Many in the industry are familiar with the following scenario. A young gamer, grinding tirelessly for untold hours perfecting her skill, honing her strategy, finally qualifies for an esports tournament. For that gamer, the true hard work begins after qualification. She now has to try to convince her parents to agree to let her participate, which may include travel (though compensated) to a far off location. In many cases, the first time the parents become aware that their child even entered a tournament (much less won an all-expense paid trip to an esports tournament) is this conversation—after the child has already been offered compensation to travel to and compete in the tournament.
If you are a game publisher, tournament organizer, or otherwise involved in the logistical chain of events described herein, there may be a big problem. The collection and use of data provided by children is regulated in the United States by the Children's Online Privacy Protection Act ("COPPA"). COPPA is designed to protect the privacy of children by establishing certain requirements for websites that market to children. Most notably, COPPA requires website operators to obtain "verifiable parental consent" before collecting personal information from children. The FTC operates under the assumption that if children are the target demographic for a website, the website must assume that the person accessing the website is a child, and proper consent must be obtained. This assumption exists even if the website did not start with children as the target audience.
Failure to adhere to COPPA's requirements can result in heavy penalties and negative publicity. The FTC brought actions against Musical.ly for its TikTok platform and Google for its YouTube platform, settled for $5.7 million and $170 million respectively.
Last week, the FTC hosted a workshop on COPPA to address how consent should be obtained in many situations, such as our gaming tournament scenario. The workshop discussed compliance as it relates to image data, voice data, and education technology. This workshop was especially important for the gaming and esports industry because many entities within this industry market directly to children. Indeed, because games, tournaments, and general content are (in large part) targeted to those that are protected by COPPA, compliance issues abound in the industry.
Stay tuned to Venable's All About Advertising Law Blog and Close-Ups Entertainment and Media Blog for our thoughts on the workshop.
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