AN ACT RELATING TO THE HUMAN TRAFFICKING AND CHILD EXPLOITATION PREVENTION ACT CONCERNING INDECENT DECEPTIVE TRADE PRACTICES TO CREATE ONGOING DUTIES FOR RETAILERS OF INTERNET‑ENABLED DEVICES, and to set a contingency enactment date that depends on five other states passing similar legislation.

Whereas, the United States Supreme Court in Ashcroft v. Am. Civil Liberties Union, 542 U.S. 656 (2004) held that the legislative branch may undoubtedly act to encourage the use of filters… It could also take steps to promote their development by industry, and their use by parents, which was the Supreme Court's way of signaling to the legislative branch to pass filter legislation that requires consumers to opt‑in to having access to obscene materials that are harmful to minors on internet‑enabled devices, since filters are the least restrictive means; and

Whereas, the United States Supreme Court in Ginsberg v. New York, 390 U.S. 629 (1968) held that a physical display state statute that required physical brick and mortar stores to put physical obscene material behind a physical blinder rack was constitutional under first amendment heightened scrutiny, which means that a digital blinder rack statute that requires digital retailers to put digital obscene material behind a digital blinder rack is also constitutional on the same legal basis; and

Whereas, because the United States Supreme Court, in Paris Adult Theatre I v. Slaton, 413 U.S. 49 (1973) made it clear that the states have a compelling interest to uphold community standards of decency, a statute requiring that internet‑enabled devices filter websites that facilitate human trafficking or that display obscene material is rationally related to a narrowly tailored compelling state interest; and

Whereas, sex trafficking has substantially moved from the street corner to the smartphone, which means that making websites that facilitate human trafficking and prostitution inaccessible by default on internet‑enabled devices will do more to curb the demand for such offenses more so than any other measure since the inception of the internet; and

Whereas, the General Assembly is generally opposed to online censorship unless the content is injurious to children or promotes human trafficking–only then is the General Assembly for limited censorship; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  Chapter 75 of the General Statutes is amended by adding the following new Article to read:

Article 9.

Indecent Deceptive Trade Practices.

§ 75‑150.  Title.

This Article shall be known and may be cited as the Human Trafficking and Child Exploitation Prevention Act.

§ 75‑151.  Purpose.

This Article regulates indecent deceptive trade practices and enables existing laws to catch up to modern technology or evolving unfair trade practices that harm consumers or erode contemporary community standards of decency.

§ 75‑152.  Definitions.

The following definitions apply in this Article:

(1)        Cellular telephone. – A communication device containing a unique electronic serial number that is programmed into its computer chip by its manufacturer and whose operation is dependent on the transmission of that electronic serial number along with a mobile identification number, which is assigned by the cellular telephone carrier, in the form of radio signals through cell sites and mobile switching stations.

(2)        Child pornography. – As defined under section 2256 of Title 18, United States Code, and describes an offense under G.S. 14‑190.17 or G.S. 14‑190.17A.

(3)        Computer. – As defined in section 1030 of Title 18, United States Code.

(4)        Consumer. – An individual, business, or entity that purchases or leases for personal, family, or household purposes, or any other reason, an internet‑enabled device.

(5)        Data communications device. – An electronic device that receives electronic information from one source and transmits or routes it to another, including, but not limited to, any bridge, router, switch, or gateway.

(6)        Harmful to minors. – As defined in G.S. 14‑190.13(1).

(7)        Human trafficking. – As defined in G.S. 14‑43.11 and describes an offense under that section.

(8)        Internet. – As defined in section 5362 of Title 31, United States Code.

(9)        Internet‑enabled device. – A cellular telephone, computer, data communications device, or other product manufactured, distributed, or sold in this State that provides internet access or plays a material role in distributing content on the internet.

(10)      Internet filter. – A digital blocking capability, hardware, or software that restricts or blocks internet access to websites, electronic mail, chat, or other internet‑based communications based on category, site, or content. The term includes a filter or a digital blinder rack that can be deactivated upon the satisfaction of certain nominal conditions.

(11)      Internet service provider. – A person or entity engaged in the business of providing internet access, a computer, or communications facility or device through which a consumer may obtain access to the internet. The term does not include a common carrier if it provides only telecommunications service.

