Navigating Children’s Online Privacy Protections: Key Legislative Priorities Under COPPA 2.0

Children's Online Privacy Protections: Key Legislative Priorities Under COPPA 2.0

As digital platforms increasingly cater to younger audiences, lawmakers are pushing for stronger protections for children and teens online. This advisory series examines two proposed laws that may change the landscape for children’s privacy online. This first installment will offer an in-depth look at the Children and Teens’ Online Privacy Protection Act (COPPA 2.0) and its potential impact on privacy standards.

COPPA 2.0 was initially passed in the Senate with overwhelming support back in July. More recently, the bill was advanced by the House Committee on Energy and Commerce (the “Committee”) in September. If enacted, this law could have a significant impact on businesses operating online platforms.

COPPA 2.0 is an update to the original Children’s Online Privacy Protection Act, which was enacted in 1998. The new version significantly expands the scope of protections and imposes stricter requirements on companies with online platforms. The key provisions of COPPA 2.0 include:

      • Age Expansion: COPPA 2.0 extends the law’s protections to include not just children under 13, but also teens under the age of 17. Many businesses that were confident they were not targeting children under 13 with their services, and therefore less concerned with COPPA, may have more difficulty committing to such an assessment now that the scope of the law has expanded.

        • Data Minimization: The law introduces a “data minimization” requirement, which mandates that companies collect only the information that is necessary for the functioning of their services. This provision aims to reduce the amount of personal data collected from minors, thereby limiting the potential for misuse. This is a concept many businesses have already been grappling with in light of requirements under various comprehensive data protection laws. However, given the national reach of this law, businesses will need to be more intentional in how data is mapped across the enterprise (regardless of the state of residence of the data subject) to ensure it is meeting this obligation.

          • Prohibition on Targeted Ads: COPPA 2.0 places a ban on targeted advertising to minors without explicit consent from their parents or guardians. Businesses that rely heavily on advertising revenue would need to develop new strategies that comply with these restrictions while still reaching their target audiences effectively.

            • Right to Erasure: The law grants minors and their parents the right to request the deletion of any personal data that has been collected. This “right to erasure” is designed to give young users more control over their digital footprints. Businesses would need to establish clear and accessible processes for handling these requests. Similar to data minimization, businesses that already have processes in place for compliance with other laws will still potentially need to expand what they are covering under their current processes.

              • Parental Rights: The law would allow parents to obtain information about their child’s use of social media platforms directly from platform operators without their child’s consent, ultimately giving parents significant oversight into what their child or teen is doing online. This particular change was one of the additions made in the Committee and has been faced with some scrutiny from House Democrats who feel this change would undermine the privacy of a minor and may be the subject of continued debate.

            Despite the changes in the Committee, the legislation still has bipartisan support, reflecting a shared concern across party lines about the need for enhanced protections for children and teens online. Given this support, the bill is expected to pass the House, although the timeline for its passage and the likelihood of any additional modifications remains uncertain.

            Varnum’s Data Privacy and Cybersecurity team is closely monitoring these legislative developments and stands ready to guide clients through the complexities of the new regulations. Should laws like COPPA 2.0 be enacted, businesses will need to swiftly adapt to avoid legal risks and ensure they are effectively protecting the rights and safety of younger users. Stay tuned for the follow up advisory that will discuss the Kids Online Safety Act (KOSA) and its potential changes.

            When Is the Best Time to Start Planning Your Estate?

            When is the Best Time to Start Planning Your Estate?

            The optimal time to begin estate planning is now. It is easiest to make these important decisions before a crisis occurs. Therefore, schedule a meeting with an estate planning attorney at your earliest convenience. Your attorney will assist in guiding you through discussions with the individuals you wish to designate as your trustee or the guardian of your minor children.  If meeting with an estate planning attorney is not feasible due to budget constraints or time limitations, there are three simple, free actions you can take to better organize your affairs.

            • Review all the beneficiaries listed on your retirement accounts and life insurance policy to ensure they are accurate, up-to-date and aligned with your wishes.
            • Compile a list of all your assets and securely store it. Also, inform the person overseeing your estate about the location of the list.
            • Assign a legacy contact on your iPhone or an inactive account manager for Android users. This grants the designated person access to the data on your phone, containing crucial information about your estate.

