In the FTC's first case involving mobile applications, the Commission charged a developer of apps as well as the company's president and owner with violations of the Children's Online Privacy Protection Act ("COPPA"). Specifically, W3 Innovations (d/b/a Broken Thumbs Apps) develops and distributes mobile apps that allow users to play games and share information online. Several of W3's apps were specifically directed to children, and were listed in the Games-Kids section of Apple's App Store. W3's games include "Cootie Catcher" and "Truth or Dare," as well as a group of apps that invited kids to email questions and comments to "Emily" and submit postings to the Emily Blog. The FTC alleged that the company collected and maintained thousands of email addresses through the Emily apps, as well as allowed children to publicly post information, including personal information, on message boards. According to the FTC complaint, the company did not provide notice of their information-collection practices and did not obtain verifiable parental consent prior to collecting or disclosing personal information from children. The FTC complaint indicated that these apps were "online services directed to children," and thus subject to the COPPA Rule. The parties settled with the FTC obtaining, inter alia, a $50,000 civil penalty from W3 and W3 agreeing to delete all information collected from children through the apps.
TIP: This case demonstrates that the FTC views apps as "online services" potentially subject to COPPA. Companies should thus ensure that, where appropriate, their apps comply with COPPA. In particular, companies should take care with the following types of apps: apps that are directed to children, apps that are appealing to children, or apps through which companies know that they collect children's information.