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By Jimmy H. Koo
Viacom Inc. allegedly allowed mobile gaming application developers to embed codes to collect data about children’s online activities for advertising and other commercial purposes, according to a class action complaint ( Rushing v. Viacom, Inc. , N.D. Cal., No. 3:17-cv-04492, class complaint filed 8/7/17 ).
Companies attached to mobile apps targeted at children under the age of 13 may see similar complaints asserting violations of federal children’s privacy law —not as an independent basis to sue but to support state privacy law claims.
The Aug. 7 complaint against Viacom, filed in the U.S. District Court for the Northern District of California, also named Upsight Inc. and Unity Technologies SF, companies that provided their proprietary codes for use in Viacom’s gaming apps, including the one at issue: “Llama Spit Spit.”
The same plaintiffs recently filed a similar class action complaint against Walt Disney Co., Upsight, and Unity over the alleged data-collection practices of the “Disney Princess Palace Pets” mobile gaming app. The case complaint against Disney also named technology company Kochava Inc.
Disney spokeswoman Heather Hust Rivera told Bloomberg BNA that the company denies the allegations and has “strict data collection and use policies for Disney apps created for children and families.”
According to Bloomberg data, Viacom had more than $4.7 billion in advertising revenue out of $12.5 billion in total revenue in 2016. Viacom has a market cap of $12.7 billion, the data shows.
Viacom didn’t immediately return Bloomberg BNA’s request for comments.
The complaints against Viacom and Disney alleged multistate common law intrusion upon seclusion and California constitutional right to privacy claims. The complaints also alleged that the companies’ practices ran afoul of the Children’s Online Privacy Protection Act (COPPA).
COPPA doesn’t allow individuals to sue, leaving that power to the Federal Trade Commission and state attorneys general. However, when the users at issue are children, class plaintiffs may argue that alleged violations of statute, while not providing them a direct claim, bolster their other privacy claims.
Los Angeles-based app attorney Jovan Johnson of Johnson & Moo, Attorneys at Law told Bloomberg BNA Aug. 8 that although COPPA doesn’t provide a private right of action, COPPA-related allegations in the complaint will put Viacom in a “very uncomfortable place.” The FTC will pay attention to these types of complaints and may “follow through on their own accord,” Johnson said.
Gerard M. Stegmaier, Washington-based partner in the intellectual property, tech, and data group at Reed Smith LLP, told Bloomberg BNA Aug. 8 that plaintiffs often look for a “creative toehold of federal law that may have been violated” to file class action complaints. The pattern of using a “broader scare tactic” has been seen before, he said. Citing an April 2017 study by the U.S. Chamber of Commerce, Stegmaier noted that plaintiffs often try to use “fears to try to extract settlements” from companies.
The chamber’s study also noted that only a few law firms—including Lieff Cabraser Heimann & Bernstein LLP, which represents the plaintiffs in the cases against Disney and Viacom—"bring a large proportion” of these types of cases.
However, Johnson said that, as an attorney representing companies, it is “encouraging to see these mega entities under the spotlight.” He said he hopes such complaints will “provide context or maybe even an alert” for similar companies.
Lieff Cabraser and Carney Bates & Pulliam PLLC filed the complaint on behalf of the proposed plaintiff class. The law firm also filed the complaint against Disney. Lieff Cabraser and Carney Bates didn’t immediately respond to a Bloomberg BNA request for comment.
Counsel for the defendants couldn’t be immediately identified.
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Full text of the complaint is available at http://src.bna.com/rty.
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