Senate Institutions debates S.69 'age-appropriate design' bill, weighs exemptions for video games and small businesses

The Senate Institutions Committee on Feb. 26 continued work on S.69, the "age-appropriate design" bill that would restrict online design and data practices deemed harmful to minors, as members reviewed draft 1.2 and discussed new exemptions and definitions.

The committee focused on two categories of changes: proposed thresholds and revenue limits intended to limit which businesses the law would cover, and language about whether the bill should exclude or treat differently video games and other content that may cause "compulsive use" or emotional distress in minors. Rick Sagle, Legislative Council attorney, walked the committee through the revision and highlighted the lines that show new language in draft 1.2.

The draft narrows the bill's reach in several ways. It proposes smaller consumer thresholds than an earlier draft (examples discussed included 25,000 or 50,000 consumers in the previous calendar year) and an annual gross revenue cap for covered entities (discussed in the meeting as "$1,000,000"). Sagle said the thresholds were adjusted after comparing Connecticut's approach and to better match Vermont's population. He also described a standard exemption for certain financial institutions, referencing federal law and the Gramm-Leach-Bliley Act as the basis for that carve-out.

A central, contested issue was whether the bill should explicitly exempt video games from the prohibition on content that "establishes emotional distress" or causes "compulsive use" by covered minors. The committee discussed examples including phone apps such as Candy Crush, console games and online social platforms with embedded games. Sagle noted the difficulty of defining "video game" and warned that a blanket carve-out could leave a large set of products outside the bill's protections. "This is draft 1.2," Sagle said while pointing to the highlighted changes, and later warned that adding a broad video-game exemption could create a "big loophole."

Committee members examined the statutory definition of "compulsive use," which the draft ties to "repetitive use of a covered business's service that materially disrupts one or more major life activities of minors, including sleeping, eating, learning, reading, concentrating, communicating or working." Members flagged that a plaintiff could argue harm under a broad definition, and discussed whether the definition should be narrowed or whether examples should be clarified.

Another debated revision would narrow the definition of a "covered business" so it applies to entities that generate a majority of revenue from online products or services. Proponents said that would exclude retailers whose primary business is selling physical goods (for example, a company that mainly sells backpacks). Opponents raised scenarios where an initially small online service could grow to generate most revenue, which could pull such companies back into coverage.

Members also discussed how the bill relies on age-assurance methods and rulemaking by the attorney general to identify "covered minors." The draft instructs the attorney general, when adopting rules, to "prioritize user privacy and accessibility over the accuracy of the assurance methods." Several members warned that prioritizing privacy and accessibility could leave age-assurance less accurate and allow some minors to be misclassified as adults, reducing protections. Sagle confirmed that the statute calls for AG rulemaking and noted that actual rules could offer options for businesses.

No final committee vote was recorded during the session. The chair asked staff to revise language based on the discussion and called a short recess to allow those changes. "Let us take a recess while you make those changes," the chair said.

Next steps: committee staff will redraft the highlighted sections of draft 1.2 to reflect the committee's directions on consumer thresholds, the covered-business revenue test and the video-game language; the committee indicated a desire to return for a vote after those changes but did not record a formal motion to report the bill out of committee during this session.