(12)      Material. – As defined in G.S. 14‑190.13(2).

(13)      Minor. – As defined in G.S. 14‑190.13(3).

(14)      Nongovernment group. – A nonprofit organization exempt from federal income taxation under section 501(c)(3), Internal Revenue Code of 1986, having as a primary purpose ending sexual violence in this State, for programs for the prevention of sexual violence, outreach programs, and technical assistance to and support of youth and rape crisis centers working to prevent sexual violence. The term also includes individuals or any group that is doing anything to uphold community standards of decency.

(15)      Obscene material. – As defined in G.S. 14‑190.1. The term includes, but is not limited to, internet websites that meet the following criteria:

a.         Websites that are known to facilitate human trafficking or prostitution.

b.         Websites that display or depict images that are harmful to minors or that constitute sexual activity, sexually explicit nudity, sadomasochistic abuse, sexual conduct, or revenge pornography.

(16)      Personal identification information. – Any information that identifies a person, including an individual's photograph, social security number, driver identification number, name, email address, physical address, mailing address, or telephone number.

(17)      Prostitution. – As defined in G.S. 14‑190.13(4) and describes an offense under G.S. 14‑204.

(18)      Retailer. – Any person who regularly engages in the manufacturing, sale, or offer for sale or lease of internet‑enabled devices or services in this State that make content accessible on the internet. The term includes internet service providers and suppliers and manufacturers of internet‑enabled devices that materially play a role in distributing content on the internet or that make content accessible and that are subject to the jurisdiction of this State.

(19)      Revenge pornography. – The distribution of sexually explicit images or videos of individuals without their permission or the disclosure of private images. The term describes an offense under G.S. 14‑190.5A.

(20)      Sexual activity. – As defined in G.S. 14‑190.13(5).

(21)      Sexual conduct. – As defined in G.S. 14‑190.1(c).

(22)      Sexually explicit nudity. – As defined in G.S. 14‑190.13(6).

(23)      Social media website. – An internet website or application that enables users to communicate with each other by posting information, comments, messages, or images and that meets all of the following requirements:

a.         Is open to the public.

b.         Has more than 75 million subscribers.

c.         From its inception has not been specifically affiliated with any one religion or political party.

d.         Provides a means for the website's users to report obscene materials and has in place procedures for evaluating those reports and removing obscene material.

§ 75‑153.  Continuing duties of retailers of internet‑enabled devices.

(a)        A retailer that manufactures, sells, offers for sale, leases, or distributes an internet‑enabled device shall ensure that the product is equipped with an active and operating filter prior to sale that blocks, by default, websites that meet any of the following criteria:

(1)        Are known to facilitate human trafficking or prostitution.

(2)        Display child pornography, revenge pornography, or obscene material harmful to minors.

(b)        A retailer that manufactures, sells, offers for sale, leases, or distributes an internet‑enabled device shall do all of the following:

(1)        Make reasonable and ongoing efforts to ensure that a product's filter functions properly.

(2)        Establish a reporting mechanism, such as a website or call center, to allow a consumer to report unblocked websites displaying content described in subsection (a) of this section or to report blocked websites that are not displaying content described in subsection (a) of this section.

(3)        Report child pornography received through the reporting mechanism to the National Center for Missing and Exploited Children's CyberTipline in accordance with 18 U.S.C. § 2258A.

(4)        Establish a procedure to avoid blocking access to websites that meet any of the following criteria:

a.         Social media websites that provide a means for the website's users to report obscene materials and that have established procedures for evaluating those reports and removing obscene material.

b.         Serve primarily as a search engine.

c.         Display complete movies that meet the qualifications for a G, PG, PG‑13, or R rating by the Classification and Ratings Administration, as those qualifications existed on September 1, 2020.

(c)        Except as provided by subsection (d) of this section, a retailer of an internet‑enabled device may not provide to a consumer any methods, source code, or other operating instructions for deactivating a product's filter.

(d)       A retailer of an internet‑enabled device shall deactivate the filter on a consumer's device if the consumer does all of the following:

(1)        Requests that the filter capability be disabled.

(2)        Presents personal identification information to verify that the consumer is 18 years of age or older.

