Federal Trade Commission
Press Release – 9/17/14

Children's Online Privacy Protection Act ("COPPA"):

  • COPPA was enacted to protect the privacy of children online.
  • Companies that collect information online about children who are under the age of thirteen (13) must follow certain steps to ensure that this information is protected.
  • For instance, companies must: 1) seek verifiable parental consent before collecting information from a child; and 2) clearly disclose to parents how the information that is collected will be used.

Complaint Against Yelp:

  • The Federal Trade Commission ("FTC") alleged that Yelp collected personal information from children through the Yelp app without notifying parents/guardians and obtaining their prior consent.
  • According to the complaint, consumers who registered for the Yelp app on a mobile device were asked to provide their date of birth, among other things.
  • For all registrants, including those under 13 years of age, Yelp collected information such as their name, email address and location.
  • The crux of the FTC's complaint is that Yelp violated COPPA by collecting information from registrants who indicated through their birth dates that they were children, under the age of 13.
  • It is alleged that Yelp failed to implement a "functional age-screen" in its app, as it does with its website, thereby allowing children to register for the service via the app.
  • Additionally, the complaint alleged that Yelp failed to sufficiently test its app to make sure that consumers under the age of 13 were prohibited from registering.

FTC Settles With Yelp:

  • Yelp agreed to pay a civil penalty in the amount of $450,000 to settle the charges.
  • According to the terms of the settlement, Yelp is required to delete information it collected from consumers who indicated that they were under 13 years of age at the time of registration.
  • Yelp must also comply with COPPA requirements and submit a compliance report to the FTC on a going-forward basis.

Complaint Against TinyCo:

  • The FTC brought charges against TinyCo alleging that many of its apps targeted children, such as Tiny Pets, Tiny Zoo, Tiny Monsters and other similar titles.
  • According to the complaint, the apps use themes that are particularly appealing to children, with bright colors and simple language.
  • Because these apps were directed at children under the age of 13, the FTC asserted that TinyCo was subject to the COPPA Rule.
  • Many of these apps included an optional feature that collected email addresses from users, including children.
  • The crux of the complaint suggests that TinyCo failed to follow the steps required under COPPA with respect to the collection of children's personal information.

FTC Settles With TinyCo:

  • TinyCo agreed to pay a civil penalty in the amount of $300,000.
  • The company is also required to delete the information it collected from any users under 13 years of age.
  • Similar to the settlement with Yelp, TinyCo must also comply with COPPA requirements and submit a compliance report to the FTC in the future.

Take Away:

  • The collection, use and sharing of personal information online is a high-risk matter if not handled correctly.
  • The FTC and state agencies are increasingly focusing their efforts on consumer privacy issues.
  • It should come as no surprise that regulators will be even more diligent in working to protect the rights of children who, in many cases, may be unaware of what data is being collected about them and for what purposes.
  • If your company markets products to children in any way, it is critical to ensure that your privacy practices and procedures comply with COPPA and all other applicable state and federal laws, rules and regulations.

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