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FTC settles another child privacy case

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The FTC routinely settles cases alleging companies have violated the Children’s Online Privacy Protection Act (COPPA). In one case, the FTC said a Ukrainian company marketed a dating app that revealed the locations of very young users. In another, the FTC said a company that offered apps containing virtual pets that kids could play with and deal with information shared about them with third-party marketing companies.

Perhaps the most high-profile COPPA case was a settlement with YouTube in which the FTC alleged the company made millions of dollars by improperly targeting ads to children.

COPPA requires websites, apps, and other online services directed to children under 13 to inform parents about their data collection practices and obtain their consent before collecting personal information about their children. The rule also applies if a company has “actual knowledge that it is collecting information about children this young”.

In a 2012 study, the FTC found that companies routinely violate COPPA by:

  • Sharing children’s personal information collected through their apps without disclosing the practice
  • Allow kids to spend real money through the app even though the app itself is free.
  • Not disclosing that apps have ads
  • Do not disclose links to social networks

In March, the FTC settled a COPPA case with another prominent company – WW International, formerly known as Weight Watchers. The FTC alleged that a subsidiary of the company called Kurbo was marketing a weight-loss app intended for use by children as young as eight years old and collecting their personal information without parental permission. The app collects information such as names, email addresses, and dates of birth; and tracks children’s food intake, activity and weight.

The FTC alleged that Kurbo’s sign-up process encouraged children to falsely claim they were over 13, and many of them later changed their profiles to show their true date of birth. Still, Kurbo allowed them to have continued access to the app. The FTC also said that parents who enroll their children can only see a notice about the collection of information if they click on a hyperlink buried in a series of other hyperlinks. Finally, the FTC said the company violated COPPA’s data retention provisions by retaining the data indefinitely and only deleting it at the request of a parent.

The policy requires WW International and Kurbo to delete unlawfully collected data unless they notify parents directly and obtain their permission to use it in a manner that complies with the law. Companies must destroy all algorithms derived from illegally collected data and, in the future, destroy data collected from children under 13 if they have not used the app for a year. Finally, the companies must pay a civil penalty of $1.5 million.

The FTC and the BBB recommend that you try out apps yourself before letting your children use them. On the online application store, look at the screenshots; read the description, content rating and user reviews; and follow the link to learn more about the developer. Talk to your kids about online do’s and don’ts, including what not to share.

If you can do it in your phone’s settings, limit the content to what’s appropriate for your child’s age. Set a password so apps can’t be downloaded and your kids can’t buy things without it.

Randy Hutchinson is the president and CEO of the Better Business Bureau of the Mid-South.