FTC Announces COPPA Privacy Settlements

Association Law and Policy, June 2001


Editor's note: In the October 2000 issue of CampLine, ACA published information for camp directors concerning this federal law. If you operate a web site and gather information from children, please review the information on this law from the earlier CampLine issue.

The Federal Trade Commission has taken its first enforcement action since the enactment of the Children's Online Privacy Protection Act (COPPA).

According to an April 19 news release, FTC charged Baltimore-based Monarch Services Inc., and Girls Life Inc., operators of www.girlslife.com; Los Angeles-based Bigmailbox.com and Nolan Quan, operators of www.bigmailbox.com; and Looksmart Ltd., operator of www.insidetheweb.com (which has since closed its doors), with illegally collecting personally identifying information from children under 13 without parental consent.

The settlement calls for the companies to pay $100,000 in penalties and to change their online information-collection practices.

COPPA, enacted a little more than one year ago, is probably the most comprehensive federal regulation on information collected by commercial Web site operators. It applies to Web sites and online services directed at children under 13, as well as to general audience sites that "knowingly collect personal information from children." FTC requires that Web sites post a privacy policy, notify parents of their information-collection practices, and get verifiable parental consent before they collect children's personal information or share that information with others.

FTC stated that the three sites worked in tandem to offer children free e-mail accounts and access to online message boards. FTC also alleged that each company collected information (including home addresses and telephone numbers) without obtaining the prior consent of parents and without posting privacy policies on their sites.

The settlement requires each of the sites to delete all personal information collected from children since the law became effective, and also requires that the Web sites link to a page on FTC's site that will detail COPPA for consumers.

The FTC also announced that the Entertainment Software Rating Board has been approved as an industry self-regulatory "safe harbor" program under COPPA. The guidelines created by ESRB are thus deemed to comply with COPPA.

Copyright American Society of Association Executives, Association Law and Policy. Reprinted by permission.


Originally published in the 2001 Fall issue of The CampLine.