Children's privacy is so sensitive that all it took for kids game Mobbles to pre-emptively pull its app last December was a complaint filed with the Federal Trade Commission by a privacy group. Four months later, the app, which had been accused of collecting email addresses without parental permission, has yet to return.
Mobbles' disappearance could have something to do with the FTC’s comprehensive overhaul of privacy rules affecting digital companies targeting kids, which will go into effect July 1. Just what exactly those changes to the Children’s Online Privacy Protection Act (Coppa) are is anybody’s guess. The FTC promises to clarify the updates in the form of FAQs "sometime this month," leaving companies with only 10 weeks to get in line.
That's why the Interactive Advertising Bureau today filed a request with the FTC to delay implementation by six months. "It’s a complete makeover and that will take time," said Mike Zaneis, the IAB’s svp, general counsel.
In Coppa 1.0, compliance was limited to websites directed at children under 13; they had to get parents' permission before collecting or sharing a child’s email, address or phone. The new rules extend to device IDs, location data, video and photos. Plus, sites and apps are now liable for the practices of third-party vendors, such as ad networks, audience metrics and plug-ins.
"They'll need time to determine if they can bear the burden of a strict liability regime or convert to a pay-for-content model," Zaneis noted.
"Until we know how to execute, it's hard to know whether you can include certain functionality," said Morgan Reed, executive director for the Association for Competitive Technology, which represents app developers.
"The revised rules add factors for determining whether a site is directed to children, such as music content or celebrities that appeal to kids," said Reed Freeman Jr., a partner with Morrison Foerster, which represents online publishers and app developers.
Even if the FTC grants the extra time, the digital kids market undoubtably will be changed. The new regs could cause some sites and apps to drastically reduce functionality or interactivity, force others behind paywalls or drive some right out of business. "The rule is a market-altering event. It will result in less content directed to kids," Freeman predicted.
Added Reed: "It won't be the end of the world, but there will be a lot of fallout at first."
Katy Bachman, Adweek. April 14, 2013
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