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    Monday, August 6, 2012

    FTC Seeks to Clarify When Plug-Ins and Ad Networks Are Responsible Under COPPA Rule

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    The Federal Trade Commission Aug. 1 proposed additional modifications to the Children's Online Privacy Protection Act (COPPA) Rule, which were formally published Aug. 6, in a move that would clarify that plug-ins and advertising networks that collect personal information from children through another's site or service are covered by the rule.

    The COPPA Rule requires an "operator of a website or online service directed to children" to give notice to parents and obtain parental consent prior to collecting, using, or disclosing the personal information of children under 13 years of age.

    But what exactly is a "website or online service directed to children"?  For instance, would a plug-in that offers social networking features through mobile applications, but does not knowingly collect information from children, fall under the rule?  The rule as currently drafted is unclear.

    The FTC staff admitted as much in a recent closing letter to online social gaming network OpenFeint Inc.  The company operated a mobile app plug-in that enabled users to engage with its social networking features. Although the staff concluded that OpenFeint may constitute a covered operator under the COPPA Rule, they declined to pursue an enforcement action against the company.

    "The staff recognizes, however, that the Rule's current definition of website or online service directed to children may be ambiguous as to an operator in OpenFeint's position," the letter said. "The staff also recognizes the many policy implications regarding the potential responsibility of software 'plug-ins' under COPPA . . . ."

    Based on the comments the FTC received since it proposed to amend the COPPA Rule in September 2011, the commission has now proposed to modify the definition of "website or online service directed to children" to clarify that a plug-in or ad network that "knows or has reason to know" that it is collecting children's personal information through another's website is "directed to children."

    The FTC also sought to tweak other COPPA Rule definitions in its recent proposal, including the definitions of "operator" and "personal information."

    Along with the other changes the commission proposed in September–the first the FTC has sought since the rule took effect in 2000–the FTC is attempting to keep pace with rapid changes in online and mobile technologies. The agency's first review of the rule in 2005 yielded no changes.

    Copyright 2012, The Bureau of National Affairs, Inc.

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