The activities of children on the internet, whether via computers, smart phones, or tablets, have grown exponentially in recent history. As internet access for children increased, parents began losing control of the amount and type of information collected from their children online. In an effort to increase parental control and regulate the collection and use of personal information from children on the internet, Congress enacted the Children’s Online Privacy Protection Act ("COPPA"). COPPA prohibits certain operators of websites or online services, including mobile applications, from collecting, using, or disclosing personal information from children under the age of 13 without first obtaining verifiable parental consent. See 15 U.S.C. §§ 6501–6505.

COPPA’s purpose is to give parents the ability to know about, understand, and most importantly, monitor the type of information collected from their children online. Congress designed COPPA to balance the ever-increasing importance of the internet in society with the legitimate need to protect the privacy of children’s data. However, COPPA was originally passed in 1998 before widespread expansion of mobile technology. The popularity of mobile device technology and mobile apps in recent years presents significant compliance challenges for mobile app developers and operators. Regulators are therefore expanding COPPA to address mobile technology.1 The following is a brief overview of COPPA and its applicability to marketers, developers and operators of mobile apps.

CHILDREN'S ONLINE PRIVACY PROTECTION ACT

The Federal Trade Commission has promulgated regulations, known as the COPPA Rule ("the Rule"), to implement and enforce the provisions of COPPA. See 16 C.F.R. Part 312. The Rule applies to operators of websites and online services directed to children under the age of 13. The Rule also applies to operators of general audience websites or online services that have actual knowledge that they are collecting, using, or disclosing personal information from children under the age of 13, and operators of websites or online services that have actual knowledge that they are collecting personal information directly from users of another website or online service directed to children.

The Rule includes an expansive definition of “personal information,” thus increasing the scope of potential operators covered by the Rule. Personal information includes not only the name, address, and telephone number of the child, but also the following information:

  • Online contact information, including an email address or a substantially similar identifier that permits direct contact with the child online;
  • A screen or user name that functions as online contact information;
  • A social security number;
  • A persistent identifier that can be used to recognize a user over time and across different websites or online services;
  • A photograph, video, or audio file which contains a child’s image or voice;
  • Geolocation information sufficient to identify street name and name of a city or town; and

Information concerning the child or the parents of that child that the operator collects online from the child and combines with an identifier described above.

See 16 C.F.R. § 312.2.

The Rule imposes specific requirements on operators covered by the Rule in order to comply with COPPA. If covered by the Rule, an operator must, among other things:

  1. Post an online privacy policy describing their information practices for personal information collected online from children;
  2. With few exceptions, provide direct notice to parents and obtain verifiable parental consent before collecting personal information from children;
  3. Provide parents access to their child's personal information to review and/or have the information deleted, and the opportunity to prevent further use or collection of personal information;
  4. Not condition a child’s participation in an activity on the child disclosing more personal information than is reasonably necessary to participate in such activity; and
  5. Maintain the confidentiality, security, and integrity of information they collect from children.

See 16 C.F.R. § 312.2–7. Specifically, the operator must post a clear and prominently labeled link to the online privacy policy on the home page of the website or service and at each area of the site where personal information is collected. Moreover, the policy must include the names and contact information for all operators collecting or maintaining the child’s personal information, a description of the type of information the operator collects as well as how the operator uses and discloses the information, and a specific notice that the parent can review the personal information collected from the child as well as request its deletion and refuse its further collection or use. See 16 C.F.R. § 312.4. The policy cannot contain unrelated materials, including promotional materials.

As noted above, apart from certain limited exceptions2, operators must provide parents direct notice and obtain consent before collecting personal information from children under the age of 13. The Rule sets forth the type of information required in the direct notice, as well as a list of non-exhaustive options for obtaining consent. See 16 C.F.R. § 312.5. An operator may use any method as long such method is reasonably calculated to ensure that the person providing consent is the child’s parent and is commensurate with the nature and use of the personal information collected. Operators can also apply to the FTC for pre-approval of a new consent mechanism.

Operators subject to COPPA must comply with the provisions of the Rule or face steep penalties. In fact, a court can hold an operator guilty of violating COPPA liable for civil penalties of up to $16,000 per violation. The Children's' Advertising Revue Unit ("CARU") of the Council of Better Business Bureaus frequently audits websites for COPPA compliance and works closely with the FTC. CARU also offers an FTC-approved COPPA safe harbor program.

