S.D. reaches $15M settlement with Roblox aimed at protecting kids online

South Dakota has reached a $15 million settlement with Roblox, an immersive gaming and creation platform.

The settlement will be used to protect children from online threats and to enhance the state’s educational system, according to Attorney General Marty Jackley.

“This settlement is about protecting our kids,” Jackley said in a statement.

“South Dakota is establishing a national standard for platforms to protect kids and work with law enforcement to help parents. It improves online security and provides funds to those state agencies involved in protection and education.”

Proceeds from the settlement will go toward:

• Year one: $2.6 million to fund South Dakota’s Internet Crimes Against Children Task Force, which is part of the Attorney General’s Office, along with $1 million to be divided into $500,000 for a two-year period to create a PSA campaign on online child safety, including specific references to interacting with Roblox safely, designed to reach a South Dakota audience.
• Year two: $2.5 million to fund the state Department of Education, with 20 percent of the payment allocated for funding government and nonprofit after-school programs.
• Year three: $2.5 million to fund the Department of Education, with 20 percent of the payment allocated for funding government and nonprofit after-school programs.
• Year four: $1 million to fund the South Dakota Attorney General’s Consumer Protection Fund, which will pay for future investigation and litigation against companies that violate the state’s consumer protection laws.

South Dakota also could receive up to an additional $5.4 million in damages if Roblox fails to meet any of the agreement provisions.

“Keeping South Dakota safe isn’t limited to our streets. It extends to our digital world where our children spend more time than ever before,” Gov. Larry Rhoden said in a statement.

“I am grateful for Attorney General Jackley’s leadership on this issue. We will continue to work together to build a safer South Dakota.”

Roblox will require all users to undergo age verification to ensure that children have access only to age-appropriate content on the platform. Roblox has committed to using facial age-estimation technology and government-issued ID for age confirmation and will use behavioral monitoring to identify users who may have been aged incorrectly. The settlement also explicitly addresses privacy concerns related to age verification.

Parents also will have expanded control over their children’s use of the platform under the agreement. The expansion of parental controls allows them to decide who their children are talking to and the games they are playing on the platform, as well as to restrict the transfer of in-game currency, or Robux, from adults other than trusted connections. In the absence of a parent account, the default content mode provides protections to minor users.

Adult users and those younger than 16 will not be able to chat unless they are identified as a “trusted friend” on the platform. Trusted friends for users younger than 13 require parental consent. Unless a parent elects otherwise, users age 13 to 15 may add trusted friends through a QR code or phone-contact importer.

Under the agreement, Roblox will not allow communication involving minors to be encrypted. Unencrypted communication allows law enforcement to be able to more easily combat child exploitation networks, trafficking and the distribution of illegal and harmful content.

South Dakota is one of several states to secure agreements with Roblox. The “most favored nation” clause included in the agreement ensures that South Dakota is entitled to any improved terms that are later agreed to by Roblox and any other state, Jackley’s office said.