            Update your plan anytime you have a major life change or if there is a legal amendment requiring an update. Major life changes can include celebratory occasions such as having a child, getting married or adding a grandchild to your family.  They can also include events such as divorce or the death of a loved one, especially if they are named in your plan for a specific role or as a beneficiary. Another good reason to update your plan is if you acquire a new asset. It is crucial to update the ownership of your new asset to align with your estate plan and integrate it seamlessly.

            Consider reviewing or updating your plan every few years even if you have no major changes. For instance, we proactively reach out to our clients every three years to assess if any updates are needed. Regularly reviewing your plan keeps it aligned with your goals and helps ensure future success.

            Contact Varnum’s Estate Planning Team to start or update your estate plan today.

            2025 Cost of Living Adjustments

            The Internal Revenue Service has announced the 2025 cost of living adjustments to various limits. The adjusted amounts generally apply for plan years beginning in 2025. Some of the adjusted amounts, however, apply to calendar year 2025. Please click for a printer-friendly version of the table below.

            Employee Benefits Plan

            Plan Year
            2025
            2024
            401(k), 403(b), 457 deferral limit
            $23,500
            $23,000
            Catch-up contribution limit (age 50 or older by end of year)
            $7,500
            $7,500
            Catch-up contribution limit (age 60, 61, 62, or 63 by end of year)
            $11,250
            N/A
            Annual compensation limit
            $350,000
            $345,000
            Annual benefits payable under defined benefit plans
            $280,000
            $275,000
            Annual allocations to accounts in defined contribution plans
            $70,000 (but not more than 100% of compensation)
            $69,000 (but not more than 100% of compensation)
            Highly compensated employee
            Compensation more than $155,000 in 2024 plan year
            Compensation more than $150,000 in 2023 plan year

            Health Savings Accounts

            Calendar Year
            2025
            2024
            Maximum contribution
            Family
            Self
            $8,550
            $4,300
            $8,300
            $4,150
            Catch-up contribution limit (age 55 or older by end of plan year)
            $1,000
            $1,000
            Minimum deductible
            Family
            Self
            $3,300
            $1,650
            $3,200
            $1,600
            Maximum out-of-pocket
            Family
            Self
            $16,600
            $8,300
            $16,100
            $8,050

            Social Security

            Calendar Year
            2025
            2024
            Taxable wage base
            $176,100
            $168,600
            Maximum earnings without loss of benefits
            Under full retirement age
            Year you reach full retirement age
            $1,950/mo. ($23,400/yr.)

            $5,180/mo. up to mo. of full retirement age ($62,160/yr.)
            $1,860/mo. ($22,320/yr.)

            $4,960/mo. up to mo. of full retirement age ($59,520/yr.)

            Social Security Retirement Age

            Year of Birth
            Retirement Age
            Prior to 1938
            Age 65
            1938
            65 and 2 months
            1939
            65 and 4 months
            1940
            65 and 6 months
            1941
            65 and 8 months
            1942
            65 and 10 months
            1943 – 1954
            66
            1955
            66 and 2 months
            1956
            66 and 4 months
            1957
            66 and 6 months
            1958
            66 and 8 months
            1959
            66 and 10 months
            1960 and later
            67

            Unpacking Michigan’s SOAR Fund and the Future Landscape for Economic Development

            What's ahead for Michigan's SOAR Fund

            With the election this week, there may be significant changes to the Strategic Outreach and Attraction Reserve (SOAR) Fund that supports the state’s economic development initiatives. Enacted in December 2021, the SOAR Fund comprises the Critical Industry Program (CIP) and the Strategic Site Readiness Program (SSRP), but it faces uncertainty with future funding. A proposed legislative package aims to transform the SOAR Fund with substantial appropriations, yet it has met resistance from Republican lawmakers.

            Proposed Changes

            Currently, the SOAR Fund does not have any revenue sources beyond 2024-2025. The package of legislation would provide an annual $600 million appropriation for the fund through the year 2034-2035. The package of bills would provide:

            • $250 million annually for the Make it in Michigan Fund, a rebrand of the SOAR Fund
            • $200 million annually for a new program providing funding for public transit and public development projects funded by the Michigan Mobility Trust Fund
            • $100 million annually to the Housing and Community Development Fund, a program aimed at alleviating affordable housing shortages in the state
            • $50 million annually to the Revitalization and Placemaking (RAP) Fund, which would aim to help with community revitalization and rehabilitation

            Expanded Economic Assistance Under MSF

            In its current form, the Michigan Strategic Fund (MSF) can award funds under the CIP to provide assistance due to a technological shift in product or production. Under the proposed legislation, the MSF could provide economic assistance that it determined was critical to the economic growth and development of the State, with a wide number of factors informing this determination, including the investment’s economic impact on the local community, availability of other sources of funding, and whether the qualified jobs created are at or above the median hourly wage of the prosperity region in which the project was located, among many other factors.

