Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
TRUSTe Inc. has settled allegations that it failed to properly verify that customer websites aimed at children didn’t run third party software to track users, New York Attorney General Eric T. Schneiderman (D) announced April 6.
The enforcement action—the first to target a privacy compliance company over children’s privacy, according to Schneiderman—demonstrates that companies must make sure their privacy compliance partners are up-to-code. It may also undercut arguments that privacy self-regulation by companies catering to children is a legitimate alternative to government oversight and enforcement of the Children’s Online Privacy Protection Act (COPPA), which prohibits unauthorized collection of personal data of children under age 13.
Privacy compliance is an important concern for businesses that must adhere to a growing patchwork of laws and regulations designed to protect consumers’ personal information from unauthorized access. Companies like TRUSTe fill the need by ensuring their clients abide by required privacy and data security measures.
Under the no-fault consent settlement, TRUSTe agreed to pay $100,000 and “adopt new measures to strengthen its privacy assessments,” Schneiderman said
In September 2016, the N.Y. Attorney General’s Office settled directly with websites that improperly tracked children, including Mattel Corp., Viacom Inc., Hasbro Inc. and JumpStart Games Inc. Hasbro escaped a financial penalty because it had relied on TRUSTe to ensure its compliance with federal law. TRUSTe was certified by the Federal Trade Commission as a self-regulatory safe harbor, meaning companies could use its COPPA services to demonstrate compliance and limit liability.
Gary A. Kibel, privacy and data security partner at David & Gilbert LLP in New York, told Bloomberg BNA April 6 that the enforcement action against a “privacy certification organization raises the significance of the action because industry is supportive of self-regulation and it relies on effective enforcement.” The New York AG enforcement action “seems to imply that TRUSTe wasn’t meeting the standards of its own program,” he said.
A TRUSTe spokesman told Bloomberg BNA April 6 that the New York AG enforcement action was based on concerns “from a few years ago,” and that the company has worked with the FTC and state regulators to address those concerns and update their “Children’s Privacy Certification program.” The company stands by the “quality and integrity” of their certification programs, including its European Union-U.S. Privacy Shield data transfer compliance verification program, the spokesman said.
A Hasbro spokeswoman told Bloomberg BNA April 6 that the company “ended its relationship with TRUSTe in 2014" and that it applauds the enforcement action. Hasbro is “deeply committed to protecting the privacy” of its users and aims to “promote responsible practices to ensure consumers'—and especially children’s—privacy comes first,” the spokeswoman said.
TRUSTe “failed to meet its obligations to keep children safe from the prying eyes of online trackers and its customers,” Schneiderman said. Specifically, TRUSTe didn’t run scans for third-party tracking technology on some of its “customers’ children webpages,” the settlement announcement said. The actions of TRUSTe “allowed COPPA violations to continue on children’s websites,” it said.
This isn’t TRUSTe’s first privacy-related run in with regulators. It previously settled with the FTC in November 2014 over allegations that it deceived consumers about its privacy seal program by claiming that it conducts annual re-certifications, when it failed to do so, and misrepresenting its status as a nonprofit entity. It paid $200,000 under that settlement.
The FTC didn’t respond to Bloomberg BNA’s email seeking comment on the New York settlement.
To contact the reporter on this story: Daniel R. Stoller in Washington at dStoller@bna.com
To contact the editor responsible for this story: Donald Aplin at email@example.com
Text of the settlement order is available at http://src.bna.com/nIT.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)