An Act to create requirements for age verification and parental consent for application stores and to provide a penalty therefor.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That § 37-24-6 be AMENDED:

37-24-6. It is a deceptive act or practice for any person to:

(1) Knowingly act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any merchandise or the solicitation of contributions for charitable purposes, regardless of whether any person has in fact been misled, deceived, or damaged thereby;

(2) Advertise price reductions without satisfying one of the following:

(a) Including in the advertisement the specific basis for the claim of a price reduction; or

(b) Offering the merchandise for sale at the higher price from which the reduction is taken for at least seven consecutive business days during the sixty-day period prior to the advertisement.

Any person advertising consumer property or services in this state, which advertisements contain representations or statements as to any type of savings claim, including reduced price claims and price comparison value claims, shall maintain reasonable records for a period of two years from the date of sale and advertisement, which records shall disclose the factual basis for such representations or statements and from which the validity of any such claim be established. However, these reasonable record provisions do not apply to the sale of any merchandise that is of a class of merchandise that is routinely advertised on at least a weekly basis in newspapers, shopping tabloids, or similar publications and that has a sales price before price reduction that is less than fifteen dollars per item;

(3) Represent a sale of merchandise at reduced rates due to the cessation of business operations and after the date of the first advertisement remain in business under the same, or substantially the same, ownership or trade name, or continue to offer for sale the same type of merchandise at the same location for more than one hundred twenty days;

(4) Give or offer a rebate, discount, or anything of value to a person as an inducement for selling consumer property or services in consideration of giving the names of prospective purchasers or otherwise aiding in making a sale to another person, if the earning of the rebate, discount, or other thing of value is contingent upon the occurrence of an event subsequent to the time the person agrees to the sale;

(5) Engage in any scheme or plan for disposal or distribution of merchandise whereby a participant pays a valuable consideration for the chance to receive compensation primarily for introducing one or more additional persons into participation in the planner's scheme or for the chance to receive compensation when the person introduced by the participant introduces a new participant;

(6) Send, deliver, provide, mail, or cause to be sent, delivered, provided, or mailed any bill or invoice for unordered property or unordered service provided;

(7) Advertise a rate, price, or fee for a hotel, motel, campsite, or other lodging accommodation which is not in fact available to the public under the terms advertised. It is not a violation of this subdivision to establish contract rates which are different than public rates;

(8) Charge a rate, price, or fee for a hotel, motel, campsite, or other lodging accommodation which is different than the rate, price, or fee charged on the first night of the guest's stay unless, at the initial registration of the guest, a written notification of each price, rate, or fee to be charged during the guest's reserved continuous stay is delivered to the guest and an acknowledgment of receipt of the notice is signed by the guest and kept by the innkeeper for the same period of time as is required by § 34-18-21;

(9) Knowingly fail to mail or to deliver by electronic means to a future guest a written confirmation of the date and rates of reservations made for any accommodation at a hotel, motel, campsite, or other lodging accommodation when a written request for confirmation is received from the future guest;

(10) Require money in advance of arrival or a handling fee in the event of cancellation of any hotel, motel, campsite, or other lodging accommodation unless the innkeeper has a written policy or a separate contract with the guest stating so that is mailed or delivered by electronic means to the guest at or near the making of the reservation;

(11) Knowingly advertise or cause to be listed through the internet or in a telephone directory a business address that misrepresents where the business is actually located or that falsely states that the business is located in the same area covered by the telephone directory. This subdivision does not apply to a telephone service provider, an internet service provider, or a publisher or distributor of a telephone directory, unless the conduct proscribed in this subdivision is on behalf of the provider, publisher, or distributor;

(12) Sell, market, promote, advertise, or otherwise distribute any card or other purchasing mechanism or device that is not insurance that purports to offer discounts or access to discounts from pharmacies for prescription drug purchases if:

(a) The card or other purchasing mechanism or device does not expressly state in bold and prominent type, prevalently placed, that discounts are not insurance;

(b) The discounts are not specifically authorized by a separate contract with each pharmacy listed in conjunction with the card or other purchasing mechanism or device; or

(c) The discount or access to discounts offered, or the range of discounts or access to the range of discounts, is misleading, deceptive, or fraudulent, regardless of the literal wording.