            The MSF can also award funds under the SSRP to provide economic assistance to create investment-ready sites to attract and promote investments for eligible activities. Under the program, eligible activities are defined as “land acquisition; site preparation and improvement; infrastructure improvements that directly benefit the site; demolition, construction, alteration, rehabilitation, or improvement of buildings on the site; environmental remediation; and architectural, engineering, surveying, and similar professional fees.”

            Legislative Challenges

            Overall, the package of legislation has failed to garner any support from Republican House or Senate members and stalled in both chambers. Senate Bills 559 and 562 were passed in the Senate along party lines on March 19, 2024, and were reported out of the House Committee on Economic Development and Small Business on June 11, 2024, but have yet to receive a vote from the full chamber. House Bills 5768, 5769 and 5780 also passed out of the House Committee on Economic Development and Small Business on June 11, 2024, but have yet to be voted on by the chamber. Finally, Senate Bills 560, 561 and 569 were all reported out of the Senate Committee on Economic and Community Development on October 31, 2023, but have yet to receive a full vote in the chamber. Given Republican opposition to these bills, if House Republicans gain control of the chamber, it could be difficult for this package of bills or a similar reintroduction to garner support. In fact, House Republicans introduced a set of bills in October 2023 aimed at imposing greater oversight of the SOAR Fund: House Bills 5136, 5137 and 5138. These bills would mandate audits of all payouts, impose heightened transparency requirements on recipients of the funds, and claw back funds when recipients fail to meet the statutory and administrative requirements. While these bills did not receive a hearing in committee, a Republican-led House could seek to institute similar oversight and enforcement provisions on the state’s various tax credits and incentive programs in the next legislative session.

            With a pivotal election approaching, Varnum LLP is closely monitoring the changes that new leadership could bring to the state’s various tax credits and incentive programs. For questions or concerns regarding any of the developments in Lansing, eligibility requirements for one of the state’s various incentive programs, or general questions regarding potential programs your business could qualify for, please reach out to Zach Meyer or Brady Diller.

             

            Emergency Benefits for Employees: Key Programs Employers Can Provide

            Navigating Employee Support During Emergencies

            Employers can provide valuable emergency benefits to help employees in some of their most trying times, whether illness, natural disaster, or anything in between. Having these benefits ready and available can help employers attract and retain employees and make hard times a little smoother. This advisory will explore some of the most common options to assist employees who have been affected by emergencies or disasters.

            Leave Sharing Programs

            Leave sharing allows employees to donate their personal leave or vacation time to a leave sharing pool. Employees who need leave for a medical emergency or major disaster (natural or otherwise) may use the leave that other employees have contributed to the leave sharing pool to extend the time they can take paid leave. Leave sharing programs are voluntary, and employees may not donate leave that is required by state or other applicable laws. Donors may not select the recipients of the leave they donated. Assuming the program is correctly established, employees who choose to donate do not pay tax on the leave they contribute, making this a good option for people who wish to help their fellow employees.

            Qualified Disaster Payments

            Employers may provide tax-free payments to employees who have experienced disasters for necessities such as residential repair, reasonable and necessary family and living expenses, funeral expenses, and replacement of key, non-luxury items including beds and kitchen appliances. Employers may not provide tax-free payments for items already covered by the employee’s insurance. Employers can select almost any payment amount, small or large, and can limit amounts by individual or for all employees, so long as the benefits are provided in a non-discriminatory manner.

            Retirement Plan and Qualified Disaster Withdrawals

            Recent changes to retirement plan rules have created new options for helping employees who experience a qualified federally-declared disaster. Employers sponsoring 401(k), 403(b), or governmental 457(b) plans may allow plan participants affected by a federally-declared disaster to take a distribution from their accounts. The distribution can be in an amount up to $22,000 (although not all participants will be permitted to take that amount). These qualified disaster recovery withdrawals are not subject to the 10% early withdrawal penalty that may otherwise apply to distributions before age 59½. Participants may repay qualified disaster recovery withdrawals to the plan over the three years following the withdrawal. This ability to repay a previous distribution can allow participants who recover from the disaster to restore retirement savings, a rare option with regard to plan distributions. To provide for qualified disaster withdrawals and repayments, the retirement plan must be amended to reflect the availability of this option.

