New Texas Privacy Law Opens the Door to a Private Right of Action

The Texas App Store Accountability Act (TASAA), effective January 1, 2026, will significantly increase regulatory and litigation risk for mobile app developers and app stores operating in Texas. The act imposes obligations regarding minors' consent for purchases, accurate age ratings, and the handling of age-verification data. Notably, the TASAA permits enforcement by both private litigants, who can seek economic damages and attorney's fees, and the Texas Attorney General, signaling a broader trend as similar laws are set to take effect in Utah and Louisiana later in 2026.

Analysis

Womble Bond Dickinson Newsletter Sign up to receive fresh content delivered to your inbox weekly! Starting January 1, 2026, mobile app developers and app stores that have not come into compliance with the Texas App Store Accountability Act may be at risk of both public and private enforcement. The TASAA imposes several obligations on app developers and app stores. In particular, the following requirements, which apply to developers who make an app available to users in Texas through an app store, are notable: The TASAA also lists specific conduct by an app developer that may form the basis of a cause of action. Such conduct includes (1) enforcing a contract or term of service against a minor who entered into an agreement without parental consent (e.g., unauthorized purchases); (2) knowingly misrepresenting an age rating or reason for that rating; and (3) sharing or disclosing personal data that was acquired pursuant to the TASAA (i.e., for age-verification purposes). Perhaps most importantly, unlike the other privacy and technology laws recently enacted in Texas, the TASAA does not explicitly restrict enforcement to the Texas Attorney General. Rather, a violation of the TASAA is actionable pursuant to the Texas Deceptive Trade Practices Act, which generally permits both private litigants and the Texas Attorney General to bring an action. Indeed, private litigants may obtain economic damages, injunctive relief, and attorney’s fees, while the Texas Attorney General may recover up to $10,000 per violation. Accordingly, although there are several gray areas surrounding the TASAA (including jurisdictional and extraterritorial issues), companies should take steps before January 1, 2026, to minimize litigation and regulatory risks–especially given that similar laws will take effect in Utah and Louisiana later in 2026. Womble’s Privacy and Cybersecurity Team assists clients with the full spectrum of proactive compliance, government investigations, and litigation in relation to consumer protection, privacy, cybersecurity, artificial intelligence, and data governance issues. Please do not hesitate to reach out to any of the authors with questions. The Texas App Store Accountability Act (TASAA), effective January 1, 2026, introduces significant new compliance obligations for mobile app developers and app stores operating within Texas. This legislation specifically addresses the enforcement of contracts against minors without parental consent, misrepresentation of age ratings, and the unauthorized sharing of personal data obtained for age verification purposes. These requirements necessitate substantial operational and policy adjustments for companies in the mobile app ecosystem. Unlike previous Texas privacy laws, TASAA uniquely permits enforcement by both private litigants and the Texas Attorney General, significantly broadening the scope of potential legal action. Private litigants can pursue economic damages, injunctive relief, and attorney's fees, while the Attorney General is authorized to levy fines up to $10,000 per violation. This dual enforcement mechanism substantially escalates the potential for litigation and financial penalties for non-compliance. The act signals a growing regulatory trend, with similar laws anticipated in Utah and Louisiana later in 2026, suggesting a broader national shift towards stricter oversight of app store practices. This evolving legislative landscape introduces increased legal and operational risks for the technology sector, particularly for companies reliant on app distribution and user data. The moderately negative sentiment and cautious tone attached to this development reflect these rising regulatory pressures across the industry.

Key Decisions for Investors

• Investors with exposure to mobile app developers and app store operators should assess these companies' proactive compliance strategies and their readiness for the TASAA's January 1, 2026, effective date.
• Evaluate the potential financial impact of increased litigation risk from private actions and regulatory fines from the Attorney General, factoring these into valuation models for affected technology and consumer-facing firms.
• Monitor legislative developments in other states like Utah and Louisiana as they indicate a growing trend in app store regulation, potentially leading to a fragmented and complex compliance landscape across the US.