The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee

FTC Settles with Kids Social Networking Site for COPPA Violations

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 On January 30, 2008, the FTC settled charges with Industrious Kid, Inc. ("Industrious"), in the United States District Court in the Northern District of California, for alleged violations of the Children’s Online Privacy Protection Act and the FTC’s implementing rule (collectively, "COPPA").  Industrious operates a website and blog hosting service on the Internet, located at www.imbee.com, that is directed to children and that provides children with messaging, blogging and other social networking activities.  According to the the FTC’s complaint, Industrious allegedly promoted imbee.com as a "free, secure social networking and blogging destination specifically designed for kids ages 8 to 14," as "purposely designed to ensure the greatest level of safety and satisfaction for young members," and as "safer than other social networking sites."  However, in reality (according to the FTC’s allegations), the web site was collecting and using personally identifiable information from children under the age of 13 in violation of COPPA.  The FTC’s complaint alleged that the web site enabled over 10,500 children to create user accounts (in which the children were able to provide their full names, dates of birth, e-mail addresses, parent email addresses, gender, user names and passwords), prior to obtaining prior parental consent as required by COPPA.  Additionally, the web site’s privacy policy allegedly failed to include certain required disclosures, as did the e-mail notice sent to parents via e-mail. For example, the privacy policy allegedly did not provide sufficient information on the web site’s information use and disclosure practices, and the e-mail notice to parents allegedly did not disclose what information the web site had already collected from the children nor did it inform the parents of their right to review and have their child’s information deleted.  The FTC’s consent order calls for civil penalties of $130,000, and requires, among other things, that Industrious delete all personally identifiable information that they had collected from children in violation of COPPA and post a link on its web site to various COPPA-related materials and guidance (including a link to the FTC’s web site).  To view the FTC’s Press Release regarding this settlement, click here
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Author: ABA Antitrust

Learn more about the ABA Section of Antitrust Law: http://ambar.org/antitrust

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