It was recently reported that mobile apps are still collecting lots of personal information about children and still may not be complying with the Children’s Online Privacy Protection Act, 15 USC 91 §6501-6506 or the Federal Trade Commission’s (“FTC’s”) Final Amended COPPA Rule (collectively, “COPPA”). See also FTC, “Complying with COPPA: Frequently Asked Questions”, July 16, 2014. App developers need to make sure their apps comply with COPPA, as the FTC is actively cracking down and there is an increased risk of a class action lawsuit based on a COPPA violation.
COMPLIANCE WITH COPPA
The primary goal of COPPA is to place parents in control over what information is collected from kids under the age of 13 (“Children”) online, while accounting for the dynamic nature of the Internet. To comply with COPPA, an app developer should follow these steps: See FTC, Children’s Online Privacy Protection Rule: A Six-Step Compliance Plan for your Business
1. Determine if COPPA Applies to Your App or Website
COPPA only applies to the following:
• Operators of commercial websites or online services that are directed to Children and collect, use, or disclose Children’s’ personal information;
• Operators of general audience websites or online services with actual knowledge that they are collecting, using or disclosing personal information from Children.
• Operators of websites or online services with actual knowledge that they are collecting, using or disclosing personal information directly from users of another website or online service directed to Children.
Several key terms need a little more explanation to appreciate the scope of COPPA:
Website or Online service: This term is defined broadly by COPPA. Aside from websites, the following are potentially within COPPA’s scope:
o Mobile apps that send or receive information online,
o Internet-enabled gaming platforms,
o Advertising networks,
o Internet-enabled location-based services, and
o Voice-over internet protocol services
Personal Information: The definition of personal information under COPPA is shockingly broad and includes any one of the following categories of information (“Personal Information”):
o First and Last Name;
o A home or physical address including street name of a city or town;
o Online contact information;
o A screen or user name that functions as online contact information;
o A telephone number;
o A social security number;
o A persistent identifier that is used to recognize a user over time and across different websites or online services;
o A photograph, video, or audio file that contains a child’s image or voice;
o Geolocation information sufficient to identify the street name and city or town name; or
o Information concerning the child or child’s parents that the operator collects online and combines with an identifier above.
Directed at Children: The FTC looks at a variety of factors to determine if an app is directed at Children :
o the subject matter of the site or service,
o audio/visual content,
o the use of animated characters,
o child-oriented activities and incentives,
o the age of models,
o the presence of child celebrities,
o ads directed to children, and
o Other reliable evidence about the age of the actual or intended audience.
Collect: Under COPPA, an app collects Personal Information if it does one of the following:
o Requests, prompts, or encourages the submission of information, even if it’s optional;
o Lets Personal Information be made publicly available (such as in a public chat), unless you take reasonable efforts to delete virtually all Personal Information before postings are made public AND delete all information from your records; or
o Passively tracks a child online.
If your app or website is covered by COPPA , move on to step 2. Congratulations if you think it is not covered! But I suggest you talk with an attorney to confirm that COPPA does not apply your app. You do not want to be wrong here!
o Types of Personal Information collected from Children;
o Ways that the Personal Information is collected (direct or indirectly through cookies);
o How Personal Information will be used (i.e. marketing, notifying contest winners, incentives, or allowing children to post information);
o Whether app discloses Personal Information to third parties, such as ad networks, and how the third parties use the information.
o Your app won’t require a child to disclose more Personal Information than reasonably necessary to participate in the app’s activity;
o They have the right to review the child’s Personal Information, can direct you to delete it, and refuse to allow any further collection or use of the child’s Personal Information;
o They can agree your app’s collection and use of their child’s Personal Information, but still forbid disclosure to third parties unless that’s part of the service (such as social networking); and
o The procedures that a parent must follow to exercise their rights.
3. Notify Parents Directly Before Collecting Personal Information from Children
COPPA requires that your app provides parents with “direct notice” before collecting Personal Information their child. The notice should be clear, easy to read and should tell parents:
• Your app collected their online contact information for the purpose of getting their consent;
• Your app wants to collect Personal Information from their child;
• The parent’s consent is required for the collection, use, and disclosure of the child’s Personal Information;
• The specific Personal Information your app wants to collect and how it might be disclosed to others;
• How the parent can give their consent; and
• If the parent does not consent within a reasonable time, you will delete the parent’s online contact information from your records and their child will not be able to use the app.
4. Get Parent’s Verifiable Consent Before Collecting Information
Your app must also obtain parent’s verifiable consent before collecting Personal Information about the child. COPPA does not specify how to obtain verifiable consent, but it is critical to use a method that is reasonably designed in light of available technology to ensure that the person giving the consent is the child’s parent.
Acceptable methods of obtaining verifiable consent include:
• Provide a consent form to be signed by the parent via U.S. mail, fax or electronically;
• Require the parent, in connection with a monetary transaction, to use a credit card, debit card, or other online payment system that provides notification of each discrete transaction to the primary account holder;
• Have the parent call a toll-free number staffed by trained personnel, or have the parent connect to trained personnel via video-conference;
• Verify the parent’s identity by checking a form of government-issued identification (such as driver’s license or passport) against databases of such information. Make sure to delete the parent’s identification info after completing the verification;
• Use the “email plus” method if you are only going to use Children’s Personal Information for internal purposes and will not be disclosing to any third party;
• Use a common consent mechanism between multiple app developers who use the same system of obtaining verifiable consent;
• Rely on an app store to gain parental consent on you app’s behalf. Note that entry of parent’s app store account number or password is not sufficient. The account number and password needs to be used with other indicia of reliability to show that it is the parent giving the consent. Also, your app still needs to meet COPPA’s other requirements (such as the direct notice requirement);
• You can also apply to the FTC for pre-approval of a new method. The FTC had already accepted some proposed new methods of verifiable consent and is regularly evaluating new ones.
