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December 29th, 2015
App Developers Pay $360,000 to Settle COPPA Charges
Two app developers recently paid a total of $360,000 to settle charges by the Federal Trade Commission ("FTC") that they violated the Children's Online Privacy Protection Act ("COPPA") Rule. The cases make clear that children's privacy online remains an FTC focus. Here's what happened.
The FTC alleged that LAI Systems, LLC and Retro Dreamer had created apps directed to children, including My Pizza Shop, Marley the Talking Dog, and Ice Cream Jump, among others, and allowed third-party advertisers to collect personal information in the form of persistent identifiers. Persistent identifiers are pieces of data tied to a particular user or device. The COPPA Rule expressly includes persistent identifiers in the definition of "personal information." Contrary to COPPA guidance, the companies allowed their advertisers to collect persistent identifiers without providing notice to or getting verifiable consent from the parents for collecting and using the information to serve ads to the children.
The settlement requires LAI Systems, LLC to pay a $60,000 civil penalty, Retro Dreamer to pay a $300,000 civil penalty - and both companies to comply with COPPA in the future. We can't know for certain why FTC fined one company five times as much as the other. But we do note that the Retro Dreamer settlement indicates that the company may have ignored warnings from one of its advertising networks that it needed to bring certain data collection practices into compliance with the COPPA rule.
These settlements make clear that children's privacy online will continue to be a subject of FTC scrutiny. And advertisers would do well to continually assess their compliance with the COPPA Rule and to discuss their COPPA obligations regularly with their third-party advertisers.
If you have questions about COPPA compliance, or about any other privacy and data security law issues, please contact S. Gregory Boyd at (212) 826 5581 or firstname.lastname@example.org, Jeremy Goldman at (310) 579 9611 or email@example.com, Rayna Lopyan at (212) 705-4842 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Privacy and Data Security Group.
Other Privacy & Data Security Law Alerts
New York City Restricts Collection of Biometric Identifiers
Major US municipalities are lining up to regulate business use of technologies to collect biometric identifiers and information. For example, Portland, Oregon, banned the use of face recognition technologies earlier this year. Now, New York City businesses must comply with a new law too: Effective July 9, 2021, any commercial establishment in New York City that collects, retains, converts, stores or shares biometric identifier information of customers must disclose such activity using clear and conspicuous signage near all customer entrances. Read more.
July 7 2021
Business Takeaways from the FTC $5 Billion Settlement with Facebook
On July 24, 2019, the FTC announced a $5 billion settlement with Facebook to address Facebook’s alleged violations of the FTC Act and its 2012 consent order with the FTC. Read more.
July 26 2019
Are You Ready for the New York Cybersecurity Regulations’ September 3rd Deadline?
Financial institutions and insurance companies operating in New York have until September 3, 2018 to comply with the next phase of New York's Cybersecurity Regulations. Here's what you need to know to avoid regulatory scrutiny. Read more.
August 10 2018