Antitrust Law Daily Wrap Up, PRIVACY NEWS: Children’s app developers settle FTC charges of COPPA violations, (Dec 17, 2015)
Organizations Mentioned:Bureau of Consumer Protection | LAI Systems, LLC | Retro Dreamer
By Linda O’Brien, J.D., LL.M.
Two application developers will pay a combined $360,000 in civil penalties as part of settlements with the FTC over charges they violated the Children’s Online Privacy Protection Act (COPPA), the agency announced today.
In the complaint against LAI Systems, LLC (U.S. v. LAI Systems, LLC, File No. 142-3261), the FTC alleged that the company created a number of apps directed to children, including My Cake Shop, My Pizza Shop, Hair Salon Makeover, Friday Night Makeover, Marley the Talking Dog, and Animal Sounds. According to the FTC’s complaint, the defendant allowed third-party advertisers to collect personal information from children in the form of persistent identifiers. Defendant failed to inform the ad networks that the apps were directed to children and did not provide notice or get consent from children’s parents for collecting and using the information.
The stipulated order with LAI Systems prohibits the company from further violations of the COPPA Rule, and requires the company to pay a $60,000 civil penalty.
In the FTC complaint against Retro Dreamer (U.S. v. Retro Dreamer, File No. 142-3262) and its principals Craig Sharpe and Gavin Bowman, the agency alleged that the company created a number of apps targeted to children, including Ice Cream Jump, Happy Pudding Jump, Ice Cream Drop, Sneezies, Wash the Dishes, Cat Basket, and Tappy Pop.
The defendants in this case, according to the complaint, allowed third-party advertisers to collect children’s personal information through the apps. One advertising network over the course of 2013 and 2014 specifically warned the defendants about the obligations of the revised COPPA Rule, and also told the defendants that certain of their apps appeared to be targeted to children under the age of 13.
The settlement with Retro Dreamer, Sharpe, and Bowman prohibits the defendants from further violations of the COPPA Rule, and requires the defendants to pay a $300,000 civil penalty.
The complaints and proposed stipulated orders were filed in the U.S. District Court for the Central District of California.
“It’s vital that companies understand the rules of the road when it comes to handling children’s personal information online,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “These cases make it clear that we’re closely watching this space to ensure children’s privacy online is being protected.”
Companies: LAI Systems, LLC; Retro Dreamer
News: Privacy ConsumerProtection FederalTradeCommissionNews