What happened?

On May 8, 2024, the Colorado legislature passed bill SB 41 which amends the Colorado Privacy Acy, establishing enhanced protections for children. It is expected that it will be signed into law by Colorado Governor Jared Polis.

What are the details?

Key Bites

• The bill affects all entities, including small businesses, which manage consumer data and operate in Colorado or target its residents. This holds irrespective of their business size or revenue.
• A controller that offers an online service, product, or features to a consumer that the controller knows or willfully disregards is a minor, has an overall duty to: 
• Use reasonable care to avoid any heightened risk of harm to minors caused by the service, product, or feature.
• Conduct, and review as necessary, a data protection assessment for the service, product, or feature if there is a heightened risk of harm to minors and maintain documentation regarding the assessment for a specified period.
• Unless the minor or, for a minor who is under 13 years of age, the minor’s parent or legal guardian has consented, a controller is prohibited from processing a minor’s personal data:

• For the purpose of targeted advertising, selling the minor’s personal data, or profiling the minor’s personal data.
• For any processing purpose other than the purpose disclosed at the time the minor’s personal data is collected or a purpose reasonably necessary for the disclosed processing purpose.
• For longer than reasonably necessary to provide the service, product, or feature.
• Using a system design feature to significantly increase, sustain, or extend a minor’s use of the service, product, or feature.
• Collecting a minor’s precise geolocation, except under specified circumstances

• The bill does not specify exact penalties for non-compliance. Penalties would likely depend on the violation’s nature, severity, and any resulting harm to minors.

For a good breakdown click here.

Business Considerations

• Employers will need to be mindful of these new requirements and ensure their practices comply if the bill becomes law, especially if their business offers online services, products, or features to minors.
• Employers should assess their current data processing practices to identify any areas that may not comply with the new law, especially if the CPA does not cover them.
• Employers should conduct a data protection assessment for any service, product, or feature that poses a heightened risk of harm to minors. They should maintain documentation regarding the assessment for a specified period.
• Employers should make the necessary changes to ensure their policies and practices comply, especially regarding the overall duty, which includes (1) obtaining consent before processing a minor’s data for certain purposes, (2) avoiding the use of system design features that significantly increase a minor’s use of your service, (3) and limiting the collection of a minor’s precise geolocation data.

Source References

• CO SB 41

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