Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC argues COPPA does not create agency relationships, or bind parents to arbitration provisions, (Aug 20, 2025)

By Rebecca Mayo, J.D.

Nothing in COPPA’s text would automatically create an agency relationship between parents and school districts entering into contracts with educational technology providers.

The FTC has filed an amicus brief with the Ninth Circuit Court of Appeals in a case brought by parents of Kansas schoolchildren, asserting that neither the Children’s Online Privacy Protection Act (COPPA), 15 U.S.C. §§ 6501, nor the FTC’s COPPA Rule is concerned with any contractual terms beyond those directly affecting the collection, use, and disclosure of the personal data of children under the age of 13. The FTC submitted the brief to clarify that nothing in COPPA’s text, structure, legislative history, or implementing regulations supported a claim that COPPA creates an agency relationship between parents and schools for the purposes of binding parents to the terms of agreements between educational technology providers and those schools (Shanahan v. IXL Learning, Inc., No. 24-6985 (9th Cir. Aug. 13, 2025)).

Parents whose children attend Kansas public schools that use IXL Learning, Inc. educational technology products as part of their curriculum brought a putative class action claiming that IXL “collected and monetized the data of millions of school-age children who used the IXL platform without parental consent. IXL moved to compel the parents to bring their claims in arbitration pursuant to the terms of IXL’s service agreements with the school districts, arguing that the parents were bound by those agreements by virtue of an asserted agency relationship between the parents and the schools, purportedly created by the operation of COPPA.

In 2024, the FTC filed an earlier amicus brief in the case before the federal district court, asserting that COPPA could not bind the parents to the arbitration agreement because it was outside the scope of COPPA. The district court denied the motion holding that neither COPPA nor common-law agency principles supported the contention that the school districts acted as agents of the school children’s parents when those school districts contracted with educational vendors like IXL. IXL appealed and again, the FTC filed an amicus brief.

COPPA. Congress enacted COPPA to protect the online privacy of children under the age of 13—by ensuring that parents control the collection, use, and disclosure of their children’s personal information. The statute generally prohibits the operators of covered websites or other online services from collecting, using, or disclosing the personal information of children under the age of 13 without first providing adequate notice of the type, use, and potential disclosure of the information to be collected, obtaining verifiable consent of the children’s parents, and establishing reasonable measures to ensure the security of the collected data.

Agency relationship. IXL quotes from a passage in the Statement of Basis and Purpose (SBP) accompanying the COPPA Rule when first promulgated, which states that “the Rule does not preclude schools from acting as intermediaries between operators and parents in the notice and consent process, or from serving as the parents’ agent in the process.” The FTC asserted that this discussion did not suggest that COPPA or the COPPA Rule can create such an agency relationship by operation of law or otherwise, and that the text of the statute and the rule make clear that they have no such effect.

IXL further suggests that the agency relationship extends to all aspects of any agreement between IXL and the school, thereby binding parents to terms such as arbitration that go well beyond the scope of COPPA and the FTC’s implementing regulations. The FTC asserted that this selective quotation ignored the context of the quoted sentence and distorted the meaning of the FTC’s language. The FTC agreed that the SBP discussion “notes” that the COPPA Rule “does not preclude” schools from acting as agents of the parents, but this accurate description of the regulation’s limited reach did not suggest that the statute or the rule creates an agency relationship—let alone one of potentially unlimited scope. According to the FTC, there is no basis in the statute, the regulation, or the FTC’s explanation of the COPPA Rule to conclude that any agency relationship between schools and parents could exist automatically or by operation of law.

Scope. The FTC again asserted that neither COPPA nor the COPPA Rule nor the FTC’s rulemaking discussions could be read to create an agency relationship between parents and the school districts. However, if the court were to conclude otherwise, the FTC argued that the scope of any such federally created agency should be strictly limited to the parental notice-and-consent process addressed by COPPA and should not be extending to any other contractual terms, including arbitration. The FTC urged the court to consider the purpose of COPPA, which is to ensure parental control over the collection, use and disclosure of their children’s personal information, in determining the proper scope of any such agency.

To bind a principle, the agent must be acting on the principle’s behalf, within the scope of authority as agent. Thus, according to the FTC, any agency ostensibly created under COPPA would necessarily be limited to COPPA’s notice-and-consent requirements, as that is the only potentially relevant aspect of IXL’s agreement with the schools.

While IXL argued that such an agency should be extended, under general agency law principles, to cover IXL’s arbitration agreements with the school districts, the FTC argued that such an extension would go well beyond the scope of COPPA’s provisions concerning children’s online privacy. Thus, according to the FTC, even if COPPA could be understood as the source of an agency relationship between schools and parents, there is simply nothing in COPPA, the COPPA Rule, the FTC’s SBP discussion of rulemaking comments on which IXL relies, or the FTC’s enforcement history that would remotely support the proposition that schools—and, by extension, their contracting educational technology providers—can bind parents to contractual terms, including arbitration, that are utterly divorced from the COPPA notice-and-consent process.

The Case is No. 24-6985.

Attorneys: William Andrew Liddell (EdTech Law Center, PLLC) for Gretchen Shanahan. David P. Fuad (Orrick, Herrington & Sutcliffe, LLP) for IXL Learning, Inc.

Companies: IXL Learning, Inc.

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