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Assembly Commerce and Economic Development Committee Statement to Assembly, No. 5069, Dated June 22, 2023

Summary

Statement of the Assembly Commerce and Economic Development Committee of the State of New Jersey, dated June 22, 2023, reporting Assembly Bill 5069 favorably with committee amendments. The bill prohibits the owner or operator of a social media platform from using any practice, design, feature or affordance that would cause child users to become addicted to the platform, with a civil penalty not to exceed $250,000 for each violation. An owner or operator avoids a violation by having an independent third party audit the platform annually and demonstrating that it uses no such features, and must correct any feature the audit flags within 30 calendar days. Platforms controlled by an entity with less than $100 million in gross revenue, and platforms whose primary function is video games, are exempt, and user-generated or third-party content carries no liability.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

ASSEMBLY,
No. 5069

with
committee amendments

STATE
OF NEW JERSEY

DATED: JUNE
22, 2023

The Assembly Commerce and Economic Development
Committee reports favorably and with committee amendments Assembly Bill No. 5069.

As amended and reported, this bill prohibits the owner
or operator of a social media platform from using any practice, design,
feature, or affordance that would cause child users to become addicted to the
platform. Under the bill, the owner or operator of the social media platform
would be liable for a civil penalty not to exceed $250,000 for each violation.

However, the platform would not be deemed to violate
the provisions of the bill if the owner or operator of the platform hires an
independent third party to conduct an annual audit to determine whether any of
its practices, designs, features, or affordances would cause, have the
potential to cause, or contribute to the addiction of child users to the
platform, and the owner or operator of the platform demonstrates that the
platform does not use a practice, design, feature, or affordance that causes,
or is likely to cause, the addiction of child users to the platform. If an
audit reveals that a practice, design, feature, or affordance has the potential
to cause or contributes to child user addiction, the owner or operator of the
social media platform would also be required to correct the practice, design,
feature, or affordance within 30 calendar days of the completion of the audit.
The bill also requires that a social medial platform demonstrate that it does
not use a practice, design, feature, or affordance that causes, or is likely to
cause, the addiction of child users to the platform.

Additionally, certain social media platforms would not
be subject to the requirements of the bill. These social media platforms would
include any platform that is controlled by a business entity that generated
less than $100 million in gross revenue during the preceding calendar year, or
any platform whose primary function is to enable users to play video games.

The bill also clarifies that the owner or operator of
a social media platform would not be subject to liability under this bill for:
(1) any content generated, uploaded, or shared by users of the platform; (2)
any content that is created by third-party entities and passively displayed by
the platform; (3) any information or content for which the platform was not
responsible for creating and developing; and (4) any conduct involving child
users that would otherwise be protected under certain federal law, the First
Amendment of the United States Constitution, or Article I, paragraph 6 of the
State Constitution.

COMMITTEE AMENDMENTS:

The committee amended the bill to:

(1) remove the option for a social media platform to
conduct an internal audit to be deemed not to violate the provisions of the
bill, requiring instead that the social media platform hire an independent
third party to conduct the audit;

(2) clarify that a social media platform is not
deemed to violate the bill’s provisions if the owner or operator of the
platform demonstrates that the platform does not use a practice, design,
feature, or affordance that causes, or is likely to cause, the addiction of
child users to the platform;

(3) clarify that certain provisions of the bill apply
to the owner or operator of the social media platform rather than the platform
itself; and

(4) make grammatical changes to the bill.

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