The grand realm of the internet has regularly created new challenges throughout the years. The latest trend in online fiascos concerns the use of tracking devices on websites. Over the years, social media, such as the world-renowned Facebook, have been collecting data from hundreds of individuals.1 Although this has been a major issue for some time, a dire concern evolves from websites that particularly target children. On September 13, 2016, NY Attorney General Eric Schneiderman announced settlements against four industry giants over their failure to regulate the online tracking of children.2 Viacom, Mattel, and various others are now required to pay “a combined $835,000 in penalties and implement ‘significant’ reforms to the way they monitor third-party tracking technologies on their sites.”3 This will spark a major movement in the use and misuse of online tracking.
Websites tracking children are subject to the Federal Trade Commission’s ‘Children’s Online Privacy Protection Act’ (COPPA) which provides, in relevant part, that “it is unlawful for an operator of a website or online service directed to children, or any operator that has actual knowledge that it is collecting personal information from a child, to collect personal information from a child in a manner that violates the regulations prescribed under subsection (b).”4 Subsection b requires various disclosures which outline, in a conspicuous manner, that the website is collecting information.5 In 2013, the FTC amended COPPA which subjected website owners to nothing less than strict liability for “the collection, use and disclosure of personal information by independent third parties that are allowed to plug into their sites.”6 Any website operators found to violate COPPA will be subject to fines by the FTC. The NY Attorney General has construed the regulation in a way that coincides with the views of the FTC, which would mean full cooperation between the Federal Government and the States on this subject.
This regulation has been in effect since 1998, however, States have been actively looking into this issue for the past few years. Texas, New Jersey, and Maryland have been the few states so far who have led the charge in filing suits under COPPA.7 The action in NY is a large-scale movement toward the regulation and protection of children online. With the shift to mobile games becoming an even larger threat, it is of particular important that other States follow suit. Children’s privacy should be a top priority not only for the individual States but for the Federal government as well. The broad expansions to COPPA add various loopholes and difficulties to Website operators, who rely on website views in order to create revenue. Fortunately, there are FTC approved safe-harbor programs which monitor compliance with the statute, making it easier for websites to make changes without any lawsuits against them. The FTC sponsored compliance programs are not in any way cheap. However, compared to the $500,000 that Viacom paid and the $250,000 penalty imposed upon Mattel; Hasbro, who had a safe-harbor program in place paid nothing in the action against them.8 These safe-harbor programs should be a major incentive for companies with websites geared toward children to ensure that those websites are not only complying with the statute, but also providing a safe environment for children to enjoy themselves. Surely, in the next year, massive changes will take place and States will begin to regulate websites aimed at children more effectively.
- Kim Komando, Facebook Is Watching and Tracking You More than You Probably Realize, USA Today (Mar. 29, 2016, 8:38 PM) http://www.usatoday.com/story/tech/columnist/komando/2016/03/18/facebook-watching-and-tracking-you-more-than-you-realize/81803796.
- Allison Grande, NY’s Child-Tracking Action Bolsters States’ Privacy Creds, Law 360 (Sept. 14, 2016, 11:07 PM) https://www.law360.com/articles/840079.
- 15 U.S.C.S. §6502(a)(1) (1998).
- 15 U.S.C.S. §6502(b) (1998).
- Grande, supra at 2.
- Id.; See also Texas AG Is the First State to Target Websites for COPPA Violations, Loeb & Loeb, LLC (Dec. 2007) http://www.loeb.com/articles-clientalertsreports-20071219-texasagisfirststatetotargetwebsitesforcoppaviolations.
- Grande, supra at 3.