The provisions of this subdivision do not apply to a customer discount or membership card issued by a store or buying club for use in that store or buying club, or a patient access program voluntarily sponsored by a pharmaceutical manufacturer, or a consortium of pharmaceutical manufacturers, that provide free or discounted prescription drug products directly to low income or uninsured individuals either through a discount card or direct shipment;

(13) Send or cause to be sent an unsolicited commercial electronic mail message that does not include in the subject line of such message "ADV:" as the first four characters. If the message contains information that consists of explicit sexual material that may only be viewed, purchased, rented, leased, or held in possession by an individual eighteen years of age and older, the subject line of each message shall include "ADV:ADLT" as the first eight characters. An unsolicited commercial electronic mail message does not include a message sent to a person with whom the initiator has an existing personal or business relationship or a message sent at the request or express consent of the recipient;

(14) Violate the provisions of § 22-25-52;

(15) Knowingly fail to disclose the amount of any mandatory fee when reservations are made by a future guest at a hotel, motel, campsite, or other lodging accommodations. A mandatory fee under this subdivision includes any resort fee or parking fee charged by the lodging accommodations whether or not the guest utilizes the amenities or the parking facility for which the fee is assessed;

(16) Cause misleading information to be transmitted to users of caller identification technologies or otherwise block or misrepresent the origin of a telephone solicitation. No provider of telephone caller identification services, telecommunications, broadband, or voice over internet protocol service may be held liable for violations of this subdivision committed by other individuals or entities. It is not a violation of this subdivision:

(a) For a telephone solicitor to utilize the name and number of the entity the solicitation is being made on behalf of rather than the name and number of the telephone solicitor;

(b) If an authorized activity of a law enforcement agency; or

(c) If a court order specifically authorizes the use of caller identification manipulation; or

(17) Violate § 58-29G-2 or 58-29G-3; or

(18) Violate the provisions of sections 2 to 19, inclusive, of this Act.

Each act in violation of this section under one thousand dollars is a Class 1 misdemeanor. Each act in violation of this statute over one thousand dollars but under one hundred thousand dollars is a Class 6 felony. Each act in violation of this section over one hundred thousand dollars is a Class 5 felony.

Section 2. That a NEW SECTION be added to a NEW CHAPTER in title 37:

Terms used in this chapter mean:

(1) "Account holder," the individual who is associated with the mobile device;

(2) "Age category," one of the following categories of individuals based on age:

(a) "Adult," an individual who is at least eighteen years of age;

(b) "Child," an individual who is under thirteen years of age;

(c) "Older teenager," an individual who is at least sixteen but less than eighteen years of age; and

(d) "Younger teenager," an individual who is at least thirteen but less than sixteen years of age;

(3) "Age category data," information about an account holder's age category that is collected by an application store provider and shared with developers;

(4) "Age rating," one or more classifications that assess the suitability of an application's content and functions for different age groups;

(5) "Application," or "app," a software application or electronic service that a user may run or direct on a mobile device, including pre-installed applications;

(6) "Application store," a publicly available website, software application, or electronic service that allows account holders to download applications from third-party developers onto a mobile device;

(7) "Application store provider," a person that owns, operates, or controls an application store that allows account holders in the state to download apps onto a mobile device;

(8) "Content description," a description of the specific content elements or functions that informed an app's age rating;

(9) "Developer," a person that owns or controls an application made available through an application store in the state or an application pre-installed onto a mobile device;

(10) "Knowingly," to act with actual knowledge or to act with knowledge fairly inferred based on objective circumstances;

(11) "Minor," an individual under eighteen years of age, unless the individual is married or legally emancipated;

(12) "Minor account," an account with an application store provider that:

(a) Is established by an individual who is a minor; and

(b) Must be affiliated with a parent account, pursuant to section 4 of this Act;

(13) "Mobile device," a phone or general purpose tablet that:

(a) Provides cellular or wireless connectivity;

(b) Is capable of connecting to the internet;

(c) Runs a mobile operating system; and

(d) Is capable of running applications through the mobile operating system;

(14) "Mobile operating system," software that:

(a) Manages mobile device hardware resources;

(b) Provides common services for mobile device programs;

(c) Controls memory allocation; and

(d) Provides interfaces for apps to access device functionality;

(15) "Parent," with respect to a minor, an individual who is reasonably believed to be a parent, a legal guardian, an individual with legal custody, or any other individual who has the legal authority to make decisions on behalf of the minor under applicable state law;

(16) "Parent account," an account with an application store provider that:

(a) Is verified to be established by an individual whom the application store provider has determined, through the application store provider's age verification methods, to be at least eighteen years old, married, or legally emancipated; and

(b) May be affiliated with one or more minor accounts;

(17) "Parental consent disclosure," the following information that an application store provider is required to provide clearly and conspicuously to a parent before obtaining parental consent:

(a) If the application store provider has an age rating for the application, the application's age rating;

(b) If the application store provider has a content description for the application, the application's content description;

(c) A description of:

(i) The personal data collected by the application from an account holder; and

(ii) The personal data shared by the application with a third party; and

(d) If personal data is collected by the application, the methods implemented by the developer to protect the personal data.

