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Security and trust: The backbone of doing business over the internet

The US Federal Trade Commission issued new rules governing the collection of children's personal information by Webmasters yesterday, as required by the Child Online Protection Act (COPA). Kids' Web sites will now be required to obtain parental consent before gathering demographic data on children below age 13. Numerous kids' Web sites function as little more than demographics clearinghouses, offering free entertainment and online amusements in exchange for the registration data which they analyse and sell to advertising firms. Advertising front groups have lobbied hard on Capitol Hill against parental verification requirements, chiefly because setting them up in any effective manner would likely push the cost of the data to a point exceeding its value, or at least close enough to it to make the whole operation more trouble than its worth. Advertising is a $600 billion a year operation in the US, with Web pitches representing roughly one per cent of that. Kids, whose entire commercial identities are overwhelmingly that of care-free consumers, represent a special target. A great deal of money and effort goes into marketing to children, whose incomes, strictly speaking, are entirely disposable. Separating them from their allowances has become something of a science unto itself. Privacy groups have been equally vocal in registering their contempt for the commercial use of kids' personal data, especially where very young ones, who may not have a clue what the information will be used for, are concerned. The FTC listened, and thought, and developed a scaled approach which would burden most heavily those firms gathering the most detailed data for sale to a third-party, and imposing the lightest burden on those that keep non-specific data in house. At the upper end, a fax, a signed letter (not in crayon), or a credit card might be required before a child could register on a site. At the lower extreme, a simple email and a follow-up phone call from a friend with a deep voice would do the trick. Early soundings from both industry flacks and privacy advocates have been remarkably positive. It may well be that vagueness in the regulations is producing considerable optimism on both sides, which can only be crushed by bitter experience when they take effect in April. ®

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