By: Linda L. Goodman
TinyCo, the developer of child-directed apps including Tiny Pets, Tiny Zoo, Tiny Village, Tiny Monsters, and Mermaid Resort will pay a civil penalty in the sum of $300,000 to the Federal Trade Commission (“FTC”) for failure to comply with Childrens Online Privacy Protection Act (“COPPA”). The San-Francisco-based company has just settled a FTC lawsuit alleging violation of COPPA. Clearly targeting children, TinyCo gave the apps for free and they have been downloaded millions of times. But children can make in app purchases to enhance the game and they encouraged children to provide them with their email addresses but failed to obtain the required parental permission.
COPPA requires operators of commercial websites or online services directed to children under 13 to – among other things:
- Post on their sites clear, understandable privacy policies explaining their information practices;
- Provide direct notification to parents about the information they collect from kids and how it’s used and disclosed; and
- Get verifiable parental consent before collecting, using, or disclosing that data.
According to the complaint, TinyCo failed to abide by COPPA and instead attempted to skirt the law by offering in game bonuses. For example, next to an email submission box was an enticing offer: “Get 5 Acorns for adding your email!” The practical effect was to illegally collect children’s addresses without their parents’ permission in exchange for game goodies. Users of other TinyCo apps were encouraged to turn over their email “for information and promotions,” a practice the FTC also says violated COPPA. As a result of these enticements, TinyCo collected tens of thousands of email addresses.
In addition to a $300,000 civil penalty, the settlement mandates a major COPPA clean-up and the destruction of all information TinyCo collected from kids under 13. Notably, they will be telling the FTC all about their apps and their business for the next 10 years.
Does COPPA apply to your company? The Rule covers the operators of two kinds of sites and services: (1) those directed to children under 13; and (2) those geared to general audiences when they have “actual knowledge” they’re collecting information from kids in that age group.
To determine if a Website is directed to children under the age of 13, the FTC looks to subject matter, visual content, use of animated characters or child-oriented activities and incentives, music or other audio content, age of models, presence of child celebrities or celebrities who appeal to children, language or other characteristics of the Website or online service, as well as whether advertising promoting or appearing on the Website or online service is directed to children.
In this case, the FTC sited the colorful characters and locales of TinyCo apps, including “adorable animals,” “lovable cubbies,” “magical monsters,” baby dinosaurs, zoos, treehouses, and a “resort” inspired by the Little Mermaid fairy tale. The complaint also cites the simple language of the games, which would be easy for kids under 13 to understand.
In addition, the FTC claimed that TinyCo knew that kids were using their apps because parents of young children had contacted them to complain. TinyCo apparently ignored the complaints, which only drew greater ire from the FTC.
So the two lessons of this case? Determine if your Website falls under the requirements of COPPA and pay attention to consumer complaints!
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This article is a publication of The Goodman Law Firm and is intended to provide information on recent legal developments. This article does not create an attorney-client relationship, nor should it be construed as legal advice or an opinion on specific situations. This may constitute “Attorney Advertising” under the Rules of Professional Conduct and under the law of other jurisdictions.
Linda L. Goodman is the founder of The Goodman Law Firm, concentrating its practice in internet business and law. Her firm’s clients include Advertisers, Affiliates, Affiliate Networks, and ISP’s.
© 2014 TGLF, A.P.C.