Neurotechnology is rapidly evolving and expanding from science fiction to experimental labs to real-life consumer applications. New technologies including wearable consumer devices and implantable medical devices may soon allow companies to gain direct access into consumers’ minds by collecting a new class of highly sensitive information known as neural data.
Neural data generally refers to all information derived directly from measuring activity in a person’s nervous system. Because neurtechnology devices measure signals directly from the brain and nervous system, the data could reveal real-time insights about an individual’s mental state, emotions and cognitive function. The sensitive nature of this data raises novel legal and ethical risks for organizations that collect, process or even store the information. To proactively manage the emerging risks around neural data, organizations must understand how this data interacts with business processes. In addition, the legal and regulatory landscape around neural data is also evolving with with at least nine U.S. states enacting or considering laws regulating the collection and use of this data, creating new risks and obligations for protecting individual privacy.
Neurotechnology on the Market
While the concept of neural data and neurotechnologies may seem futuristic, such technologies are already penetrating healthcare and consumer markets. For example, wearable electroencephalogram (EEG) devices that measure neural data through electrodes placed on the scalp, like the Muse headband, the Emotiv EPOC X, and Neurable’s EEG-enabled headphones, are readily available for consumers. These devices allow users to leverage neural data for meditation, wellness tracking, gaming and even workplace productivity monitoring.
In December 2025, the FDA granted the first premarket approval for the Flow Neuroscience headset, a home-use transcranial direct current stimulation (tDCS) device designed to treat major depressive disorder. tDCS devices deliver electrical currents to specific brain regions, which scientists believe could be used to combat depression, anxiety, mood imbalance and insomnia.
Additionally, companies like Elon Musk’s Neuralink are currently conducting clinical trials of surgically implanted brain-computer interfaces—devices that attach directly to the brain and enable users to control digital devices through thought-generated neural signals and could help patients suffering from neurological conditions or physical paralysis.
Even if an organization does not design or sell neurotechnology, it may interact with neural data in other ways. Healthcare providers may process neural data from implanted medical devices designed for clinical monitoring and care. Technology companies may create or support platforms for consumer wearables and medical devices that generate and store neural data. Marketing companies may utilize neural data to track consumer attention, engagement or responses to products. Each scenario in which an organization encounters neural data opens the door to potential legal liability and regulatory risk.
Defining Neural Data
Although states have enacted unique statutory definitions, the term “neural data” broadly encompasses information generated by measuring the activity of an individual’s central or peripheral nervous system, but not information that is merely inferred from downstream physical indicators of neural activity, such as heart rate or facial expressions. The distinction between direct measurement and inference is central to legal compliance as recent state legislation focuses specifically on neural data collection rather than more general biometric data collection.
Neural data collection could pose risks to both individual mental privacy and cognitive liberty. First, neural data collection threatens mental privacy because it could bypass a consumer’s consciousness by targeting information directly from the nervous system. The unauthorized collection, storage and analysis of this data may reveal a person’s subconscious reactions and emotions before that individual can control or consent to the disclosure. Without guardrails on data collection, this data could be sold or shared with third parties, effectively commoditizing the most intimate aspects of an individual’s being.
Second, neural data collection raises concerns about cognitive liberty. With access to consumer neural data, companies could create highly personalized, subliminal advertising or content designed to exploit emotional tendencies or desires, effectively bypassing conscious defenses to influence behavior or purchasing decisions. Additionally, companies selling or operating implanted brain-computer interfaces could apply neural stimuli directly to the nervous system to manipulate brain activity and decision-making. As neurotechnology becomes more pervasive, it is vital that consumers and companies recognize and address these risks.
Existing State Legislation for Neural Data Protection
As neural data collection practices expand, state legislators are attempting to keep pace. Currently, four states have enacted legislation to limit neural data collection and bolster consumer privacy. California’s Senate Bill (SB) 1223 defines neural data as information generated by measuring central or peripheral nervous system activity, excluding data inferred from non-neural sources. The law designates neural data as “sensitive personal information” protected under the California Consumer Privacy Act, providing consumers the right to opt out and limit a business’s use of neural data to what is reasonably necessary to provide requested goods or services.
Colorado’s House Bill (HB) 24-1058 amends the Colorado Privacy Act to include neural data within the greater protected category of “sensitive data,” therefore requiring consent before processing. The bill defines neural data as information generated by measuring the activity of an individual’s central or peripheral nervous system that can be processed by or with a device.
Similarly, Connecticut’s SB 1295 adds neural data to its definition of “sensitive data” under the Connecticut Data Privacy Act, generally prohibiting controllers from processing the data unless it is reasonably necessary or the consumer expressly consents. The law also restricts the sale or use of sensitive data for targeted advertising without consumer consent.
Montana’s SB 163 expands the state’s Genetic Information Privacy Act to cover “neurotechnology data.” The state’s definition includes information generated by measuring the activity of an individual’s central or peripheral nervous systems, but excludes non-neural information derived from downstream physical indicators of neural activity. Montana’s framework is the most extensive of the current state laws, imposing detailed express consent requirements for collection, marketing and research use, disclosure, transfer, and sale of neurotechnology data. This often requires separate and informed consent per purpose and per third party.
These state laws make it clear that enterprises that interact with neural data need to treat it as sensitive data and center processing around providing clear consent choices for consumers.
Additional Neural Data Law Proposals
Various other states have proposed legislation targeting neural data collection, including Alabama (HB 436), Illinois (HB 2984), Massachusetts (H.103), Minnesota (SF 1240) and Vermont (H.208, H.210 and H.366). All seven bills treat neural data as highly sensitive and consent-based, but they differ in breadth and depth. Bills in Massachusetts (H.103) and Vermont (H.208) situate neural data within sweeping privacy frameworks, while Vermont’s H.210 adds stringent protections for minors. Minnesota’s bill and Vermont’s H.366 go further, proposing neurotech-specific rules on brain-computer interfaces and “consciousness bypass.” In contrast, Illinois’s HB 2984 proposes leveraging existing biometric privacy laws to incorporate neural data.
Together, these proposed bills highlight central themes underlying neural data regulation. Each bill requires clear, informed consent as a precondition for collection, processing or transfer, with several requiring consent per use or per transfer. Each bill also imposes purpose limitations, restricting neural data use to specific and disclosed purposes, often related to requested services or strictly necessary product functions. Several bills prohibit monetization of neural data by banning sales or targeted marketing campaigns based on the data.
Finally, Vermont’s H.366 and Minnesota’s SF 1240 specifically address consciousness bypass, which is the notion that neurotechnology could influence or bypass a person’s conscious decision-making or alter the mental functions critical to their personality without their knowledge, thereby violating personal autonomy and free will. The bills propose prohibiting consciousness bypass without specific informed consent, and they clarify that consent obtained via such bypass is not informed consent.
Even in jurisdictions that do not yet explicitly address neural data, broad privacy laws may already encompass it under other protected categories like “biometric data” or “sensitive data.” For example, Virginia’s Consumer Data Privacy Act defines “sensitive data” to include personal data revealing health diagnoses and genetic or biometric data processed to uniquely identify a person. Although the law does not expressly name “neural data,” its broad coverage of health and biometric data likely includes data from most consumer neurotechnology devices. Still, relying on these general categories creates regulatory ambiguity. By enacting legislation that specifically addresses neural data, regulators can reduce interpretive uncertainty and clarify compliance obligations for companies engaging with neural data.
Applying the Federal Regulatory Framework to Neural Data
Although no federal legislation specifically addresses neural data, existing federal regulatory frameworks may apply to neural data collection practices. For example, the HIPAA Privacy Rule governs the use and disclosure of protected health information (PHI) when created or received by covered entities and their business associates. The rule requires written authorization for any use or disclosure of such information beyond treatment, payment or healthcare operations.
