning as in Section 22761.
(2) "Sold in California" has the same meaning as in Section 22761.
(3) "Leased in California," or any variation thereof, means that
the smartphone is contracted for a specified period of time to an
end-use consumer at an address within the state.
(b) A smartphone that is manufactured on or after January 1, 2017,
and sold or leased in California, shall be capable of being
decrypted and unlocked by its manufacturer or its operating system
provider.
(c) Except as provided in subdivision (d), a seller or
lessor that sells or leases in California a A
smartphone manufactured on or after January 1, 2017, that is not
capable of being decrypted and unlocked by its manufacturer or its
operating system provider shall be subject the
manufacturer or operating system provider to a civil penalty
of two thousand five hundred dollars ($2,500) for each smartphone
sold or leased in California if the seller or
lessor manufacturer or operating system provider
of the smartphone knew at the time of the sale or lease that the
smartphone was not capable of being decrypted and unlocked by
its the manufacturer or its operating
system provider. A seller or lessor
manufacturer or operating system provider who pays a civil
penalty imposed pursuant to this subdivision shall not pass on any
portion of that penalty to purchasers of smartphones by
raising the sales or lease price of smartphones.
(d) (1) The sale or lease of
a smartphone manufactured on or after January 1, 2017, that is not
capable of being decrypted and unlocked by its manufacturer or its
operating system provider shall not result in liability to the seller
or lessor if the inability of the manufacturer and
operating system provider to decrypt and unlock the smartphone is the
result of actions taken by a person or entity other than the
manufacturer, the operating system provider, the seller, or the
lessor and those actions were unauthorized by the manufacturer, the
operating system provider, the seller, or thelessor.
lessor.
(2) Paragraph (1) does not apply if at the time of sale or lease,
the seller or lessor had been notified that the manufacturer and
operating system provider were unable to decrypt and unlock the
smartphone due to those unauthorized actions.
(e) A civil suit to enforce this section may only be brought by
the Attorney General, for the sale or lease of a smartphone in
California, or a district attorney for the sale or lease of a
smartphone in the county represented by the district attorney. A
seller or lessor manufacturer or operating
system provider shall not be subject to more than a single
penalty for each sale or lease of a smartphone.
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