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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 gboyd@fkks.com, Jeremy Goldman at (310) 579 9611 or jgoldman@fkks.com, or any other member of the Frankfurt Kurnit Privacy and Data Security Group.
Other Privacy & Data Security Law Alerts
Six Steps to Help Your Team Comply with the New SEC Public Company Cybersecurity Rules
On July 26, 2023, the Securities Exchange Commission (“SEC”) approved final Rules entitled Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure (the “Rules”). The Rules require certain cybersecurity incident disclosures on Form 8-K, generally within 4 business days after the determination that a cybersecurity incident is material. Read more.
August 1 2023
Five Action Items to Help You Prepare for the Wave of Privacy Enforcement Starting July 2023
Mark your calendars - July 2023 is an important month for US privacy enforcement. Read more.
June 21 2023
Washington “My Health My Data” Act Dramatically Alters Health Data Compliance Landscape
Washington State’s My Health My Data Act (“the Act”) introduces a sweeping set of obligations for nearly all entities that do business in the state and that handle “consumer health data,” a broad new class of health-related data separate from that regulated by the federal Health Insurance Portability and Accountability Act (“HIPAA”). Read more.
April 24 2023
