The National Advertising Division Annual Conference kicked off with Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection, as the keynote speaker. Near the close of his remarks, Director Smith announced that the FTC will hold a workshop on the Children’s Online Privacy Protection Act (“COPPA”). For a refresher, COPPA is designed to protect the privacy of children by establishing certain requirements for websites that market to children. The FTC operates under the assumption that if children are the target demographic for a website, the website must assume that the person accessing the website is a child, and proper consent must be obtained. This assumption exists even if the website did not start with children as the target audience.
To illustrate this point, Director Smith discussed TikTok, a social media app that allows users to create and share short-form videos, which purchased Musical.ly, an app that allowed its users to post videos of themselves lip synching to songs. Musical.ly originally marketed to adults. However, as the website grew in popularity, it became clear that children used the website and that Musical.ly knew that children used the website. On February 27, 2019, the FTC brought a Complaint against Musical.ly alleging that Musical.ly collected information about children, but did not obtain the required parental consent to collect that information. In fact, child predators began using the website to obtain the location of children, though luckily, no child was hurt. As a result, TikTok agreed to pay $5.7 million to settle the FTC allegations.
Director Smith also used YouTube as an example of a website that tracked data for behavioral advertising in violation of COPPA. YouTube drops cookies on a user’s computer to track online browsing so that it can serve ads based on a user’s interests—a high performing method of advertising compared to traditional contextual advertising. YouTube started this practice generally, but as specific channels were established for children, including the creation of YouTube Kids, YouTube did not obtain the parental consent required under COPPA to continue this practice.
Director Smith made clear that it is not the FTC’s intention to discourage the YouTubers of the world from targeting kids for content. Nor does the FTC want to discourage the collection of information or hinder the ability to engage with interest-based advertising—a move that would have an extreme negative effect on content creators. But media that focuses on children has to play by different rules.
Because of the importance of protecting children, the FTC is conducting a workshop on COPPA to address how consent should be obtained in these types of situations. Director Smith also noted that the workshop will discuss compliance as it relates to image data, voice data, and education technology. The workshop will be on October 7, 2019, in Washington, D.C. There are many industries that should take note and consider participating in this workshop. One such industry is the gaming/esports industry. Because games, tournaments, and general content are (in large part) targeted to those that are protected by COPPA, compliance issues abound in the industry.
The FTC continues to demonstrate their interest in COPPA compliance, making clear that parental consent is key.
Christopher Crook is counsel in Venable LLP’s Intellectual Property Litigation Practice. Deborah Bressner is an associate in the Advertising and Marketing Practice.