The State of Maine recently enacted the “Act to Prevent Predatory Marketing Practices Against Minors” (the “Act”) to restrict collection of personal information from and marketing to minors. This statute becomes effective on September 12, 2009, and could threaten any type of promotion to minors in Maine, including sweepstakes and contests.

The statute was initially intended to address the collection of health-related information of minors over the Internet and other wireless devices. The initial bill was later revised during the legislative process to encompass not only health-related information of minors, but any personal information as well.

Prohibited Acts

Under the Act, it is unlawful to:

(1) knowingly collect or receive health-related information or personal information for marketing purposes from a minor without first obtaining verifiable parental consent;

(2) sell, offer for sale, or otherwise transfer to another person health-related information or personal information about a minor if that information was unlawfully collected pursuant to (1), individually identifies the minor, or will be used for “predatory marketing;” or

(3) use any health-related or personal information regarding a minor for the purpose of marketing a product or service to that minor or promoting any course of action for the minor relating to a product (what Maine has defined as “predatory marketing”).

The prohibition against “predatory marketing” appears to apply even if the marketer has obtained verifiable consent from a parent or guardian.

Key Definitions

The Act defines “health-related information” as “any information about an individual or a member of the individual’s family relating to health, nutrition, drug or medication use, physical or bodily condition, mental health, medical history, medical insurance coverage or claims or other similar data.”

“Personal information” is defined as “individually identifiable information, including: A. an individual’s first name, or first initial, and last name; B. a home or physical address; C. a social security number; D. a driver’s license or state identification card number; and E. information concerning a minor that is collected in combination with an identifier described in this subsection.”

The Act defines “marketing purposes” broadly: “with respect to the use of health-related information or personal information, [it] means the purposes of marketing or advertising products, goods or services to individuals.”

Enforcement and Potential Remedies

The Act provides three potential remedies for violations of this statute. First, the statute provides that a violation is an unfair trade practice, which can be enforced by both the Maine Attorney General and as a private right of action.

Second, the Act provides a private right of action for a person about whom information is unlawfully collected or who is the object of predatory marketing, for which such relief may include an injunction and monetary damages, plus the potential for attorneys’ fees and treble damages.

Finally, each violation of the statute constitutes a civil violation for which substantial monetary fines can be levied.

Consequences

While similar in structure, the Act goes well beyond the Children’s Online Privacy Protection Act (“COPPA”) to cover more than just children under the age of 13 and more than just the online collection of information. In fact, the legislative history of the Maine statute shows that Maine’s legislators intended to fill what Maine legislators perceived as a void that COPPA left open – namely, the collection and use of information of 13 to 18 year olds. Marketers intending to collect information from minors in Maine, or market to minors, will now have to comply not only with COPPA but Maine’s statute as well.

Unless the Maine legislature revises the Act before September 12, it appears that marketers will not be able to collect or receive personal information from a minor after that date without first obtaining verifiable parental consent, and even if such consent was obtained, marketers will not be able to use such information to market to minors. Marketers will also have to consider what to do with existing promotions that extend past September 12 and whether the scrubbing of current marketing databases to remove minor residents of Maine will be necessary.

About Frankfurt Kurnit Klein & Selz, PC
Frankfurt Kurnit Klein & Selz celebrates more than 30 years as a leading media, entertainment, advertising, and technology law firm. The firm represents some of the world’s best-known film and television producers, actors, writers, directors, distributors, publishers, financiers, models, fashion designers, athletes and sports organizations, online content and service providers, and many of the foremost advertising agencies and advertising professionals, information technology companies, corporate brands, and charitable organizations. The firm also represents corporate and individual clients in complex business transactions, venture financing, and commercial disputes; handles securities fraud, white collar defense, and other litigation; and provides advice on intellectual property, marketing, employment, ethics, tax, trusts and estates, and real estate. For more information, please visit www.fkks.com.

Contact:

Christopher R. Chase Associate Frankfurt Kurnit Klein & Selz, PC p: 212.826.5568 cchase@fkks.com www.fkks.com

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