Websites and online services that will be affected by the amended Children's Online Privacy Protection Rule need to prepare for the rule's July 1 implementation date after the Federal Trade Commission rejected calls by industry to push back the date.

The rule implementing the Children's Online Privacy Protection Act, also known as the COPPA Rule, imposes parental notice and consent requirements on websites and online services collecting information from children younger than 13. The FTC published an amended rule in January and set an effective date of July 1. In a statement announcing the amended rule, the commission said the changes will keep the rule in tune with developing technology, including the increasing use of social networking and mobile devices.

The amended rule's new definition of "operator" clarifies that the rule covers websites that integrate third-party services that collect personal information from visitors, such as plug-ins or advertising networks. A plug-in or ad network will also be liable under the rule when it has actual knowledge that it is collecting children's personal information.

Facebook Inc. and Twitter Inc. both opposed the expansion of the COPPA Rule to web plug-ins, arguing that they cannot reasonably be expected to know if the millions of websites using their plug-ins are directed at children because the companies do not control which sites incorporate their plug-ins.

A coalition of industry organizations—including the Direct Marketing Association and the U.S. Chamber of Commerce—wrote to the FTC April 23 and asked it to extend the implementation date of the rule to Jan. 1, 2014. The Interactive Advertising Bureau and the Application Developers Alliance made similar requests.

According to the industry organizations, the amended rule contains "unanticipated material changes." They also claimed that implementation of the amended rule would be difficult without the FTC's frequently asked questions (FAQs).

On the same day, 19 advocacy groups, including the Center for Digital Democracy, the Consumer Federation of America, and the Electronic Privacy Information Center, told the FTC that they "strongly oppose" the requests to delay the implementation date.

The FTC released its updated FAQs April 25, explaining the COPPA Rule changes. The commission released a letter May 6, in which it said it found no basis for delaying the effective date.

"Although the Rule does impose new obligations on child-directed sites and services, in selecting an effective date of July 1, 2013, the Commission determined that six months would be adequate time for such operators to assess whether third parties collect personal information through their site or service," the FTC said.

"Moreover, the Commission's application of the actual knowledge standard for third parties, guidance as to the meaning of that standard, and provision of support for internal operations for all parties will make it less burdensome for operators to comply by July 1," the commission added.

Although the FTC refused to move the implementation date, it said it would exercise discretion in enforcing the amended rule: "As with all of our enforcement activities, the Commission will exercise prosecutorial discretion in enforcing the Rule, particularly with respect to small businesses that have attempted to comply with the Rule in good faith in the early months after the Rule becomes effective."

Advocacy groups applauded the FTC's willingness to stick to its guns. "The commission's action sent an important message that protecting the privacy of children and empowering parents/caregivers is a core value which must be respected," the Center for Digital Democracy said in a May 8 statement.

Christopher G. Cwalina, a partner at Holland & Knight LLP's Washington office, offered guidance on the lack of a COPPA Rule delay in a May 7 blog post: "What does this mean in practical terms?  It means, if you are a large entity you should be well underway with making changes in relation to the new Rule's requirements.  If you are a small business, you may have more time, but you should also get cracking."

He added: "July 1 will be here very soon."

Copyright 2013, The Bureau of National Affairs, Inc.