Federal Trade Commission (“FTC”) complaints filed against Yelp Inc. and TinyCo, Inc. allege violations of the Children’s Online Privacy Protection Act (“COPPA”), 15 U.S.C. §§ 6502(c) and 6505(d), and the FTC’s Children’s Online Privacy Protection Rule, 16 C.F.R. Part 312 (“COPPA Rule”) for, inter alia, the unlawful collection of personal information from children without first providing notice to, and obtaining verifiable consent from, parents.
More specifically, the Yelp complaint alleges that a registration feature of the Yelp App introduced in 2009 failed to implement a functional age-screen mechanism, thereby allowing registrations from users who indicated that they were under 13 years of age. The complaint further alleges that Yelp neglected to sufficiently test the age-restriction aspect of the Yelp App, resulting in the collection of personal information from several thousand children from 2009 to 2013.
The complaint against TinyCo—a developer of mobile apps directed to children, such as Tiny Pets, Tiny Zoo, Tiny Village, Tiny Monsters, and Mermaid Resorts (“kids’ apps”)—alleges that, through its kids’ apps, TinyCo encouraged, incentivized, and ultimately collected tens of thousands of email addresses for children under 13 years of age. Moreover, despite receiving complaints from parents, the FTC asserts that TinyCo failed to take steps to determine whether personal information of children had been collected, much less make any remedial efforts to comply with COPPA going forward.
In separate proposed settlements and stipulated orders with the FTC, filed in the U.S. District Court for the Northern District of California on September 16, 2014, Yelp and TinyCo each, respectively, agreed to pay a civil penalty (Yelp - $450,000; TinyCo - $300,000), immediately delete the information it collected from children under 13 years of age, and submit a report to the FTC in one year outlining its COPPA compliance program. Pursuant to the settlements, Yelp and TinyCo also agreed to a permanent injunction prohibiting them from violating the COPPA Rule.
Both cases and their proposed settlements help illustrate the potential liability companies face for failing to ensure that their websites and apps comply with COPPA and, in the case of Yelp, that even companies that operate websites or apps that are not directed towards children still need to make sure that they comply with COPPA.