FTC updates online child privacy rules, gives app sellers a pass

The updated Children’s Online Privacy Protection Rule Act requires companies to obtain parental consent before collecting data from children

The Federal Trade Commission (FTC) on Wednesday updated its child online privacy rules to reflect the burgeoning growth of social networking and smartphone apps. But, in a change from an earlier proposal, app stores run by companies such as Google Inc. and Apple Inc. will not be liable for privacy violations resulting from third-party apps or plug-ins, the Wall Street Journal Law Blog reports.

The FTC launched a review of the Children’s Online Privacy Protection Act (COPPA) in 2010, amid concerns that the 1998 law had not kept pace with new technologies. This summer, the FTC proposed a series of amendments to COPPA, including new measures that would hold companies responsible for selling third-party apps that collect children’s personal data if the company “knows or has reason to know” that such violations are occurring. According to a recent FTC report, many kids’ mobile apps gather data from users and sent it to the app developer, advertisers or analytics companies.

But tech giants such as Apple, Google, Twitter and Facebook quickly launched lobbying efforts to prevent the passage of such a rule. Now the companies will not be held responsible if third-party plug ins—such as Facebook’s “Like” button—collect information from children, unless the company has “actual knowledge” of the prohibited activities.

The updated COPPA does strengthen some privacy measures, however, by requiring apps and social networks to obtain parental consent before collecting data such as photos, videos or a child’s geographic location. They also must have a parent’s approval to use tracking tools such as cookies.

“I am confident that the amendments to the COPPA Rule strike the right balance between protecting innovation that will provide rich and engaging content for children, and ensuring that parents are informed and involved in their children’s online activities,” FTC Chairman Jon Leibowitz said in a statement.

For more InsideCounsel coverage of technology and privacy concerns, see:

Celebrity fan sites fined for COPPA violations

Judge OKs Facebook’s revised privacy settlement

Manhattan DA receives $4.2 million to build cybercrime lab

LinkedIn sued over data breach

Technology: We have met the enemy, and he is us

E-discovery: 5 things every company should consider when developing a BYOD policy

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