Privacy & Information Security Law Blog

On May 10, 2024, the Vermont legislature passed HB 121, which was delivered to Governor Phil Scott for signature. HB 121 would enact the Vermont Data Privacy Act (“VDPA”), the Vermont Data Broker Security Breach Notice Act and the Vermont Age-Appropriate Design Code. If enacted, the VDPA will provide a private right of action to consumers for certain violations of the VDPA. 

Applicability

The VDPA’s applicability thresholds will change over time: On July 1, 2024, the VDPA will apply to a person that conducts business in Vermont or produces products or services that are targeted to residents of Vermont and that during the preceding calendar year: (1) controlled or processed the personal data of not fewer than 25,000 consumers, excluding personal data controlled or processed solely for the purpose of completing a payment transaction; or (2) controlled or processed the personal data of not fewer than 12,500 consumers and derived more than 25 percent of the person’s gross revenue from the sale of personal data.  On July 1, 2026, “middle applicability threshold” will reduce the first criteria to 12,500 consumers, and the second criteria to 6,250 consumers and 20 percent, respectively.  On July 1, 2027, the “low applicability threshold” will reduce the first criteria to 6,250 consumers, and the second criteria to 3,125 consumers and 20 percent, respectively.

Notably, for persons conducting business in or targeting products/services to Vermonters, there are no further thresholds for the VDPA’s provisions related to minors’ personal data, including data protection assessments, and to consumer health data and consumer health data controllers. 

Controller Obligations

With some notable differences, the VDPA contains obligations for controllers that largely follow the model set by other state comprehensive privacy laws, including obligations related to implementing, reasonable security measures, and data protection impact assessments, obtaining consent to process sensitive data, and providing privacy notices with certain specified content.  Similar to the Oregon Consumer Privacy Act (OCPA), and Colorado Privacy Act (CPA) and its implementing regulations, the privacy notice must describe the categories of third parties to which the controller has disclosed the consumer’s personal data “at a level of detail that enables the consumer to understand what type of entity each third party is and, to the extent possible, how each third party may process personal data.”  The VDPA, like the Maryland Online Data Privacy Act (MODPA), contains robust data minimization requirements that go beyond what other states require, that is, to limit the collection of personal data to what is reasonably necessary and proportionate to provide or maintain a specific product or service

requested by the consumer to whom the data pertains.  The VDPA also would require controllers to provide an effective mechanism for a consumer to revoke consent to the processing of personal data and to action revocation requests within 15 days.  Controllers are prohibited from certain activities, including the sale of sensitive data (which MODPA also bans).

Consumer Rights

The VDPA follows a mostly familiar formula in terms of the rights it provides to consumers, with rights similar to those found in, for example, the OCPA, (DPDPA).  Notably, like several recent laws (e.g., OCPA, DPDPA and the Maryland Online Data Privacy Act (MODPA)), the VDPA specifically includes the right to obtain a list of third parties to which the controller has disclosed the consumer’s personal data or, if the controller does not maintain this information in a format specific to the consumer, a list of third parties to which the controller has disclosed personal data.  Controllers have 45 days to respond to consumer rights requests, with a potential 45-day extension when reasonably necessary.

Consumer Health Data

HB 121 contains a section dedicated to the confidentiality of consumer health data, which include prohibitions on (1) providing any employee or contractor with access to consumer health data (unless the employee or contractor being subject to a contractual or statutory duty of confidentiality); (2) providing any processor with access to consumer health data (unless the person and processor comply with the requirements set forth by the VDPA); and (3) using a geofence to establish a virtual boundary that is within 1,850 feet of any health care facility, including any mental health facility or reproductive or sexual health facility, for the purpose of identifying, tracking, collecting data from or sending any notification to a consumer regarding the consumer’s consumer health data.

Age-Appropriate Design Code

Subchapter 6 of HB 121 sets out the Vermont Age-Appropriate Design Code (VAADC), which covers the minimum duty of care for covered businesses that process a minor consumer’s data, and obligations and prohibitions for covered businesses subject to the VAADC.  Prohibitions include, among others, using dark patterns, using design features that “encourage excessive and compulsive use by a minor consumer,” permitting adults from monitoring/tracking minors online, and permitting unknown adults to contact minors.

Enforcement

The VDPA will be enforced by the Vermont Attorney General, who also has certain rulemaking authority.  However, unlike the vast majority of other comprehensive state privacy laws to date, the VDPA provides for a private right of action for any consumer who is harmed by a data broker’s or large data holder’s violation of the following:

• Processing sensitive data without consent.
• Selling sensitive data.
• Violation of the provisions related to confidentiality of consumer health data.

The private right of action would begin January 1, 2027 and expire on January 1, 2029. 

Effective Dates

If enacted, HB 121 will be effective as follows:

• July 1, 2024: Section 2 (public education and outreach), Section 3 (protection of personal information), Section 4 (data broker opt-out study) and Section 8 (study on Vermont Data Privacy Act).  
• July 1, 2025: Section 1 (VDPA) and Section 7 (Age-Appropriate Design Code).
• July 1, 2026: Section 5 (VDPA middle applicability threshold) and Section 11 (utilities exemption repeal).
• January 1, 2027: Section 9 (private right of action).
• July 1, 2027: Section 6 (VDPA low applicability threshold).
• January 1, 2029: Section 10 (private right of action repeal).