BILL ANALYSIS                                                                                                                                                                                                    Ó



                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 2799 (Chau)
          Version: April 7, 2016
          Hearing Date:  June 14, 2016
          Fiscal: No
          Urgency: No
          ME   


                                        SUBJECT
                                           
           Privacy:  personal information:  preschool and prekindergarten  
                                      purposes

                                      DESCRIPTION  


          This bill creates the Early Learning Privacy Information  
          Protection Act (ELPIPA) to extend all of the protections offered  
          by the Student Online Personal Information Protection Act  
          (SOPIPA) to pupils enrolled in preschools and pre-kindergarten.   
           ELPIPA imposes requirements directly on Websites, online  
          services, and mobile applications that are designed, marketed  
          and used primarily by children enrolled in a preschool or  
          prekindergarten course of instruction.  ELPIPA would protect  
          early learners' privacy by:
                 prohibiting the sale of early learners' personal  
               information by operators of early learning online sites; 
                 prohibiting targeted advertising on early learning  
               online sites; 
                 prohibiting operators of early learning online sites  
               from using information they obtain on the early learning  
               site to target advertising on other sites; 
                 prohibiting operators from amassing a profile about an  
               early learning student except in furtherance of early  
               learning school purposes; 
                 prohibiting disclosure of early learner personal  
               information unless the disclosure is made in furtherance of  
               the early learning purpose; and 
                 requiring early learning online operators to keep the  
               early learner personal information safe and secure.

                                      BACKGROUND  

          The Federal Educational Rights and Privacy Act (FERPA) generally  








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          seeks to protect the confidentiality of educational records (and  
          personally identifiable information contained therein) by  
          prohibiting the funding of schools that permit the release of  
          those records in violation of the Act.  (20 U.S.C. Sec.  
          1232g(b)(1).)  FERPA's prohibition only applies to the school  
          itself and contains various exemptions where the data may be  
          released without the written consent of the parents.  

          Since the enactment of FERPA in 1974, educational institutions  
          have undergone dramatic changes in the way that students are  
          taught, including the increased use of technology.  With respect  
          to the use of technology and learning, the Department of  
          Education observes that:

             Schools can use digital resources in a variety of ways to  
             support teaching and learning.  Electronic grade books,  
             digital portfolios, learning games, and real-time feedback  
             on teacher and student performance, are a few ways that  
             technology can be utilized to power learning.  (U.S.  
             Department of Education, Use of Technology in Teaching and  
             Learning  
              [as of June 8, 2016].)

          In response to the increased use of technology in the classroom,  
          the Legislature unanimously passed the Student Online Personal  
          Information Protection Act (SOPIPA) in 2014.  (SB 1177  
          (Steinberg, Ch. 839, Stats. 2014).)  SOPIPA was enacted to  
          protect student personal information by closing loopholes that  
          allowed online companies in the education technology space to  
          profit from student personal information obtained through  
          student, parent, teacher, and administrator use of K-12 online  
          sites.  Although preschools and pre-kindergartens increasingly  
          integrate tablets in the classroom and use cloud-computing  
          services to enrich student education and improve academic  
          operations, early learners are outside of the scope and not  
          protected by SOPIPA.  

          This bill creates the Early Learning Privacy Information  
          Protection Act (ELPIPA) to extend all of the protections offered  
          by SOPIPA to pupils enrolled in preschools and pre-kindergarten.  
            ELPIPA imposes requirements directly on Websites, online  
          services, and mobile applications that are designed, marketed  
          and used primarily by children enrolled in a preschool or  









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          prekindergarten course of instruction.  ELPIPA would protect  
          early learners' privacy in this digital age by:
                 prohibiting the sale of early learners' personal  
               information by operators of early learning online sites; 
                 prohibiting targeted advertising on early learning  
               sites; 
                 prohibiting operators of early learning online sites  
               from using information they obtain on the early learning  
               site to target advertising on other sites; 
                 prohibiting operators from amassing a profile about an  
               early learning student except in furtherance of early  
               learning school purposes; 
                 prohibiting disclosure of early learner personal  
               information unless the disclosure is made in furtherance of  
               the early learning purpose; and 
                 requiring these early learning online operators to keep  
               the early learner personal information safe and secure.