            Non-Employer Provided Benefits

            Beyond what employers provide, employees who have experienced a federally declared emergency may be eligible for a variety of governmental (local, state, and federal) benefits. What is available depends on the specific circumstances. Employers interested in informing employees about these benefits should talk with their legal counsel or consultants to determine what is currently available and how to best communicate those options.

            Before and during a disaster, employers have many options to help employees and maintain morale. If you have questions, want more information, or need help preparing the right documentation, please contact a member of Varnum’s employee benefits team.

            5 Essential Documents for a Basic Estate Plan

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            Prepare for your future by exploring the intricacies of estate planning. Creating a comprehensive estate plan focuses on the five key documents crucial for a secure legacy including:

            1. Will

            There are two types of wills to consider. The first is a simple will that outlines how you want your assets distributed after your passing, designates a personal representative, and if applicable names a guardian and conservator for minor children. This document is filed with the probate court, and probate is required for asset administration. The second type of will, which is more common for our clients to put into place, is a pour-over will. In a pour-over will, you still designate individuals for each of the previously described roles, but instead of asset distribution, you direct that the assets without listed beneficiaries solely in your name be moved into your trust.

            2. Trust

            A trust is a legal arrangement where you (the grantor) transfer assets into the trust, managed by a trustee (usually you during your lifetime) for the benefit of beneficiaries. While alive, you serve as the grantor, trustee, and beneficiary. Upon your passing or incapacitation, a successor trustee takes over, managing assets for and distributing assets to beneficiaries according to your outlined preferences.

            3. Power of Attorney

            By signing a power of attorney, you empower someone to make legal and financial decisions on your behalf during your lifetime. It can be drafted to take effect only upon your incapacitation, but more commonly, it becomes effective upon signing. In all cases, it becomes invalid upon your death.

            4. Designation of Patient Advocate and Living Will

            This document designates someone to make medical decisions on your behalf when you cannot communicate with your treatment team. It also outlines your medical treatment preferences.

            5. Deed

            If you own real estate, you may want to consider a deed. Various types exist, all aimed at facilitating the transfer of real estate to intended beneficiaries without probate.

            In addition to these primary documents, Varnum’s Estate Planning Team also reviews clients’ beneficiary designations on retirement accounts and life insurance policies regularly to ensure alignment with their evolving needs and changes in the law.

            Contact Varnum’s Estate Planning Team to start or update your estate plan today.

            FTC Issues New HSR Premerger Notification Rules

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            On October 10, 2024, the Federal Trade Commission voted unanimously to issue its much-anticipated revisions to the Hart-Scott-Rodino (HSR) Act premerger notification form and related instructions (the “Final Rule”). Pending any legal challenges to the Final Rule, the Final Rule will go into effect 90 days following its publication in the Federal Register, which is anticipated in the coming days. For planning purposes, transacting parties should anticipate the Final Rule will take effect in mid- to late January 2025.

            While there are fewer changes being implemented in the Final Rule than as initially proposed, the Final Rule still effects a large number of material changes from current HSR practices. Below is an abbreviated list of the more notable changes proposed in the Final Rule:

            • Item 4(c)/4(d) Documents: The Final Rule increases the amount and type of materials originally requested under Items 4(c) and 4(d) of the HSR Form, including a new requirement to produce any materials prepared by or for the “supervisory deal team lead.” The supervisory deal team lead is the individual with “primary responsibility for supervising the strategic assessment of the deal, and who would not otherwise qualify as a director or officer.” Other materials now required to be produced under Items 4(c) and 4(d) of the HSR Form include ordinary-course materials that discuss market share, competition, or products or services, regardless of whether such materials were prepared in connection with the proposed transaction.
            • Deal Rationale and Competition Narratives: Parties must now provide a narrative regarding the acquisition rationale for such filer, including providing any documentation that discusses such rationale. Additionally, filers must provide narratives regarding any overlapping products or services and such party’s supply chain relationships (including whether purchases are made from the other filer or any of its or their competitors).
            • Prior Acquisitions: The Final Rule expands the requirement to disclose certain prior acquisitions during the 5 years prior to the filing to also apply to the acquired person. The Final Rule also contains commentary regarding serial acquisitions that fall outside of the scope of HSR filing requirements. This seems to indicate that serial acquirers or those pursuing a “roll-up” strategy may face increased scrutiny.
            • Organizational Structure: Filers must now provide increased visibility into its organizational structure, including minority interest holder information (which may include upstream minority interest holders who are invested in an entity above the filer).
            • Overlap Description: The Final Rule requires narratives regarding the “principal categories of products or services (current and planned) as well as information on whether [the filer] currently competes with the other filing person.”
            • Early Termination: After a multi-year hiatus, the Final Rule now resumes the practice of requesting early termination (i.e., approval in advance of the statutory 30-day waiting period). However, commentary suggests a grant of early termination may be more limited than historical practice.

