{ "docId": "019dd923-622c-750b-8b99-856ed0788e9a", "docSlug": "40e9e62f0249", "documentTitle": "PowerSchool Holdings, Inc. (PWSC)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-04-17 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 62, "pageCount": 117, "prevPage": 61, "nextPage": 63, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "The slide uses a red callout box to emphasize the core allegation and a yellow box to provide the legal context and specific prohibitions.", "elementsJson": [ "headline_text", "callout_box", "paragraph", "bullet_list", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-856ed0788e9a/62", "deckHref": "/decks/019dd923-622c-750b-8b99-856ed0788e9a", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-856ed0788e9a.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-856ed0788e9a#slide-62", "components": [ { "bbox": { "h": 0.12, "w": 0.98, "x": 0.01, "y": 0.17 }, "kind": "callout", "text": "Spruce Point has uncovered evidence that PowerSchool is engaging in conduct that may potentially violate SOPIPA's prohibitions on student profiling and targeting advertising. We believe that if regulators were made aware of PowerSchool's conduct, they could potentially investigate and take punitive action, forcing the Company to significantly alter or discontinue its Intersect product.", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c73b2a53-c0ff-4048-b416-93e61eab8eb5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Spruce Point has uncovered evidence that PowerSchool is engaging in conduct that may potentially violate SOPIPA's prohibitions on student profiling and targeting advertising.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-fb92-756a-9da7-07da8f1bc69b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.98, "x": 0.01, "y": 0.76 }, "kind": "list", "text": "Typical SOPIPA Prohibitions: Service providers may not use information acquired through their service to engage in targeted advertising. Service providers may not use information acquired through their service to build a profile on students, except in furtherance of K-12 purposes. Service providers may not sell student information.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fd50bf66-0630-42d6-b7dd-379f7189d507", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.98, "x": 0.01, "y": 0.31 }, "kind": "paragraph", "text": "In addition to the charges levied against PowerSchool in Q.J. et al. v. PowerSchool Holdings LLC et al., Spruce Point believes it has found evidence that the Company may be potentially violating a recently passed state data privacy law called the Student Online Personal Information Protection Act (\"SOPIPA\"). Historically, student data has been regulated by the Family Education Rights and Privacy act (\"FERPA\"), which is a Federal law originally passed in 1974. The aim of FERPA was to ensure that parents and students have timely access to their education records and that records may not be transferred without consent of the parent/student. Now 50 years old, critics have argued that FERPA is wildly outdated in the digital age. One of the major shortcomings of FERPA is that liability can't fall onto vendors for FERPA violations; liability can only fall onto school districts (i.e. if a third-party company handling student data suffered a leak, or was found to be using that data inappropriately, that company could not be found liable under FERPA). SOPIPA laws address this directly, stating that vendors bear liability for violations of SOPIPA. Recognizing the inadequacy of FERPA, over half of state legislatures across the country have passed their own student privacy laws. The first bill was passed by California, which championed their SOPIPA legislation in 2014. Since then, at least 28 additional states have passed their own version of a student data privacy bill, with most states adopting language nearly identical to the California law. As they could under FERPA, SOPIPA permits vendors to collect near limitless amounts of data on K-12 students. Where the two laws differ, however, is that SOPIPA specifically spells out prohibited uses of that data by vendors.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6c4323bd-071f-42f0-8cdc-9e6d8cfd0e6d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.01, "y": 0.97 }, "kind": "source-note", "text": "Source: Appendix: California SOPIPA Language", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d0e02834-e8d1-4216-990b-1c235a8bd246", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "We Believe There Is Evidence To Suggest PowerSchool May Be Potentially Violating SOPIPA Laws", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "08bc4b0a-d859-4d1b-a907-f4259173f9ab", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "7e9c98d4-cdcb-4344-a09b-6fd1d80d03d1", "evidence": "The slide explicitly frames the company's conduct as a potential violation of law to suggest regulatory risk.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }