United States: COPPA Amendment Impacts Apps, Ads And Social Networks

Last Updated: January 24 2013
Article by Madeline A. Zamoyski and Tyler G. Newby

After a two-year comment process, the Federal Trade Commission adopted its long-awaited amendments to the Children's Online Privacy Protection Rule in December 2012. The amendments, which go into effect July 1, 2013, clarify, supplement and revise the Rule issued under the Children's Online Privacy Protection Act (COPPA) in many areas, and have particularly important implications for mobile application developers, advertising networks and social networking services.

COPPA imposes notice and verifiable parental consent requirements on the operators of websites or online services that are directed toward children under the age of 13 or for operators who have actual knowledge they are collecting or storing "personal information" from children under the age of 13. Operators are prohibited from conditioning a child's participation in an activity upon disclosure of unnecessary personal information and required to take reasonable steps to secure any personal information collected from children.

On a high-level, the amended Rule (i) addresses new COPPA compliance requirements for plug-ins and advertising networks; (ii) adds new categories of protected personal information, including persistent identifiers and location information; (iii) supplements the definition of "directed to children" to add criteria and clarify when age-screens are appropriate; (iv) clarifies the required language for direct notices to parents; (v) supplements the consent mechanisms available to operators (and retains "email-plus"); (vi) clarifies safe-harbor processing requirements and adds reporting requirements for safe harbor providers; and (vii) expands COPPA's security requirements to third parties that receive information from operators.

Who Is Impacted?

Operators of websites and online services subject to COPPA now face strict liability for the conduct of third party service providers (including plug-ins or ad-networks) that collect information through the operator's website or online service. This is, in part, a result of the amendment providing that personal information is collected or maintained on behalf of an operator when it is (i) collected or maintained by an agent or service provider of an operator; or (ii) the operator benefits by allowing another person to collect personal information directly from users of such operator's website or online service.

Under the amendment, third party service providers, e.g., plug-in providers and ad-networks, are liable for compliance with COPPA when they have actual knowledge of the collection of personal information directly from users of a child-directed site or service. In addition, third party service providers will be liable for compliance if a portion of their services become child-directed, e.g., if a behavioral advertising network offers age-based advertising segments to target children under 13.The FTC suggested that actual knowledge will be met in cases where (i) a child-directed content provider directly communicated the child-directed nature of its content to the other online service, or (2) a representative of the online service recognized the child-directed nature of the content.

Expanded Definition of "Personal Information"

The amended Rule both clarifies and expands the types of information considered to be "personal information" under COPPA, including (i) screen names (where it functions as online contact information);(ii) photo, video and audio files that contain a child's image or voice;(iii) geolocation data; and (iv) persistent identifiers that can be used to recognize a user over time and across different websites or online services, such as an IP address, or unique device identifier.

Under the amendment, persistent identifiers do not need to be coupled with other personal information to be considered personal information. To balance this expansion, the FTC clarified that if an operator collects a persistent identifier for the sole purpose of providing support for its internal operations, then the operator is not required to provide notice or obtain prior parental consent for such collection and use. In addition, the FTC expanded "support for internal operations" to include frequency capping of advertising and legal or regulatory compliance. The amended Rule also establishes a voluntary process where entities may submit additional proposed uses as "internal operations," subject to public consideration and comment, which the FTC will respond to within 120 days of submission.

Directed to Children

The FTC added several provisions to the definition of "directed to children", including (i) addition of musical content, presence of child celebrities and celebrities that appeal to children to the list of criteria used to determine whether a website or online service is "directed to children"; (ii) an actual knowledge standard for a plug-in, ad network or other property; and (iii) provisions outlining when an operator is permitted to age-screen to differentiate among users.

Under the amended Rule, a website or online service may meet the criteria used to determine whether it is directed to children, but if the website or online service does not target children as its primary audience, it will not be deemed "directed to children" if it (i) collects age information before collecting any personal information, and (ii) prevents the collection, use or disclosure of personal information of visitors that self-identify under 13 years of age.If a website or online service is directed to children and targets children as its primary audience, it must presume all visitors are children.

Parental Notice

The amendments clarify the specific information required in the direct notice to parents under COPPA, which includes: (i) that the operator collected the parent's online contact information (and any other information, if applicable) in order to obtain the parent's consent; (ii) that the parent's consent is required for the collection, use or disclosure of such information; (iii) any additional items of personal information that the operator intends to collect from the child or potential opportunities for disclosure, if the parent provides consent; (iv) a hyperlink to the operator's privacy policy; (v) the means by which a parent may give verifiable consent; and (vi) that if the parent does not provide consent within a reasonable time, the operator will delete all information it has collected so far.

With respect to an operator's privacy policy, the amendments remove the requirement for an operator to recite that it is restricted from conditioning a child's participation on unnecessary collection of information, and explicitly requires a link to the online notice on the landing page or home screen of the children's area of a website or child-direct app.

Verifiable Parental Consent

The amendment adds the following methods to the non-exhaustive list of approved methods for obtaining verifiable parental consent: (i) electronic scans of signed consent forms and video conferencing; (ii) collecting government issued identification and checking identification against a database of such information (provided such information is deleted after verification); (iii) monetary transaction on a credit card, debit card, or other online payment system that notifies or records each discrete transaction to the primary account holder.

Despite the FTC's initial proposal to eliminate the sliding scale approach for parental consent (also known as "email-plus"), the final amendment retains the email-plus option for information collected and used solely for internal purposes.
The amendment institutes a new voluntary approval process, where entities can propose a new consent mechanism for approval along with a statement of how the consent mechanism complies with COPPA, and, after public review and comment, the FTC will provide a written determination within 120 days of filing.

The FTC adopted provisions that allow operators participating in an FTC-approved safe harbor program to use any parental consent mechanism deemed by the safe harbor program to meet the general consent standard of 312.5(b)(1).

The Rule initially provided for five circumstances under which operators were not required to obtain parental consent prior to collection and use of certain information. The final amended Rule has some small changes, including: (i) allowing operators to collect parental contact information to provide voluntary notice to and subsequent updates about the child's participation in a website or online services; (ii) modifying the multiple use exception to allow for collection of the child and parent's online contact information and striking the collection of postal address under this exception; (iii) extending the information allowed under the child safety exception to include the parent's name and online contact information in addition to the child's name and online contact information; (iv) allowing operators to collect persistent identifiers, and no other personal information, where it is used solely to provide support for the internal operations of the website or online service; (v) allowing an operator to collect a persistent identifier, and no other personal information, from a user who affirmatively interacts with the operator and whose previous registration with the operator indicates he or she is not a child (e.g., clicking on a plug-in for an online service where the user has self-identified as 13 or over) provided that the interaction must be active and the exception does not apply if the online service passively collects personal information from the user while he or she is on another site or service.

Safe Harbor

The FTC adopted additional criteria for approval of a self-regulatory program and incorporated additional provision to clarify the process for requesting approval. In addition, the FTC instituted certain reporting and record keeping requirements for safe harbor programs that require such programs to provide annual reports on compliance, but the reports may discuss compliance in aggregate.

Security

The amended Rule requires operators to take reasonable steps to release children's personal information only to service providers and third parties that are capable of maintaining the confidentiality, security and integrity of such information and provide assurances that they will do so. This new requirement does not require operators to ensure compliance, but does require them to inquire about the entities' data security capabilities and, either by contract or otherwise, receive assurances about how the information will be treated.In addition, the amended Rule limits retention of personal information for "only as long as is reasonably necessary to fulfill the purpose for which the information was collected" and requires an operator to use reasonable measures to protect such information in connection with its deletion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Madeline A. Zamoyski
 
In association with
Related Video
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.