Congress enacted the Children’s Online Privacy Protection Act (“COPPA”) in 1998 to prohibit unfair or deceptive acts or practices in connection with the collection, use and disclosure of personal information from children under the age of 13 on the Internet. The Act requires operators of websites or online services directed at children to obtain verifiable parental consent prior to collecting, obtaining or using information of or from children under 13. The Act required the FTC to promulgate regulations implementing COPPA, and those “Rules” first became effective in 2000. By law, the FTC is required to undertake a review of the Rules’ effectiveness within five years and report its findings regarding industry practices relating to use of information collected from children online and the effectiveness of the Act.
The FTC undertook just such a review and last month (February 2007), the FTC released the results of its review. In brief, the FTC concluded:
- The Rule does not need to be modified at this time
- The migration of younger children to more general audience websites (e.g., social networking sites) highlights the need for supplemental technological solutions, such as age verification technologies, to provide additional measures of security for children as they increasingly engage in online activities
- The FTC should and will continue its law enforcement and regulatory efforts, targeting significant violations and seeking increasingly larger civil penalties to deter unlawful conduct
Ultimately, the FTC believes the combination of rulemaking, law enforcement and education of businesses and consumers during the Rule’s first five years has encouraged a culture of privacy and safety without imposing undue costs on website operators or providers of online services. The FTC expects to continue its approach in evaluating and enforcing COPPA to provide these protections, and promises to respond to rapid technological changes and developments in a timely fashion. The FTC report also includes findings regarding the impact of the Rules on costs (e.g., cost-benefit analysis); whether the Rules conflict with any other laws or regulations; and any effects advances in technology have or may have on the Rules.