                                CHANGES TO EXISTING LAW

          Existing law  provides that, among other rights, all people have  
          an inalienable right to pursue and obtain privacy.  (Cal.  
          Const., art. I, Sec. 1.)
            
           Existing law  requires an operator of a commercial Web site or  
          online service that collects personally identifiable information  
          through the Internet about individual consumers residing in  
          California who use or visit its Web site to conspicuously post  
          its privacy policy.  (Online Privacy Protection Act of 2003,  
          Bus. & Prof. Code Sec. 22575.)
           
          Existing law  , the Student Online Personal Information Protection  
          Act (SOPIPA) provides privacy protections to K-12 students.  
          (Bus. & Prof. Code Sec. 22584.)

           Existing law  , defines "operator" as the operator of an Internet  
          Web site, online service, online application, or mobile  
          application with actual knowledge that the site, service, or  
          application is used primarily for K-12 school purposes and was  
          designed and marketed for K-12 school purposes.  (Bus. & Prof.  
          Code Sec. 22584(a).)
           
           Existing law  defines "Covered information" as personally  
          identifiable information or materials, in any media or format  









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          that meets any of the following:
                 is created or provided by a student, or the student's  
               parent or legal guardian, to an operator in the course  
               of the student's, parent's, or legal guardian's use of  
               the operator's site, service, or application for K-12  
               school purposes; 
                 is created or provided by an employee or agent of the  
               K-12 school, school district, local education agency, or  
               county office of education, to an operator; or 
                 is gathered by an operator through the operation of  
               their site, service, or application and is descriptive  
               of a student or otherwise identifies a student,  
               including, but not limited to, information in the  
               student's educational record or email, first and last  
               name, home address, telephone number, email address, or  
               other information that allows physical or online  
               contact, discipline records, test results, special  
               education data, juvenile dependency records, grades,  
               evaluations, criminal records, medical records, health  
               records, social security number, biometric information,  
               disabilities, socioeconomic information, food purchases,  
               political affiliations, religious information, text  
               messages, documents, student identifiers, search  
               activity, photos, voice recordings, or geolocation  
               information.  (Bus. & Prof. Code Sec. 22584(i) (1)-(3).)

           Existing law  specifies that:
                 "Online service" includes cloud computing services, and  
               are within the scope of SOPIPA  if they otherwise meet the  
               definition of operator.  (Bus. & Prof. Code Sec. 22584(h).)
                 "K-12 school purposes" means purposes that customarily  
               take place at the direction of the K-12 school, teacher, or  
               school district or aid in the administration of school  
               activities, including, but not limited to, instruction in  
               the classroom or at home, administrative activities, and  
               collaboration between students, school personnel, or  
               parents, or are for the use and benefit of the school.   
               (Bus. & Prof. Code Sec. 22584(j).)
           Existing law  provides that an operator shall not knowingly  
          engage in any of the following activities with respect to their  
          site, service, or application:
                 engage in targeted advertising on the operator's site,  
               service, or application, or target advertising on any other  
               site, service, or application when the targeting of the  









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               advertising is based upon any information, including  
               covered information and persistent unique identifiers, that  
               the operator has acquired because of the use of that  
               operator's site, service, or application where the operator  
               had actual knowledge that it is used primarily for K-12  
               school purposes and was designed and marketed for K-12  
               school purposes;
                 use information, including persistent unique  
               identifiers, created or gathered by the operator's site,  
               service, or application, to amass a profile about a K-12  
               student except in furtherance of K-12 school purposes; or
                 sell a student's information, including covered  
               information.  (Bus. & Prof. Code Sec. 22584(b) (1)-(3).)