            The FTC anticipates an average of 68 additional hours will be required to prepare an HSR filing (“with an average low of 10 hours for [certain transactions] and an average high of 121 hours for filings from an acquiring person in a transaction with overlaps or supply relationships”).

            In light of this, transacting parties should consider the following:

            • Be cognizant of the significant amount of additional work now involved in preparing for and making HSR filings. It is important for transacting parties to calibrate expectations for the impacts on cost and, maybe more importantly, timelines.
            • Engage HSR counsel as early as possible in the transaction process to (a) evaluate whether an HSR filing is required, (b) begin preparation of the HSR notification form, (c) coordinate gathering HSR transaction materials with the transacting parties, and (d) assess competitive overlaps.
            • Accelerate HSR-eligible transactions, if possible, to file under the current rules prior to mid-January 2025 (or consider filing on a letter of intent instead of an executed purchase agreement).
            • Know that the FTC is pressing to have “more” to scrutinize. Be aware of the expanded pool of employees, directors, officers, and others (including the supervisory deal team lead) with respect to whom the FTC is now seeking responsive documents and other materials. Also be aware of the increased scope of documents and other materials required to be disclosed in connection with the HSR filing, particularly materials regarding market share, competition, and other related topics, and discuss the need for careful review of such materials.
            • Know that the Final Rule includes specific prohibitions on exchanging certain information with the other filer, particularly regarding competition narratives.
            • Be cognizant regarding timelines to close and “gun-jumping.” Parties, including the FTC, are working through the new guidance, and the FTC will likely require new or clarifying information in connection with a filer’s materials, which may have the impact of delaying the start of the waiting period.

            Contact Varnum’s Mergers and Acquisitions team with any questions or concerns regarding the Final Rule.

            How to Develop an Effective Cybersecurity Incident Response Plan for Businesses

            Featuring a high concentration of CIPP-certified privacy professionals, Varnum attorneys guide businesses through all aspects of data privacy and cybersecurity, from compliance and policy issues to breach preparedness and response.

            Data breaches have become more frequent and costly than ever. In 2021, the average data breach cost companies more than $4 million. Threat actors are increasingly likely to be sophisticated. The emergence of ransomware-as-a-service (RaaS) has allowed even unsophisticated, inexperienced parties to execute harmful, disruptive, costly attacks. In this atmosphere, what can businesses do to best prepare for a cybersecurity incident?

            One fundamental aspect of preparation is to develop a cyber incident response plan (IRP). The National Institute of Standards and Technology (NIST) identified five basic cybersecurity functions to manage cybersecurity risk:

            • Identify
            • Protect
            • Detect
            • Respond
            • Recover

            In the NIST framework, anticipatory response planning is considered part of the “respond” function, indicating how integral proper planning is to an effective response. Indeed, NIST notes that “investments in planning and exercises support timely response and recovery actions, resulting in reduced impact to the delivery of services.”

            But what makes an effective IRP? And what else goes into quality response planning?

            A proper IRP requires several considerations. The primary elements include:

            • Assigning accountability: identify an incident response team
            • Securing assistance: identify key external vendors including forensic, legal and insurance
            • Introducing predictability: standardize crucial response, remediation and recovery steps
            • Creating readiness: identify legal obligations and information to facilitate the company’s fulfillment of those obligations
            • Mandating experience: develop periodic training, testing and review requirements

            After developing an IRP, a business must ensure it remains current and effective through regular reviews at least annually or anytime the business undergoes a material change that could alter either the IRP’s operation or the cohesion of the incident response team leading those operations.

            An effective IRP is one of several integrated tools that can strengthen your business’s data security prior to an attack, facilitate an effective response to any attack, speed your company’s recovery from an attack and help shield it from legal exposure in the event of follow-on litigation. 

            Varnum’s Data Privacy and Cybersecurity Practice Team is experienced in preparing for and responding to various forms of cybersecurity incidents. Contact one of our attorneys to discuss IRPs and other proven approaches to incident readiness to keep your business prepared.