FTC Strengthens Kids' Privacy, Gives Parents Greater Control Over Their Information By Amending Children's Online Privacy Protection Rule

Rule Being Modified to Keep Up with Changing Technology

WASHINGTON, Dec. 19, 2012 /PRNewswire-USNewswire/ -- The Federal Trade Commission adopted final amendments to the Children's Online Privacy Protection Rule that strengthen kids' privacy protections and give parents greater control over the personal information that websites and online services may collect from children under 13. 

The FTC initiated a review in 2010 to ensure that the COPPA Rule keeps up with evolving technology and changes in the way children use and access the Internet, including the increased use of mobile devices and social networking.  The updates to the COPPA Rule reflect careful consideration of the entire record of the rulemaking, which included a public roundtable and several rounds of public comments sought by the agency.

"The Commission takes seriously its mandate to protect children's online privacy in this ever-changing technological landscape," said FTC Chairman Jon Leibowitz.  "I am confident that the amendments to the COPPA Rule strike the right balance between protecting innovation that will provide rich and engaging content for children, and ensuring that parents are informed and involved in their children's online activities."

The final amendments:

• modify the list of "personal information"  that cannot be collected without parental notice and consent, clarifying that this category includes geolocation information, photographs, and videos;
• offer companies a streamlined, voluntary and transparent approval process for new ways of getting parental consent;
• close a loophole that allowed kid-directed apps and websites to permit third parties to collect personal information from children through plug-ins without parental notice and consent;
• extend coverage in some of those cases so that the third parties doing the additional collection also have to comply with COPPA;
• extend the COPPA Rule to cover persistent identifiers that can recognize users over time and across different websites or online services, such as IP addresses and mobile device IDs;
• strengthen data security protections by requiring that covered website operators and online service providers take reasonable steps to release children's personal information only to companies that are capable of keeping it secure and confidential;
• require that covered website operators adopt reasonable procedures for data retention and deletion; and
• strengthen the FTC's oversight of self-regulatory safe harbor programs.

The COPPA Rule was mandated when Congress passed the Children's Online Privacy Protection Act of 1998.  It requires that operators of websites or online services that are either directed to children under 13 or have actual knowledge that they are collecting personal information from children under 13 give notice to parents and get their verifiable consent before collecting, using, or disclosing such personal information, and keep secure the information they collect from children.  It also prohibits them from conditioning children's participation in activities on the collection of more personal information than is reasonably necessary for them to participate.  The Rule contains a "safe harbor" provision that allows industry groups or others to seek FTC approval of self-regulatory guidelines.

Definitions

The Final Rule includes these modified definitions:

• The definition of an operator has been updated to make clear that the Rule covers a child-directed site or service that integrates outside services, such as plug-ins or advertising networks, that collect personal information from its visitors.  This definition does not extend liability to platforms, such as Google Play or the App Store, when such platforms merely offer the public access to child-directed apps.
• The definition of a website or online service directed to children is expanded to include plug-ins or ad networks that have actual knowledge that they are collecting personal information through a child-directed website or online service.  In addition, in contrast to sites and services whose primary target audience is children, and who must presume all users are children, sites and services that target children only as a secondary audience or to a lesser degree may differentiate among users, and will be required to provide notice and obtain parental consent only for those users who identify themselves as being younger than 13.
• The definition of personal information now also includes geolocation information, as well as photos, videos, and audio files that contain a child's image or voice.
• The definition of personal information requiring parental notice and consent before collection now includes "persistent identifiers" that can be used to recognize users over time and across different websites or online services.  However, no parental notice and consent is required when an operator collects a persistent identifier for the sole purpose of supporting the website or online service's internal operations, such as contextual advertising, frequency capping, legal compliance, site analysis, and network communications.  Without parental consent, such information may never be used or disclosed to contact a specific individual, including through behavioral advertising, to amass a profile on a specific individual, or for any other purpose.  The final amended Rule also adds a process allowing industry to seek formal approval to add permitted activities to the definition of support for internal operations.
• The definition of collection of personal information has been changed so that operators may allow children to participate in interactive communities without parental consent, so long as the operators take reasonable measures to delete all or virtually all children's personal information before it is made public.

Parental Notice

The amended Final Rule revises the parental notice provisions to help ensure that operators' privacy policies, and the direct notices they must give parents before collecting children's personal information, are concise and timely.

Parental Consent Mechanisms

The amendments add several new methods that operators can use to obtain verifiable parental consent:  electronic scans of signed parental consent forms; video-conferencing; use of government-issued identification; and alternative payment systems, such as debit cards and electronic payment systems, provided they meet certain criteria.

The FTC considered numerous comments on the "sliding-scale mechanism of parental consent," otherwise known as "email plus."  Under this method, operators that collect children's personal information for internal use only may obtain verifiable parental consent with an e-mail from the parent, as long as the operator confirms consent by sending a delayed e-mail confirmation to the parent, or calling or sending a letter to the parent.  After considering the comments on "email plus," the FTC concluded that it remains a valued and cost-effective consent mechanism for certain operators.  The Final Rule retains email plus as an acceptable consent method for operators that collect personal information only for internal use.  

To encourage the development of new consent methods, the Commission establishes a voluntary 120-day notice and comment process so parties can seek approval of a particular consent method.  Operators participating in a Commission-approved safe-harbor program may use any consent method approved by the program.

Confidentiality and Security Requirements

The amended Final Rule requires operators to take reasonable steps to make sure that children's personal information is released only to service providers and third parties that are capable of maintaining the confidentiality, security, and integrity of such information, and who assure that they will do so.  The Rule also requires operators to retain children's personal information for only as long as is reasonably necessary, and to protect against unauthorized access or use while the information is being disposed of.

Safe Harbors

The FTC seeks to strengthen its oversight of the approved self-regulatory "safe harbor programs" by requiring them to audit their members and report annually to the Commission the aggregated results of those audits.

The Commission vote to issue the amended Final Rule was 3-1-1, with Commissioner J. Thomas Rosch abstaining.  Commissioner Maureen Ohlhausen voted no and issued a dissenting statement on the ground that she believes a core provision of the amendments exceeds the scope of the authority granted by Congress in COPPA.  She stated that, regardless of policy justifications, she cannot support extending COPPA's  statutory definition of "operator" to impose obligations on websites or online services that do not collect personal information from children or have access to or control of such information collected by a third-party.

The final amended Rule will be published in a notice in the Federal Register.  The amendments to the Final Rule will go into effect on July 1, 2013.

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SOURCE Federal Trade Commission