           Existing law  provides that an operator shall not, with respect  
          to their site, service, or application, knowingly disclose  
          covered information unless the disclosure is made:
                 in furtherance of the K-12 purpose of the site, service,  
               or application, provided the recipient of the covered  
               information disclosed shall not further disclose the  
               information unless done to allow or improve operability and  
               functionality within that student's classroom or school and  
               is legally required to comply with encryption, deletion,  
               and security protocols; 
                 to ensure legal and regulatory compliance;
                 to respond to or participate in judicial process;
                 to protect the safety of users or others or security of  
               the site; or
                 to a service provider, provided the operator  
               contractually prohibits the service provider from using any  
               covered information for any purpose other than providing  
               the contracted service to, or on behalf of, the operator,  
               and prohibits the service provider from disclosing any  
               covered information provided by the operator with  
               subsequent third parties, and requires the service provider  
               to implement and maintain reasonable security procedures  
               and practices as specified.  (Bus. & Prof. Code Sec.  
               22584(b)(4)).

           Existing law  provides that SOPIPA's prohibitions shall not be  
          construed to prohibit the operator's use of information for  
          maintaining, developing, supporting, improving, or diagnosing  
          the operator's site, service, or application. (Bus. & Prof. Code  
          Sec. 22584(c).)









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           Existing law  requires an operator to:
                 implement and maintain reasonable security procedures  
               and practices appropriate to the nature of the covered  
               information, and protect that information from unauthorized  
               access, destruction, use, modification, or disclosure; and


                 delete a student's covered information if the school or  
               district requests deletion of data under the control of the  
               school or district.  (Bus. & Prof. Code Sec. 22584(d)  
               (1)-(2).)

           Existing law  allows for disclosure of covered information of a  
          student, as specified, and under the following circumstances:  
                 if other provisions of federal or state law require the  
               operator to disclose the information, and the operator  
               complies with the requirements of federal and state law in  
               protecting and disclosing that information;
                 for legitimate research purposes as required by state or  
               federal law and subject to the restrictions under  
               applicable state and federal law or as allowed by state or  
               federal law and under the direction of a school, school  
               district, or state department of education, if no covered  
               information is used for any purpose in furtherance of  
               advertising or to amass a profile on the student for  
               purposes other than K-12 school purposes; or
                 to a state or local educational agency, including  
               schools and school districts, for K-12 school purposes, as  
               permitted by state or federal law.  (Bus. & Prof. Code Sec.  
               22584(e)).

           Existing law  specifies that SOPIPA 
                 does not prohibit an operator from using deidentified  
               student covered information within the operator's site,  
               service, or application or other sites, services, or  
               applications owned by the operator to improve educational  
               products or to demonstrate the effectiveness of the  
               operator's products or services, including in their  
               marketing; and 
                 does not prohibit an operator from sharing aggregated  
               deidentified student covered information for the  
               development and improvement of educational sites, services,  
               or applications.  (Bus. & Prof. Code Sec. 22584(f) & (g).)









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          Existing law  specifies that SOPIPA:
                 shall not be construed to limit the authority of a law  
               enforcement agency to obtain any content or information  
               from an operator as authorized by law or pursuant to an  
               order of a court of competent jurisdiction;
                 does not limit the ability of an operator to use student  
               data, including covered information, for adaptive learning  
               or customized student learning purposes;
                 does not apply to general audience Internet Web sites,  
               general audience online services, general audience online  
               applications, or general audience mobile applications, even  
               if login credentials created for an operator's site,  
               service, or application may be used to access those general  
               audience sites, services, or applications;
                 does not limit Internet service providers from providing  
               Internet connectivity to schools or students and their  
               families;
                 does not prohibit an operator of an Internet Web site,  
               online service, online application, or mobile application  
               from marketing educational products directly to parents so  
               long as the marketing did not result from the use of  
               covered information obtained by the operator through the  
               provision of services covered under this section;
                 does not impose a duty upon a provider of an electronic  
               store, gateway, marketplace, or other means of purchasing  
               or downloading software or applications to review or  
               enforce compliance of this section on those applications or  
               software;
                 does not impose a duty upon a provider of an interactive  
               computer service, as defined in Section 230 of Title 47 of  
               the United States Code, to review or enforce compliance  
               with this section by third-party content providers; and 
                 does not impede the ability of students to download,  
               export, or otherwise save or maintain their own student  
               created data or documents.  (Bus. & Prof. Code Sec. 22584  
               (k)-(r).)
          