COPPA AND MOBILE APPLICATIONS

The growth in mobile applications, both those geared to a general audience and those directed to children, raises important questions about the applicability of COPPA to mobile apps and the overall ability of mobile app developers and operators to comply with COPPA. Mobile applications add complexity to issues such as tracking technologies, and have inherent limitations as to disclosure and consent mechanisms.

As noted above, COPPA applies not only to websites but also to “online services,” which includes mobile applications that connect to the internet. Thus, operators of mobile apps directed to children, and operators of mobile apps geared to a general audience with actual knowledge they are collecting personal information from children or from sites directed at children, must comply with COPPA before collecting, using, and disclosing personal information from children under 13. A covered mobile app operator therefore needs to consider the type of information it uses and collects to determine if it falls under the definition of personal information, and if it does, how best it can comply with COPPA. Mobile app developers and operators also need to consider the type of third party content embedded in the app, as operators are liable for the collection of information that occurs through their services, even if the operator itself does not engage in the collection. See 16 C.F.R. § 312.2. For example, if the mobile app operator desires to run adds on its app, the operator must determine whether the information collection practices of the third party advertiser triggers COPPA compliance such that the operator itself must give notice and obtain consent from parents by the presence of the advertising on the app. Operators must also be careful to understand and evaluate tracking mechanisms that allow app operators and mobile advertisers to track usage across different apps and devices.

If the mobile app operator is covered by COPPA, the operator must comply with the provisions of COPPA as outlined above. Specific questions arise, however, regarding whether direct notice and consent should be obtained prior to purchase or download of the app. Notice and consent must be obtained, with limited exceptions, prior to the collection of personal information. If the mobile application collects personal information as soon as it is downloaded, the operator must provide direct notice and obtain consent at the point of purchase or before the download is complete3. The privacy policy does not need to be included in the app store prior to purchase of the app. It may be positioned on the home or landing screen of the application. However, the FTC has noted that providing the policy at the point of purchase is more useful to parents in deciding whether to permit the collection and use of the information, given that parents will have already paid for the app after the purchase has occurred.4

Other issues arise when the mobile app directs children to share information on social media, a popular feature on many apps. Operators need to be aware that it doing so, they likely subject themselves to COPPA compliance. In other words, if the mobile app allows a child to share information on social media - for example, information regarding the child’s use of the application - the mobile app will be deemed to have “collected” personal information from the child. Indeed, the Rule defines “collection” as requesting, prompting, or encouraging a child to submit personal information online, and enabling a child to make personal information publicly available in identifiable form. See 16 C.F.R. § 312.2.

Thus, given the unique attributes of mobile applications, including the interplay between purchasing and using the application, mobile app operators and developers need to consider how the Rule interacts with their data collection practices and whether they need to change their collection practices to prevent violating COPPA.

FTC ENFORCEMENT OF COPPA

Recent FTC enforcement actions send a strong message to mobile app developers and operators that the FTC is committed to enforcing COPPA and protecting children’s data privacy. For example, in December 2015, the FTC entered into a settlement with Retro Dreamer, a mobile app developer of multiple apps targeted to children. The settlement included a penalty of $300,000 against Retro Dreamer for its violations of COPPA. The FTC alleged that the company allowed third-party advertisers to collect children’s personal information through the apps without first obtaining parental consent.

Operators of mobile applications geared to a general audience are not immune from FTC enforcement of COPPA either. In September 2014, for example, the FTC entered into a settlement with Yelp, Inc. after the FTC charged the company with violating COPPA. Yelp, a popular online review site, failed to implement a functional age-screen to prevent users under the age of 13 from registering to use its app. Thus, although many registrants provided a date of birth in the registration process indicating they were under 13 years old, Yelp allowed them to register and collected personal information from them without first notifying parents and obtaining parental consent. Under the terms of the settlement, Yelp agreed to pay a $450,000 civil penalty and submit a compliance report to the FTC outlining its COPPA compliance program.

These FTC enforcement actions, among others, prove that the FTC is active in enforcing COPPA and ensuring that marketers, developers and operators of websites, online services and mobile apps protect children’s data privacy online.

IMPRESSIONS

As children’s exposure to and use of the internet increases, privacy concerns over the collection and use of children’s personal information will continue to increase as well. Given the growth in mobile applications and the expanded scope of COPPA applicability, mobile app operators must familiarize themselves with the Rule and determine if they need to comply with its requirements. Doing this analysis during the design stage of the application is key, as the operator can determine the type of information it must collect and then put in security measures to ensure proper consent, opt-out, and information storage mechanisms to ensure COPPA compliance. In all, covered operators must be committed to complying with the provisions of COPPA or be prepared to pay substantial civil penalties.