FTC Rules for Child Privacy Could Affect the Way Online Companies Interact with Children
The FTC is proposing a new set of rules that will effect how social networks and Internet advertisers will interact with children online. Since the adoption of the Children’s Online Privacy Protection Act (COPPA) in 1998, many companies have found loopholes for gathering information from children without first getting parental permission as required by the law. The FTC is now proposing new rules that could affect features on popular websites such as Facebook’s “Like” button, as well as social networks for playing games on smart phones. Under COPPA, websites aimed at children have to get parental consent before gathering personal information from children under 13 years of age. However, COPPA hasn’t adapted to new advances in technology. As a result, many websites are able to circumvent the parental consent step and gather personal information from users. For example, iPhone games popular with children are able to collect personal data by linking to social networks. By having their child/customers link to social networks, companies offering these games bypass the parental consent step, which is usually accomplished by sending an email to the parent of the child.
Under the proposed rules, which could go into effect after a 30-day comment period, advertising networks and websites aimed at children will not be able to attach software to children’s websites that collect personal information without first getting parental consent. Furthermore, third parties will be held liable for any unlawful data collection.
Many online companies, including Facebook, have begun to push back against the rules and have suggested that certain features should be exempt from COPPA. They argue that software such as the “Like” button does not use information gathered about its users to create target ads.
Since the adoption of COPPA, the FTC has brought only 19 cases against companies or individuals who were charged with violations of children’s privacy laws. The largest penalty to date was brought against Walt Disney Co. when its subsidiary, Playdom, agreed to pay $3 million to settle FTC charges that 20 websites illegally collected and disclosed personal information from hundreds of thousands of children without their parent’s permission.
The FTC is expected to announce new rules August 1, 2012, which will be followed by a 30-day comment period. The new rules are intended to close loopholes for how software companies monitor children and how they use cookies to collect browsing history and information from children. Online companies are advised to pay close attention to these rules as they may require more stringent parental consent requirements and revisions to online privacy policies.
Source: http://online.wsj.com/article/SB10000872396390444130304577561411341883468.html?mod=ITP_marketplace_0
Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX. The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution. Additional information about the IP law firm and its IP law attorneys may be found at www.klemchuk.com.
Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.