There are certain circumstances under COPPA where your app can collect and use a narrow class of Personal Information without obtaining parental consent. Check out the FTC’s website for a helpful chart of these limited exceptions.
5. Respect Parents’ Ongoing Rights
Make sure to respect parent’s ongoing rights with respect to their child’s Personal Information. If a parent asks, you must:
• Give the parent a way to review the Personal Information collected about the child;
• Give the parent a way to retract their consent and refuse the further use or collection of Personal Information about the child; and
• Delete the child’s Personal Information.
Note that you must walk a fine line before disclosing Personal Information about a child. Take reasonable steps to ensure that you are dealing with a child’s parent and not some stranger. But do not make these steps so onerous that the real parent can’t find out what Personal Information your app is collecting about the child.
6. Implement Reasonable Safeguards for Children’s’ Personal Information
COPPA requires you to establish and maintain reasonable procedures to protect the confidentiality, security, and integrity of Children’s Personal Information. The first step is to limit the Personal Information collected and only collect what is absolutely necessary for your app’s services. Then take reasonable steps to only release Children’s Personal Information to third parties capable of maintaining its confidentiality, security and integrity. Obtain contractual assurances that the third parties will live up to those responsibilities. Finally, only retain the Children’s Personal Information as long as reasonably necessary, and securely dispose of as soon as you no longer have a legitimate reason for retaining it.
7. Investigate Participating in a COPPA Safe Harbor Program
As an app developer, one alternative worth investigating are FTC approved COPPA Safe Harbor Programs. COPPA Safe Harbor programs are self-regulatory guidelines developed by various industry groups that have been approved by the FTC for complying with COPPA.
You can obtain two benefits by participating in one of these programs. First, your app will be deemed compliant with COPPA so long as it follows the program’s guidelines. Second, your app will be subject to the review and disciplinary procedures outlined in the program’s guidelines instead of a formal FTC investigation and enforcement. Both are worthwhile, so you should consider participating in one of these programs.
ENFORCEMENT OF COPPA
COPPA is usually enforced by the FTC, although some state attorney generals have brought COPPA enforcement actions in the past. New Jersey, in particular, has brought and settled at least two COPPA enforcement actions against app developers.
The FTC has recently warned that mobile apps will be an enforcement priority under COPPA, and has already announced two settlements with mobile app developers:
1. Yelp: Yelp, the online review website and app, paid $450,000 to settle charges that it violated COPPA by collecting Children’s Personal Information without sufficient parental notice or consent. Yelp allegedly employed an age-screening mechanism that required a birth-date in order to register for its app, but thousands of Children were allowed to register, without notice or parental consent, after providing birth-dates that showed they were under 13.
2. TinyCo: TinyCo, the developer of Tiny Pet and other apps, paid $300,000 to settle charges that it violated COPPA by collecting Children’s email addresses without sufficient notice and parental consent. The email addresses were allegedly collected in exchange for free in-app currency.
In light of the FTC’s warnings, more enforcement actions against app developers are likely and the costs can be significant. In addition to the investigatory costs and the hit to your reputation, violators of COPPA can be penalized up to $16,000 per violation. That’s not chump change!
There is also a heightened risk of a class action lawsuit suit for failure to comply with COPPA. Usually, COPPA violations are considered unlikely contenders for class action lawsuits because COPPA does not provide a private cause of action. Without a cause of action, an individual or class cannot allege a COPPA violation as the basis for a complaint a damages. This calculation may have changed in light of a recent Connecticut Supreme Court case: Byrne v. Avery Center for Obstetrics and Gynecology, No. 18904, (Conn. Nov. 11, 2014).
In Byrne, the Court found that the Health Insurance and Portability and Accountability Act of 1996 (“HIPAA”) and the regulations of the Department of Health and Human Services (“HHS”) can “inform” the standard of care for a common law negligence action. In this case, Emily Byrne received medical care from the Avery Center (“Center”), while in a personal relationship with Andro Mendoza. Mendoza filed a paternity suit and the court issued a subpoena to the Center to appear with Byrne’s medical records. Byrne did not want the Center to release her medical records. But, the Center mailed a copy of the medical forms to the court. Byrne claimed that the disclosure of the medical forms was not done in accordance with HIPPA and that she should have been notified of the subpoena.
This decision is significant in several respects. For app developers, the most important consequence is that it provides a road map for a potential plaintiff about how to sue for a violation of COPPA. The plaintiff would need to plead a common law negligence claim related to the violation and argue that COPPA and the FTC regulations inform the duty of care applicable to these actions. Alternatively, the plaintiff could argue that the COPPA violation is an unfair and deceptive trade practice under the state’s consumer protection.
It is still unclear whether these strategies will work or whether these strategies are preempted by COPPA. I will postpone this discussion for another blog post. But if app developers continue to ignore COPPA, plaintiffs and their attorneys may start actively pursuing these cases. There is too much money potentially at stake. Stay tuned for further developments.
Thanks for reading.