(3)        Acknowledges receipt of a warning regarding the potential danger of deactivating the filter.

(e)        Nothing in this act shall be construed to prevent a retailer of an internet‑enabled device from charging an additional reasonable fee to deactivate the filter, which the retailer may retain for profit.

(f)        The Attorney General shall prepare and make available to retailers a form that includes all content that must be in the warning described in subdivision (3) of subsection (d) of this section.

(g)        Nothing in this act shall be construed to require a retailer of an internet‑enabled device to create a database or registry that contains the names or personal identification information of adults who knowingly chose to deactivate a product's filter. A retailer of an internet‑enabled device shall take due care to protect the privacy rights of adult consumers under this section and shall not disclose the names or personal identification information of an adult consumer who has requested to deactivate a product's filter.

§ 75‑154.  Reporting; civil actions; deceptive trade practices; affirmative defense.

(a)        If the filter blocks a website that is not displaying content described in G.S. 75‑153(a) and the block is reported to a call center or reporting mechanism pursuant to G.S. 75‑153(b)(2), the website shall be unblocked within a reasonable time, but in no event later than five business days after the block is first reported. A consumer may seek judicial relief to unblock a website that was wrongfully blocked by the filter. The prevailing party in a civil litigation may seek attorneys' fees, costs, and other forms of relief.

(b)        If a retailer of an internet‑enabled device is unresponsive to a report of a website displaying content described in G.S. 75‑153(a) that has breached the filter, the Attorney General or a consumer may file a civil suit. The Attorney General or a consumer may seek damages of up to five hundred dollars ($500.00) for each website that was reported but not subsequently blocked. The prevailing party in the civil action may seek attorneys' fees, costs, and other forms of relief.

(c)        A retailer of internet‑enabled devices that fails to comply with a duty described in subsections (a) and (b) of this section has engaged in an unfair and deceptive practice in violation of G.S. 75‑1.1 and is subjected to the penalties under G.S. 75‑15‑2.

(d)       It shall be an affirmative defense in a civil action to a charge of violating this section that the dissemination of the content described in G.S. 75‑153(a) was limited to institutions or organizations having scientific, educational, or other similar justifications for displaying the material.

§ 75‑155.  Unlawful practices; penalties.

(a)        It is a violation of this section for a retailer of an internet‑enabled device if the retailer knowingly engages in any of the following:

(1)        Sells an internet‑enabled device without an activated filter that at least makes an attempt to block by default websites that display content described in G.S. 75‑153(a).

(2)        Commits a violation of G.S. 75‑153(c).

(3)        Fails to comply with the requirements of G.S. 75‑153(d) before deactivating a product's filter.

(4)        Discloses to a third party the name or the personal identification information of adult consumers who have elected to deactivate a product's filter in violation of G.S. 75‑153(c) without a court order directing otherwise.

(b)        A retailer of an internet‑enabled device shall be subject to a fine in an amount not exceeding one thousand dollars ($1,000) for the first offense under subsection (a) of this section and an amount not exceeding two thousand five hundred dollars ($2,500) for each subsequent offense.

(c)        A retailer that commits an offense under this section with one prior conviction under the same section is guilty of a Class 3 misdemeanor. A retailer that commits an offense under subsection (a) of this section with two or more prior convictions under the same section is guilty of a Class 2 misdemeanor.

(d)       A retailer of internet‑enabled devices that commits an offense under this section has engaged in an unfair and deceptive practice in violation of G.S. 75‑1.1 and is subjected to the penalties under G.S. 75‑15‑2.

(e)        Only the Attorney General or a district attorney may enforce this section.

§ 75‑156.  Exemptions.

(a)        This act shall not apply to any of the following:

(1)        An occasional sale of an internet‑enabled device by a person that is not regularly engaged in the trade business of selling internet‑enabled devices.

(2)        Products produced or sold before the effective date of this act.

(3)        Independent third‑party routers that are not affiliated with an internet service provider.

(b)        This act shall not apply to a retailer of an internet‑enabled device that is not subject to the jurisdiction of this State.

SECTION 2.  This act becomes effective on the first day of January following the day on which at least five other states enact substantially similar legislation. The Secretary of State shall inform the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives, in writing, of the date this act takes effect.