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September 23rd, 2014
FTC Settles With Yelp and TinyCo Over Alleged COPPA Violations
Yelp, a business search and review service website, and TinyCo, a developer of gaming apps geared towards children, recently agreed to settle FTC allegations that they failed to comply with the Children's Online Privacy Protection Act Rule ("COPPA"), which requires an operator of a website or app to 1) provide notice of its policies on collection, use and disclosure of personal information from children under 13; and 2) obtain verifiable parental consent prior to collection, use or disclosure of personal information from children under 13.
Under the terms of both settlements, the companies will have to pay a civil penalty ($450,000 from Yelp and $300,000 from TinyCo), comply with COPPA going forward, and delete information the company already collected from children under the age of 13.
Yelp and TinyCo are examples of the two types of scenarios that implicate COPPA: 1) when an operator of a website or app "has actual knowledge that it is collecting or maintaining personal information from a child" (Yelp); and 2) when a web site or online service is "directed to children" (TinyCo).
The FTC alleged that from 2009 to 2013, Yelp collected personal information from registrants under the age of 13 without meeting the parental notice and consent requirements of COPPA because Yelp's mobile app had a defective screening mechanism that failed to prevent children under the age of 13 from registering for a new account. Because the faulty mechanism accepted registrations from users who input any date of birth, including dates of birth clearly indicating that the user was under the age of 13, the FTC alleged that Yelp "had actual knowledge" that kids under 13 were registering on the mobile app.
In the case of TinyCo, the FTC alleged that the company's apps (Tiny Pets, Tiny Zoo, Tiny Village, Time Monsters and Mermaid Resort) allowed users - children under the age of 13 - to procure in-app game enhancements in exchange for their email addresses. The FTC alleged that TinyCo's apps were geared towards children because of "brightly-colored," "animated characters" of a "tiny" or "little" size, in "fantasy" or "animal" contexts, accompanied by "gameplay language [that] is simple and would be easy for a child under 13 to understand."
If the FTC's assessment of whether an app is geared towards children sounds imprecise, readers should take heed: operators of apps should always assume that children under the age of 13 will be interacting with their product, whether geared towards them or not, and should ensure that all mechanisms in their apps-especially safety and privacy features-align with their stated privacy policies.
Read the FTC's full press releases on both settlements: "FTC case against Yelp shows that COPPA isn't just for kids' sites" and "Big COPPA problems for TinyCo."
For more information on these settlements or any other advertising or marketing law issues, please contact Greg Boyd at (212) 826 5581 or gboyd@fkks.com, Sean Kane at (212) 705 4845 or skane@fkks.com, or Jessica Smith at (212) 705 4876 or jsmith@fkks.com, or any other member of the Frankfurt Kurnit Advertising or Interactive Entertainment Group.
Other Advertising Law Alerts
What the Advertising Industry Can Learn from Kim Kardashian’s Settlement with the SEC
On October 3, 2022, the Securities and Exchange Commission (SEC) announced that it entered into a $1.26 million settlement with Kim Kardashian over her social media promotion of the EMAX token without disclosing payment she received from token issuer, EthereumMax. The matter provides important lessons for advertisers. Read more.
October 10 2022
Get Ready for California’s New “Automatic Renewal” Rules
California recently amended its Automatic Purchase Renewals law. The amended statute - effective July 1st -- require marketers to provide consumers of automatic renewal or continuous service offers with more information and easier ways to terminate. Read more.
June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018