Because PHI covers all individually identifiable health information related to an individual’s physical or mental condition, neural data arguably falls within this category when processed by covered entities. However, many consumer neurotechnologies are deliberately positioned as wellness or productivity tools rather than medical devices, placing them outside HIPAA’s direct scope because their manufacturers are not considered covered entities.
For entities not regulated by HIPAA, the Federal Trade Commission (FTC) may step in to regulate neural data collection. The FTC’s Health Breach Notification Rule requires vendors of personal health records and related entities to notify consumers and the FTC after unauthorized breaches of unsecured health information. If the data is created or received by a healthcare provider, health plan, employer or healthcare clearinghouse, neural data may be considered a personal health record—an electronic record of information relating to an individual’s physical or mental condition or provision of care.
If an entity interacts with neural data outside of the healthcare context altogether, it may still be subject to federal regulation under Section 5 of the FTC Act, which prohibits deceptive and unfair acts in commerce. Applying this framework to neural data, a company’s misrepresentations about how it handles such data may be considered deceptive, and its failure to implement reasonable security or using data for secondary purposes without consent may be unfair.
The current federal framework focuses on reactive enforcement but lacks proactive or preventative regulatory mandates. But in September 2025, Senators Chuck Schumer, Maria Cantwell and Ed Markey proposed more proactive legislation in the form of S.B. 2925, known as the Management of Individuals’ Neural Data (MIND) Act. The MIND Act would direct the FTC to conduct a comprehensive one‑year study of neural data and related data governance, identify gaps in existing law, and recommend a regulatory framework that protects privacy and prevents misuse while enabling responsible neurotechnology innovation. Until such a framework materializes, however, risk leaders must continue to navigate the current patchwork of state statutes and generally applicable federal enforcement principles.
How Risk Professionals Can Address Neural Data Risks
Beyond merely adhering to existing legislation, enterprises should take a forward-looking approach to combating risk. As a first step, organizations that collect, store or even incidentally receive neural data should inventory and categorize it, separating neural from non-neural data based on statutory definitions. During this inventory, teams should map intended uses—such as identification, research or marketing—to ensure each use is aligned with applicable disclosure and consent requirements.
Additionally, given the trajectory of legislation, organizations should treat neural data as sensitive by default. States like California, Connecticut and Colorado already categorize neural data as sensitive within their frameworks, and proactively adopting sensitive-data safeguards will position enterprises for compliance with pending legislation. Companies must also revisit their notice and consent policies to ensure that consent is clear, informed and appropriately granular, particularly for uses beyond the core product or service and for any transfers to third parties. Because the neural data field is rapidly evolving, risk leaders should monitor legislative activity in operational jurisdictions and engage legal counsel for guidance on changing obligations.
Moreover, even robust consent frameworks may not account for involuntary disclosure of consumer neural data. By design, neural signals expose information before conscious filtering can take place. This complicates meaningful consent because individuals may not fully appreciate the content or scope of the information being captured at the time of agreement. The problem intensifies as decoding techniques improve. A dataset collected today for a narrow purpose could reveal far more tomorrow than users anticipated when they consented. For risk leaders, careful consideration of consent agreements and data retention policies will be necessary to ensure consumers are fully aware of the scope of their consent.
Finally, the sensitive nature of neural data creates heightened cybersecurity implications. A breach of neural data that exposes internal reactions, emotions or cognitive patterns threatens to inflict disproportionate harm on individuals, invite regulatory scrutiny and erode consumer trust more severely than conventional personal data breach incidents. Enterprises must install adequate cybersecurity precautions to combat this heightened risk.
Looking Toward the Future
Neural data collection is undergoing rapid expansion and innovation, and the state and federal laws addressing the field are trying to keep pace. Organizations that proactively classify neural data as sensitive; bind use to specific, disclosed purposes; adopt granular consent policies; and harden security measures will be better positioned to adapt as statutes evolve from general privacy principles to neurotech-specific mandates. As neurotechnology usage expands, the gap between subconscious thought and collectible data continues to shrink. In response, organizations should implement proper compliance processes both to reduce liability risk and safeguard consumer mental privacy and cognitive liberty.