           This bill  creates the Early Learning Privacy Information  
          Protection Act (ELPIPA) providing pre-kindergarten and  
          pre-school students with the exact protections afforded to K-12  
          students by the Student Online Personal Information Protection  
          Act (SOPIPA) (detailed above).  










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                                        COMMENT
           
        1.  Stated Need for the bill  :


          According to the author:



             Technology is an integral part of learning for today's kids,  
             even the youngest among them. Preschools and  
             pre-kindergartens increasingly integrate tablets in the  
             classroom and use cloud-computing services to enrich student  
             education and improve academic operations.  In a recent  
             survey, 65% of preschool educators report using digital  
             devices and materials in their classrooms.

              

             While young children can benefit from guided early online  
             learning, more needs to be done to ensure the safety of their  
             private information. Online services, websites, apps, and  
             digital platforms collect a wealth of personal data that is  
             vulnerable to exploitation.  The recent Vtech data breach,  
             which exposed the personal information of nearly 6.4 million  
             children, is just one example that shows the necessity of  
             protecting kids' private information as they engage with  
             education technology.

              

             California became the national leader on student privacy  
             protections with the unanimous passage of SB 1177  
             (Steinberg), known as the Student Online Personal Information  
             Protection Act (SOPIPA), in 2014.  This law, which went into  
             effect on January 1, 2016, ensures the privacy and security  
             of personal and academic data in 21st century K-12  
             classrooms.

              

             SOPIPA was passed in response to the massive amounts of  
             sensitive student data that online services could collect -  
             including academic performance, health records, and more -  









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             without clearly limiting the use of that data for educational  
             purposes. 

              

             Preschools and pre-kindergartens should be safe-havens for  
             learning and benefit from the same privacy protections for  
             children as California's K-12 schools.



          2.     ELPIPA extends protections in SOPIPA to pre-school  
          students 



          California became the national leader on student privacy when it  
          unanimously passed the Student Online Personal Information  
          Protection Act (SOPIPA).   (SB 1177 (Steinberg, Ch. 839, Stats.  
          2014).)  SOPIPA was California's response to reports regarding  
          uses of student information and the inadequacies of state and  
          federal law in protecting student personal information.<1>  


          While the Family Educational Rights and Privacy Act (FERPA) (20  
          U.S.C. Sec. 1232g(b)(1)) generally protects personally  
          identifiable information from unauthorized disclosure, that  
          provision applies only to schools, not to third parties who  
          operate early education through 12th grade Web sites, services,  
          or applications.  Furthermore, an article by Paul Schwartz and  
          ---------------------------
          <1> Fordham Law School Center for Law and Information Policy  
          Report, Privacy and Cloud Computing in Public Schools (Dec. 13,  
          2013); Stephanie Simon, Politico, Data Mining Your Children (May  
          15, 2014); Paul Schwartz, The Battle for Leadership in Education  
          Privacy Law:  Will California Seize the Throne? (March 27,  
          2014); Benjamin Herold, Education Week, Google Under Fire for  
          Data-Mining Student Email Messages (March 26, 2014); Los Angeles  
          Times Editorial Board, U.S. Needs To Add Student Online Privacy  
          Rules: A Bill By State Sen. Darrell Steinberg Would Ban Private  
          Firms Contracting With Public Schools From Selling California  
          Student's Records (March 5, 2014); The Sacramento Bee Editorial  
          Board, State Should Not Wait For Congress to Protect Kids'  
          Privacy (March 3, 2014); Natasha Singer, The New York Times,  
          Scrutiny in California For Software In Schools (Feb. 20, 2014).








