By paying a combined $750,000 in civil penalties, Yelp and mobile app developer TinyCo have both reached agreements with the Federal Trade Commission to settle charges that the companies violated the Children’s Online Privacy Protection Act.
According to the agency, Yelp unlawfully collected personal information from children over a four-year period beginning when the company’s mobile app launched in 2009. When users registered with the site and entered a birth date showing they were under the age of 13, Yelp collected the individual’s name, e-mail address, and location.
COPPA mandates that prior to the collection of such data, a parent or guardian must be notified and expressly consent to the collection. According to the FTC, Yelp did not take these actions with regard to several thousand registrants even though it knew from their registration that they triggered COPPA’s requirements. The agency said the company also failed to implement or adequately test its apps to ensure that the age-screening mechanism prohibited those under the age of 13 from registering.
In addition to a $450,000 penalty, Yelp agreed to delete the information it collected about child users and will comply with COPPA going forward.
As for TinyCo, the company’s mobile apps similarly collected information about users under the age of 13 without the required notice and consent, the FTC said. The agency noted that the colorful characters of the apps, described as “magical monsters” and “adorable animals” in a fairy tale setting, clearly established that the apps were directed at children.
Mobile apps such as Tiny Pets and Mermaid Resort were downloaded more than 34 million times, the agency said, but the apps contained an optional feature that collected users’ e-mail addresses, regardless of age. Some of the company’s apps even gave users extra in-game currency or sped up gameplay if an e-mail address was provided.
TinyCo’s $300,000 penalty is coupled with future compliance requirements and a promise to delete the improperly collected information.
To read the complaint and stipulated order in United States v. Yelp, click here.
To read the complaint and stipulated order in United States v. TinyCo, click here.
Why it matters: The settlements provide several reminders for companies. First, COPPA applies with equal force in the mobile ecosystem. Second, a site doesn’t have to be only for kids to run afoul of the statute. And third, apps should ensure age-gating mechanisms are functioning properly. “As people – especially children – move more of their lives onto mobile devices, it’s important that they have the same consumer protections when they’re using an app that they have when they’re on a website,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a press release about the actions. “Companies should take steps as they build and test their apps to make sure that children’s information won’t be collected without a parent’s consent.”