Mobile Apps Developer Settles FTC Charges it Violated Children's Privacy Rule

Company Collected Kids' Information Without Their Parents' Consent

WASHINGTON, Aug. 15, 2011 /PRNewswire-USNewswire/ -- A developer of mobile applications, including children's games for the iPhone and iPod touch, will pay $50,000 to settle Federal Trade Commission charges that it violated Children's Online Privacy Protection Act (COPPA) and the FTC's COPPA Rule by illegally collecting and disclosing personal information from tens of thousands of children under age 13 without their parents' prior consent.  This is the Commission's first case involving mobile applications, known as apps.

"The FTC's COPPA Rule requires parental notice and consent before collecting children's personal information online, whether through a website or a mobile app," said  Chairman Jon Leibowitz.  "Companies must give parents the opportunity to make smart choices when it comes to their children's sharing of information on smart phones."  

The FTC's complaint charged that W3 Innovations, LLC, doing business as Broken Thumbs Apps, and company president and owner Justin Maples, develop and distribute mobile apps for the iPhone and iPod touch that allow users to play games and share information online.  According to the FTC, several of the apps, including the Emily's Girl World, Emily's Dress Up, Emily's Dress Up& Shop, and Emily's Runway High Fashion, were directed to children and were listed in the Games-Kids section of Apple, Inc.'s App Store.  

There have been more than 50,000 downloads of these apps, which allowed children to play classic games such as Cootie Catcher and Truth or Dare, and to create virtual models and design outfits.  The Emily apps encouraged children to email "Emily" their comments and submit blogs to "Emily's Blog" via email, such as "shout-outs" to friends and requests for advice.  The FTC alleges that the defendants collected and maintained thousands of email addresses from users of the Emily apps.    

In addition to collecting and maintaining children's email addresses, the FTC alleges that the defendants also allowed children to publicly post information, including personal information, on message boards.  These interactive apps send and receive information via the Internet, and are online services covered by the COPPA Rule, according to the FTC complaint.

The FTC's COPPA Rule requires that website operators notify parents and obtain their consent before they collect, use, or disclose children's personal information.  The Rule also requires that website operators post a privacy policy that is clear, understandable, and complete.

According to the complaint, the defendants did not provide notice of their information- collection practices and did not obtain verifiable parental consent before collecting and/or disclosing personal information from children.  The FTC charged that those practices violated the COPPA Rule.

In addition to imposing the $50,000 penalty, the settlement will bar the defendants from future violations of the COPPA Rule and require them to delete all personal information collected in violation of the Rule.

The FTC has a new publication Living Life Online to help tweens and teens navigate the Net safely.  

The Commission vote to authorize the staff to refer the complaint to the Department of Justice, and to approve the proposed consent decree, was 5-0.  The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the Northern District of California, in San Jose on August 12, 2011.  The proposed consent decree is subject to court approval.

NOTE:  The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent decrees have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

SOURCE Federal Trade Commission