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          Daniel Solove, entitled, The Battle for Leadership in Education  
          Privacy Law: Will California Seize the Throne? observed:

            There are notable gaps in FERPA that make it largely  
            ineffective in protecting student privacy in today's digital  
            age.  For example, FERPA lacks meaningful enforcement.   
            Students and their parents have no right to sue for FERPA  
            violations.  Only the Department of Education can enforce  
            the law.  FERPA only allows one sanction -- the removal of  
            all federal funding for an educational institution.  This  
            sanction is so impractical and severe that the Department  
            has never used it in FERPA's four-decade history.  Thus,  
            enforcement of the statute is essentially nonexistent.

            Moreover, FERPA enforcement only applies to schools.  Unlike  
            HIPAA, which gives the Department of Health and Human  
            Services (HHS) the authority to enforce against nearly all  
            entities that receive HIPAA-regulated information, the  
            Department of Education lacks similar authority.  The  
            Department of Education is unable to enforce against  
            businesses that are not schools, but that receive  
            FERPA-regulated data.

            FERPA also says little about selecting a cloud provider or  
            about the responsibilities of such an entity. . . .  FERPA  
            [also] does not have much more to say about the  
            responsibilities of a cloud computing provider.  In fact, it  
            contains a potentially broad loophole.  If a school  
            discloses education records for outsourcing its functions,  
            the FERPA Regulations allow the school to designate the  
            cloud computing provider as a "school official" in order to  
            facilitate the sharing.   When a school shares student data  
            with a cloud service provider, the duties of the provider to  
            protect the data are governed by the contract into which the  
            school and the provider enter.  (Paul Schwartz, Daniel  
            Solove, SafeGov, The Battle for Leadership in Education  
            Privacy Law: Will California Seize the Throne? (Mar. 27,  
            2014)  
              
            [as of June 4, 2016].) 


          Moreover, FERPA "did not anticipate the explosion in online  









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          learning.  Students shed streams of data about their academic  
          progress, work habits, learning styles and personal interests as  
          they navigate educational Websites.  All that data has potential  
          commercial value:  It could be used to target ads to the kids  
          and their families, or to build profiles on them ..." (Stephanie  
          Simon, Politico, Data Mining Your Children, (May 15, 2014.)  

           

          Prior to SOPIPA, online companies in the K-12 education  
          technology space could collect and sell student personal  
          information obtained through student, parent, and teacher use of  
          the online sites used for K-12 school purposes.  Because SOPIPA  
          only covers the K-12 online space, online companies in the early  
          learning education technology space can collect and sell student  
          personal information obtained through student, parent, and  
          teacher use of online sites used for early learning purposes.   
          The misuse of student personal information that could legally  
          take place in the K-12 space before SOPIPA took effect on  
          January 1, 2016 can currently take place in the early education  
          space.  Accordingly, this bill creates the Early Learning  
          Privacy Information Protection Act (ELPIPA) to extend all of the  
          protections offered by SOPIPA to pupils enrolled in preschools  
          and pre-kindergarten.   ELPIPA imposes requirements directly on  
          Websites, online services, and mobile applications that are  
          designed, marketed and used primarily by children enrolled in a  
          preschool or prekindergarten course of instruction.  ELPIPA  
          would protect early learners' privacy in this digital age by:
                 prohibiting the sale of early learners' personal  
               information by operators of early learning online sites; 
                 prohibiting targeted advertising on early learning  
               sites; 
                 prohibiting operators of early learning online sites  
               from using information they obtain on the early learning  
               site to target advertising on other sites; 
                 prohibiting operators from amassing a profile about an  
               early learning student except in furtherance of early  
               learning school purposes; 
                 prohibiting disclosure of early learner personal  
               information unless the disclosure is made in furtherance of  
               the early learning purpose; and 
                 requiring these early learning online operators to keep  
               the early learner personal information safe and secure.










