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FTC retains children’s online privacy protection rule

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The Federal Trade Commission (FTC) has decided to retain a rule implementing the Children's Online Privacy Protection Act (COPPA), which demands that website operators obtain parental consent to their collection of children’s personal information.

The COPPA Rule imposes certain requirements on website or online service operators whose services are directed at children under 13 years old, as well as operators who have 'actual knowledge' that they are collecting personal information from children under 13.

Among other things, it requires that these website operators post privacy policies, provide parental notice and obtain verifiable consent from a parent or guardian before collecting personal information from children.

It takes a sliding scale approach to parental consent, defining the measures required to obtain verifiable parental consent according to how the website operator intends to use the information it collects.

This means that if the operator intends to disclose information collected from children to the public or a third party, it must use more reliable methods for obtaining verifiable parental consent. In contrast, if the operator intends to use information from children for its internal use only, then it also can obtain verifiable parental consent by an email from the parent if it also confirms the consent by sending a message to the parent by delayed email, fax, or telephone.

When COPPA was introduced it required the FTC to review the rule within five years of its effective date. The watchdog has now done so, deciding that the rule can be retained exactly as it is.

The FTC based its determination partly on a positive response to a public consultation on the implementation of the rule. This revealed that, in general, COPPA has succeeded in providing greater protection to children’s personal information online, that there is a continuing need for the rule, and that the rule should be retained.

In particular, many respondents thought the rule provided website operators with a clear set of standards to follow and said operators have received few, if any, complaints from parents about the standards and how they are implemented.

In the opinion of many respondents, operators have responded to the rule by limiting the personal information they collect from children, and the rule’s requirements have struck an appropriate balance between protecting children’s personal information online and preserving children’s ability to access content.

Respondents also said operators have been successful in maintaining popular and viable websites in the five years since the rule was implemented.

With regard to the sliding scale for parental approval, respondents did not find that screening for visitors' age on general audience websites had become a problem, and they supported the FTC's continued approval of using a credit card with a transaction as a method of obtaining verifiable parental consent to the collection of children's personal information.

The FTC is therefore making no changes to the rule’s substantive provisions, and will shortly submit a comprehensive assessment of COPPA's implementation to Congress.

See: COPPA Rule Retention decision (50 page/282KB PDF).

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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