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Dec. 18 — Without admitting or denying any wrongdoing, application developers LAI Systems LLC and Retro Dreamer agreed Dec. 17 to pay a total of $360,000 in civil penalties to settle Federal Trade Commission allegations that they violated the Children's Online Privacy Protection Act.
According to the FTC, these cases were the first in which the commission alleged that companies allowed advertisers to use “persistent identifiers”—pieces of data that are tied to a particular user or device, such as cookies—to deliver advertisements to children.
Persistent identifiers were among the categories added to the definition of personal information when the COPPA Rule was updated in 2013.
According to the FTC's complaint, filed in the U.S. District Court for the Central District of California, LAI Systems created multiple apps targeted at children, including My Pizza Shop, Hair Salon Makeover and My Cake Shop. LAI Systems allegedly allowed third-party advertisers to obtain children's personal information in the form of persistent identifiers. LAI allegedly failed to provide or get consent from children's parents to collect and use the information. To settle the FTC's allegations, LAI Systems agreed to pay a $60,000 penalty.
In its complaint against Retro Dreamer and its principals, the commission alleged that the company created a number of apps targeted to children, including Ice Cream Jump, Happy Pudding Jump and Ice Cream Drop. The defendants allegedly allowed third party advertisers to collect children's personal information. To settle the allegations, Retro Dreamer agreed to pay a $300,000 penalty.
Under the terms of the settlements, both companies also agreed to be enjoined from future violations of the COPPA Rule.
In November, the FTC unanimously approved a proposal to verify parental consent for their children to access online services by “validating a parent's face against an online presentation of verified photo identification”.
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Full text of the stipulated order against LAI Systems is available at http://www.bloomberglaw.com/public/document/United_States_of_America_v_LAI_Systems_LLC_Docket_No_215cv09691_C.
Full text of the stipulated order against Retro Dreamer is available at http://www.bloomberglaw.com/public/document/United_States_of_America_v_Retro_Dreamer_et_al_Docket_No_515cv025.
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