S5337-118

1. Short title This Act may be cited as the Youth Revenue Transparency Act.

2. Findings Congress finds the following: The Securities and Exchange Commission (referred to in this section as the Commission) has broad authority to require the disclosure of information if that information is in the interest of, or is material to, investors. As of the day before the date of enactment of this Act, the Commission does not require social media companies to disclose information related to the gross revenues generated from transactions involving individuals who are younger than 21 years of age (referred to in this section as young individuals) or related to the amount spent on marketing targeted toward young individuals. Requiring the reporting and standardization of the information described in paragraph (2) is in the interest of the public, and ultimately investors, for the following reasons: Young individuals in the United States are in crisis, as evidenced by the fact that, during the 10-year period preceding the date of enactment of this Act, cases of severe depression among young individuals in the United States have nearly doubled. In the 2010s, suicidal behaviors among high school students in the United States increased by more than 40 percent. The products offered by social media companies have altered the way that young individuals in the United States see themselves and the way their brains develop, and the Surgeon General has issued a historic and alarming report recognizing the detrimental impacts of those products on young individuals. Frequent users of products offered by social media companies are twice as likely to experience mental health challenges, including the formation of suicidal thoughts. 95 percent of young individuals in the United States report using products offered by social media almost constantly. Investors face increasing uncertainty as the impacts of products offered by social media companies on young individuals become clear. Valuations of social media companies have not faced volatility when investors and the public have been made aware of the adverse impacts caused by those companies, but some investors have limitations on investing in companies that harm young individuals and society at large. Disclosing the engagement that a social media company has with young individuals could inform investors so that investors can be more informed stewards of capital for their limited partners.

3. Disclosure required Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n) is amended by adding at the end the following: In this subsection: The term covered issuer means an issuer— that is a social media company; and the securities of which are registered under section 12; or that is required to file annual reports under section 15(d). The term financial statement, with respect to any proxy or consent solicitation material for an annual meeting of shareholders of a covered issuer, means a balance sheet, cash flow statement, or income statement that is included in that proxy or consent solicitation material. The term marketing means any activity carried out by a covered issuer to attract new customers or to increase usage by existing customers. The term social media company means an entity that operates a digital platform that facilitates the sharing of content, ideas, and information to promote social interaction through websites, applications, and other platforms. The term young individual means an individual who is younger than 21 years of age. Each covered issuer shall disclose in each financial statement included in any proxy or consent solicitation material for an annual meeting of the shareholders of the covered issuer, for the applicable period— the gross revenues generated from transactions involving young individuals; and the total amount spent on marketing targeted toward young individuals. (l)Disclosure regarding young individuals(1)DefinitionsIn this subsection:(A)Covered issuerThe term covered issuer means an issuer—(i)that is a social media company; and(ii)(I)the securities of which are registered under section 12; or (II)that is required to file annual reports under section 15(d).(B)Financial statementThe term financial statement, with respect to any proxy or consent solicitation material for an annual meeting of shareholders of a covered issuer, means a balance sheet, cash flow statement, or income statement that is included in that proxy or consent solicitation material.(C)MarketingThe term marketing means any activity carried out by a covered issuer to attract new customers or to increase usage by existing customers.(D)Social media companyThe term social media company means an entity that operates a digital platform that facilitates the sharing of content, ideas, and information to promote social interaction through websites, applications, and other platforms.(E)Young individualThe term young individual means an individual who is younger than 21 years of age.(2)RequirementEach covered issuer shall disclose in each financial statement included in any proxy or consent solicitation material for an annual meeting of the shareholders of the covered issuer, for the applicable period—(A)the gross revenues generated from transactions involving young individuals; and(B)the total amount spent on marketing targeted toward young individuals..