(18) "Pre-installed applications," any application or portion thereof that is present on a mobile device at the time of purchase, initial activation, or first use by the consumer, including browsers, search engines, and messaging, but excluding core operating system functions, essential device drivers, and applications necessary for basic device operation such as phone, settings, and emergency services applications. Pre-installed applications include applications, or portions thereof, installed or partially installed by the device manufacturer, wireless service provider, retailer, or any other party prior to purchase, initial activation, or first use by the consumer and which may be updated thereafter;

(19) "Significant change," a material modification to an application's terms of service or privacy policy that materially:

(a) Changes the categories of data collected, stored, or shared;

(b) Alters the application's age rating or content descriptions;

(c) Introduces in-application purchases where no in-application purchases were previously present in the application; or

(d) Introduces advertisements where no advertisements were previously present in the application; and

(20) "Verifiable parental consent," authorization that:

(a) Is provided by a parent account;

(b) Is given after the application store provider has clearly and conspicuously provided the parental consent disclosure as part of the application installation, download, purchase, or in-application purchase process; and

(c) Requires the parent to make an affirmative choice to grant or decline consent.

Section 3. That a NEW SECTION be added to a NEW CHAPTER in title 37:

An application store provider shall, at the time an individual who is located in this state creates an account with the application store provider, or on or before December 1, 2027, for an existing account:

(1) Request age category information from the individual; and

(2) Verify the individual's age category by using:

(a) Commercially available methods that are reasonably designed to ensure accuracy; or

(b) An age verification method that complies with this chapter.

Section 4. That a NEW SECTION be added to a NEW CHAPTER in title 37:

If the application store provider determines the individual is a minor, the application store provider must:

(1) Require the account to be affiliated with a parent account; and

(2) Obtain verifiable parental consent from the holder of the affiliated parent account before allowing the minor to download, install, or purchase an application, or make an in-application purchase.

Section 5. That a NEW SECTION be added to a NEW CHAPTER in title 37:

After receiving notice of a significant change from a developer, an application store provider shall:

(1) Notify the account holder of the significant change; and

(2) For a minor account:

(a) Notify the parent account; and

(b) Obtain renewed verifiable parental consent before providing access to the significantly changed version of the application; and

(3) Provide to a developer, in response to a request authorized under section 11 of this Act:

(a) Age category data for an account holder located in the state; and

(b) The status of verifiable parental consent for a minor located in the state.

Section 6. That a NEW SECTION be added to a NEW CHAPTER in title 37:

An application store provider must provide to the parent the following disclosures before obtaining consent:

(1) The age rating of the application;

(2) The content description of the application;

(3) A description of the personal data collected from a user by the application;

(4) A description of the personal data shared with a third party by the application; and

(5) The methods implemented by the developer to protect the personal data being collected from a user.

Section 7. That a NEW SECTION be added to a NEW CHAPTER in title 37:

An application store provider shall:

(1) Provide a mechanism for a parent account to withdraw consent;

(2) Notify a developer when a parent revokes verifiable parental consent;

(3) Verify the individual's age category by using commercially available methods that are reasonably designed to ensure accuracy or another age verification method that complies with this chapter; and

(4) Comply with a developer's request to prevent minor accounts from downloading or purchasing the developer's application.

For individuals under eighteen years of age, a method is commercially available if it includes affirmative age attestation by someone who is reasonably believed to be the parent or legal guardian, along with other information collected in the ordinary course of account creation or use.

Section 8. That a NEW SECTION be added to a NEW CHAPTER in title 37:

An application store provider shall protect age category data and any associated verification data by:

(1) Limiting collection and processing to data necessary for verifying an account-holder's age category, obtaining verifiable parental consent, or maintaining compliance records; and

(2) Transmitting age category data using industry-standard encryption protocols that ensure data integrity and data confidentiality.

Section 9. That a NEW SECTION be added to a NEW CHAPTER in title 37:

For a pre-installed application, an application store provider shall provide available age-category information in response to a request from a developer and take reasonable measures to facilitate verifiable parental consent for use of the application.

Section 10. That a NEW SECTION be added to a NEW CHAPTER in title 37:

An application store provider may not:

(1) Enforce a contract or terms of service against a minor, unless the application store provider has obtained verifiable parental consent;

(2) Knowingly misrepresent the information in the parental consent disclosure; or

(3) Share age category data and any associated data, except as required by this chapter or otherwise required by law.

