CARU Tunes In

Musical.ly Inc., operator of the Musical.ly mobile application available on the iPhone and Android operating systems (the App), has been referred to the Federal Trade Commission (FTC) by the Children’s Advertising Review Unit (CARU). CARU, in its regular role of monitoring advertising geared toward children, reviewed the marketing practices of Musical.ly and concluded that the App was marketed to children under the criteria set forth by the Children’s Online Privacy Protection Act (COPPA) and therefore must comply with COPPA standards.

The App is a social network that allows its users to create, share and view short user-generated videos, which usually take the form of music or dance videos. In its review of the App, CARU looked at the overall impression and usage of the App. CARU noted that many of the videos posted feature teens, and many of the account profiles appear to be of children who are under age 13. CARU stated that Musical.ly did not ask for age or date of birth upon registering its users, although Musical.ly did start to implement this feature during CARU’s review. Musical.ly argued that the App was not directed at children but was for a general audience, noting that the App does not feature “animated characters or child-oriented language or activities.”

CARU, however, focused its review on the overall impression left by the App. CARU was concerned that the App, even though it may not be directly marketed to children as Musical.ly claims, is in practice heavily used by children. In looking at the services and content of the App, CARU agreed that the App does not necessarily target children as its primary audience, but found that there were other factors, such as the App’s subject matter (many of the videos and stars featured on the App are popular among children under age 13), the App’s general audience (many profiles appearing to belong to children) and the visual content posted on the App (again, many appearing to feature children), that qualify the App under COPPA’s compliance criteria.

COPPA Standards

In finding that the App is secondarily marketed toward children, CARU determined that COPPA rules must be followed. COPPA provides exceptions for services that do not directly target children in their advertising but still may include children within their user base. This “hybrid service” exception allows services to set up age screens or limits by asking for a user’s age before the service is used. To comply with COPPA rules, the App must not collect personal information of a user before this age question is asked and must set up a mechanism by which no personal information is collected or used before parental notice is given and consent is obtained. If no such consent is obtained, the App must direct child visitors to a version of the service that does not involve the collection, use or disclosure of personal information as defined by COPPA, or that has a COPPA-compliant parental verification program.

Musical.ly, in its advertiser’s statement, did not agree with CARU’s determination, arguing again that its services were marketed to a general audience and that it is, therefore, not subject to COPPA rules.

The Takeaway

CARU’s determination here should make all online services take notice of how their website and services are actually used. Even if a company makes a deliberate effort to avoid child-directed marketing, regulators will look to the overall impression left by the company and will look into its actual user base in determining whether COPPA applies. We will continue to monitor this issue, particularly how the FTC responds to CARU’s referral, for future developments.