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Citing violations of the Children's Online Privacy Protection Act (COPPA), on Monday the Federal Trade Commission announced a $50,000 settlement with Broken Thumbs Apps, a company that creates and markets iPhone and iPad games to children.
The app maker was accused of collecting children's e-mail addresses, names, and other personal information without parental consent.
Can such a legal entanglement happen to you?
Passed in 1998, COPPA is an attempt to prevent the collection, use and disclosure of a minor's personal information without parental consent.
It applies to those who operate an online service or website directed to children, as well as to operators of general sites and services that have actual knowledge that they are collecting personal information from a child.
COPPA requires these operators to post a notice of what is being collected and how it is used, as well as to obtain verifiable parental consent for collection, use and disclosure.
There are also a host of rules promulgated by the FTC that deal with safe harbors, services directed at schools, and parental access.
Besides not informing parents that it was collecting the names of children or acquiring verified parental consent, Ars Technica reports that Broken Thumbs broke the above disclosure rules by using the information for marketing purposes, likely increasing the settlement price.
In light of this incident, it may be a good time for those of you who rule websites or online services to discuss your COPPA obligations with an attorney so that you don't meet the same fate as did Broken Thumbs Apps.