Section 11. That a NEW SECTION be added to a NEW CHAPTER in title 37:

A developer:

(1) Shall verify:

(a) The age category data of account holders located in this state through the application store's data-sharing methods; and

(b) Whether verifiable parental consent for a minor's account has been obtained;

(2) Shall notify application store providers of a significant change to an application;

(3) May only use age category data received through the application store's data-sharing methods to:

(a) Enforce any developer-created age-related restrictions, safety-related features, or defaults; and

(b) Ensure compliance with applicable laws, rules, and regulations; and

(4) Shall request age category data or verifiable parental consent:

(a) When the account holder downloads or purchases an application, or launches a pre-installed application for the first time;

(b) When implementing a significant change to an application; or

(c) To comply with applicable law.

Section 12. That a NEW SECTION be added to a NEW CHAPTER in title 37:

A developer may request age category data:

(1) No more than once during each six-month period to verify the accuracy of age category data associated with an account holder or continued account use within the age category;

(2) When the developer reasonably suspects that an account has been transferred to a minor or suspects use by a minor outside of the minor's applicable age category; or

(3) When an account holder creates a new account with the developer.

Section 13. That a NEW SECTION be added to a NEW CHAPTER in title 37:

When implementing any developer-created age-related restrictions, safety-related features, or defaults, a developer must use the lowest age category indicated by age category data received through the application store's data-sharing methods or age data independently collected by the developer.

This section does not prohibit a developer from allowing a parent to customize age-related restrictions, safety-related features, or content settings for individual users within a minor account after the initial defaults described in this section are set.

Section 14. That a NEW SECTION be added to a NEW CHAPTER in title 37:

A developer may not:

(1) Enforce a contract or terms of service against a minor, unless the developer has verified through an application store's data-sharing methods that verifiable parental consent has been obtained;

(2) Knowingly misrepresent any information in the parental consent disclosure; or

(3) Share age category data with any person.

Section 15. That a NEW SECTION be added to a NEW CHAPTER in title 37:

A minor or the parent of a minor who has been harmed by a violation of this chapter may bring a civil action against an application store provider or a developer. In an action pursuant to this section, the court shall award a prevailing plaintiff:

(1) The greater of actual damages or one-thousand dollars for each violation;

(2) Punitive damages;

(3) Reasonable attorney's fees; and

(4) Litigation costs.

Section 16. That a NEW SECTION be added to a NEW CHAPTER in title 37:

In addition to any other remedy available under state or federal law, the attorney general may bring an action against an application store provider or a developer to:

(1) Recover a civil penalty not exceeding seven-thousand five-hundred dollars for each violation, to be forwarded to the state treasurer for deposit into the general fund;

(2) Restrain or enjoin, using the procedures set forth in §§ 37-24-16, 37-24-23, and 37-24-25, the application store provider or developer from violating this chapter;

(3) Seek injunctive relief;

(4) Obtain damage, restitution, disgorgement, or other compensation on behalf of residents of the state;

(5) Recover reasonable attorney's fees;

(6) Recover litigation costs and the costs of investigating the violation; and

(7) Recover any other relief that the court may consider appropriate.

Section 17. That a NEW SECTION be added to a NEW CHAPTER in title 37:

A developer is not liable for a violation of this chapter if the developer:

(1) Relied in good faith on applicable age category data received through an application store's data-sharing methods;

(2) Relied in good faith on notification from an application store provider that verifiable parental consent was obtained; and

(3) Complied with the requirements of this chapter.

Section 18. That a NEW SECTION be added to a NEW CHAPTER in title 37:

The immunity described in section 17 of this Act applies only to actions brought under this chapter, and does not limit a developer or application store provider's liability under any other applicable law.

Nothing in this Act shall displace any other available remedies or rights authorized under the laws of this state or the United States.

Section 19. That a NEW SECTION be added to a NEW CHAPTER in title 37:

Nothing in this chapter may be construed to:

(1) Prevent an application store provider or developer from taking reasonable measures to:

(a) Block, detect, or prevent distribution to minors of unlawful, obscene, or other harmful material;

(b) Block or filter spam;

(c) Prevent criminal activity; or

(d) Protect application store or application security;

(2) Require an application store provider to disclose user information to a developer beyond age category data or status of parental consent;

(3) Allow an application store provider or developer to implement measures required by this chapter in a manner that is arbitrary, capricious, anticompetitive, or unlawful;

(4) Require a developer to collect, retain, reidentify, or link any information beyond what is necessary to verify age category data as required by sections 11 and 12 of this Act and what is collected, retained, reidentified, or linked in the developer's ordinary course of business;

(5) Require a developer or application store provider to create, adopt, or implement an application age rating system or content classification framework; or

(6) Require an application store provider or developer to block access to an application that an account holder has downloaded or installed onto a mobile device prior to December 1, 2026, except to the extent that a parent account revokes verifiable consent for an affiliated minor account, or that there has been a significant change to the application.

Section 20. This Act is effective beginning December 1, 2026.