Settlement with FTC in First Test of COPPA Law for Kids Online

A maker of iPhone games targeted to kids has settled a case brought against it just last Friday by the U.S. Federal Trade Commission. The case concerned use of child players’ personal information without parental consent.

Broken Thumbs Apps is the maker of Emily’s Girl World, and a series of spinoff games, primarily for the iOS platform, that center around the fun and fashionable world of young ladies. Kids can dress up virtual models in their choice of clothes and make-up. It sounds innocuous enough, but apparently those choices were being kept on file, and perhaps analyzed.

“Defendants have failed to maintain or link to an online notice of Defendants’ information collection, use, and disclosure practices for the Emily’s Girl World app and the Emily Dress-up apps,” reads the FTC’s formal complaint (PDF available here). The complaint went on to say that Broken Thumbs failed to provide notice to parents about how the information collected from the kids would be put to use, nor did they obtain verifiable consent from those parents.

The parent company of Broken Thumbs settled for $50,000, but the FTC still wanted to make a point of things. In a statement, FTC Chairman Jon Leibowitz wrote, “The FTC’s COPPA Rule requires parental notice and consent before collecting children’s personal information online, whether through a website or a mobile app. Companies must give parents the opportunity to make smart choices when it comes to their children’s sharing of information on smart phones.”

COPPA (Children’s Online Privacy Protection Act) applies to businesses operating Web sites whose intended audience includes kids 13 years of age and younger. At the time the law was passed in 2000, it was perceived as pertaining mainly to informational sites like blogs, or gathering places like chat groups. According to the FTC Web site, “An operator must post a link to a notice of its information practices on the home page of its Web site or online service and at each area where it collects personal information from children. An operator of a general audience site with a separate children’s area must post a link to its notice on the home page of the children’s area.”

The filing of a case against a mobile apps maker demonstrates the FTC doesn’t intend to wait for the COPPA law to be amended to account for mobile games. “The home page of its Web site” will essentially be synonymous with the start screen of the game.

On the legal blog of New York-based Information Law Group, Justine Gottshall writes, “The clear message: Everyone must strictly comply with COPPA and the FTC will continue to aggressively enforce COPPA’s requirement (in most cases) for prior parental notice and consent before collecting personal information from children… Thus, at a minimum, all companies that are in the mobile space and offer products or services directed at children (or where information is knowingly collected from children) should ensure they are providing the required disclosures – which may present unique challenges for a mobile offering – and obtaining parental consent as necessary.”

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