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          3.    Conforming Amendments  

          The author proposes the following technical amendments to  
          conform ELPIPA to SOPIPA:

             On page 3, in line 4, strike out "if" and insert:  "when"

             On page 3, in line 22, strike out "Is prohibited from  
             further disclosure of" and insert:  "Shall not further  
             disclose"

             On page 3, in line 26, after "Is" insert:  "legally"

             On page 3, in line 26, strike out "(d)." and insert:   
             "(d);"

             On page 3, in line 27, strike out "compliance." and  
             insert:  "compliance;"

             On page 3, in line 28, strike out "process." and insert:   
             "process;"

             On page 3, in line 29, strike out "others, or the" and  
             insert:  "others or security of the site; or"

             On page 3, in line 31, strike out "if" and insert:   
             "provided"

             On page 3, in line 35, strike out "to" and insert:  "by"

             On page 4, in line 10, strike out the first "the"

             On page 4, in line 13, strike out "pupil if" and insert:   
             "pupil, as long as"

             On page 4, in line 14, strike out "violated" and insert:   
             "violated,"

             On page 4, in line 20, after "For" insert:  "legitimate"

             On page 4, in line 20, strike out "purposes" and insert:   
             "purposes:"










          AB 2799 (Chau)
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             On page 4, in line 21, strike out "or" and insert:  "and"

             On page 4, in line 26, strike out "of" and insert:  "on"

             On page 4, in line 38, after "including" insert:  "in"
             On page 4, in line 40, after "deidentified" insert:   
             "pupil"

             On page 4, in line 40, strike out "of a pupil" 

             On page 5, in line 4, strike out "it" and insert:  "they"

             On page 5, in line 4, strike out "meets" and insert:   
             "meet"

             On page 5, in line 16, strike out the second "the" and  
             insert:  "a"

             On page 5, in line 35, strike out "classroom," and insert:  
              "classroom"

             On page 6, in line 6, strike out "pupil's educational" and  
             insert:  "pupil"

             On page 6, in line 9, strike out "site," and insert:   
             "sites," 

             On page 6, in line 22, strike out "by" and insert:   
             "under"   


           Support  :  California State PTA; California School Boards  
          Association; Los Angeles Unified School District; Privacy Rights  
          Clearinghouse

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Common Sense Kids Action

           Related Pending Legislation  :  None Known

           Prior Legislation  :









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          SB 1177 (Steinberg, Ch. 839, Stats. 2014) See background.

          SB 568 (Steinberg, Ch. 336, Stats. 2013) prohibited an operator  
          of an Internet Web site, online service, online application, or  
          mobile application, as specified, from marketing or advertising  
          specified types of products or services to a minor; prohibited  
          an operator from knowingly using, disclosing, compiling, or  
          allowing a third party to use, disclose, or compile, the  
          personal information of a minor for the purpose of marketing or  
          advertising specified types of products or services; required  
          the operator of an Internet Web site, online service, online  
          application, or mobile application to permit a minor, who is a  
          registered user of the operator's Internet Web site, online  
          service, online application, or mobile application, to remove,  
          or to request and obtain removal of, content or information  
          posted on the operator's Internet Web site, service, or  
          application by the minor, as specified.
           Prior Vote  :

          Assembly Floor (Ayes 78, Noes 0)
          Assembly Education Committee (Ayes 7, Noes 0)
          Assembly Privacy and Consumer Protection Committee (Ayes 10,  
          Noes 0)

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