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COPPA Year In Review: Winners and Losers

By Sheila Millar on December 8, 2014
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Since new requirements under the updated Children’s Online Privacy and Protection Act (COPPA) entered into force in July, 2013, the Federal Trade Commission (FTC) has moved into an active enforcement phase, while also fielding requests to recognize new parental consent methods and safe harbor programs.  Those interested in children’s online activities can draw some important lessons from these activities.

  • Enforcement Actions.  In September of this year, the FTC settled with Yelp, Inc. and TinyCo. Inc., obtaining $450,000 and $300,000, respectively, for allegedly violating COPPA by collecting data on users under thirteen without parental consent.  Last month, TRUSTe, Inc., a company that provides a number of privacy “seal” programs, including a COPPA safe harbor program, incurred a $200,000 fine for failing to review its customers’ privacy policies before recertifying their seals, contrary to representations by TRUSTe that it reviewed them.

LESSONS LEARNED:  COPPA isn’t just for kids’ sites.  And, by the way, if you’re a seal program, make sure you don’t overstate the parameters of your program.

  • Parental Consent Methods.  Imperium Inc.’s application for a new parental consent method using knowledge-based questions was approved in December, 2013.  Others weren’t so fortunate.  The FTC rejected iVerify’s proposal to use Social Security Numbers and knowledge-based authentication questions in February, 2014 because the proposal was simply a variation on already-approved consent methods.  In July, 2014, the FTC received a proposal from AgeCheq, Inc. detailing two methods for obtaining parental consent under COPPA: (1) a method involving a financial transaction; and (2) a requirement that parents print, sign, and return a form providing consent to AgeCheq.  The FTC rejected the proposal, saying the company did not present a new means of obtaining parental consent under COPPA.  AgeCheq in the interim submitted a second proposal on October 1, 2014, which is pending consideration.

LESSONS LEARNED:  If you’re proposing a new parental consent method, make sure it is new.

  • Safe Harbor Programs.  An additional safe harbor program, kidSAFE, received approval in February 2014.  iKeepSafe, also known as the Internet Keep Safe Association, was also approved as a safe harbor program in August, 2014.  This brings the total number of approved COPPA safe harbor programs to seven.

LESSONS LEARNED:  More safe harbor programs offer more choices for companies that elect to take advantage of them, but due diligence is necessary.  Regardless of whether companies choose to join a safe harbor program, close internal attention to COPPA compliance is business-critical for kids’ companies.

Photo of Sheila Millar Sheila Millar

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has…

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has been involved in a variety of audit and compliance projects, including, among other issues, privacy and data security audits, and is experienced in providing crisis management legal support to a variety of national and international companies and associations.

Ms. Millar is a frequent speaker on regulatory and public policy matters, and has authored many articles. Ms. Millar is one of the vice chairs of the International Chamber of Commerce (ICC) Marketing and Advertising Commission, and chair of its Working Group on Sustainability, where she spearheaded the development of the ICC Framework Guides on Environmental Marketing Claims.

Ms. Millar is AV® PreeminentTM Rated by Martindale-Hubbell and for the eigth consecutive year was selected by her peers for inclusion in The Best Lawyers in America® 2018 for her work in practicing Advertising Law. She has also received the distinguished honor of Advertising Law “Lawyer of the Year” 2014 in Washington, DC by Best Lawyers®, and was awarded Advertising and Marketing Lawyer of the Year USA by Finance Monthly for their Finance Monthly Global Awards 2017.

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  • Posted in:
    Privacy and Cybersecurity
  • Blog:
    Consumer Protection Connection
  • Organization:
    Keller Heckman
  • Article: View Original Source

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