On April 27, 2018, the Federal Trade Commission issued two warning letters to foreign marketers of geolocation tracking devices for violations of the U.S. Children’s Online Privacy Protection Act (“COPPA”). The first letter was directed to a Chinese company, Gator Group, Ltd., that sold the “Kids GPS Gator Watch” (marketed as a child’s first cellphone); the second was sent to a Swedish company, Tinitell, Inc., marketing a child-based app that works with a mobile phone worn like a watch. Both products collect a child’s precise geolocation data, and the Gator Watch includes geofencing “safe zones.”
Importantly, in commenting on its ability to reach foreign companies that target U.S. children, the FTC stated that “[t]he COPPA Rule applies to foreign-based websites and online services that are involved in commerce in the United States. This would include, among others, foreign-based sites or services that are directed to children in the United States, or that knowingly collect personal information from children in the United States.”
In both letters, the FTC warned that it had specifically reviewed the foreign operators’ online services and had identified potential COPPA violations (i.e., a failure to provide direct notice or obtain parental consent prior to collecting geolocation data). The FTC stated that it expected the companies to come into compliance with COPPA, including in the case of Tinitell, which had stopped marketing the watch in an effort to adhere to COPPA’s ongoing obligation to keep children’s data secure.