By: Michael Blumenthal
Online platforms and intellectual property creators face increased legal risk from content accessed by children due to stronger enforcement of the Children’s Online Privacy Protection Act (“COPPA”) and a newly proposed COPPA amendment that would further strengthen those regulations. The current version of COPPA prohibits, without parental consent, the tracking and collection of personal information from children online. The act requires websites to comply with a series of regulations, including posting compliant parental notices on its platform. Violations of COPPA are unfair or deceptive practices under Section 18(a)(1)(B) of the Federal Trade Commission (“FTC”) Act.
On September 4th 2019, the FTC came to a $170 million settlement with YouTube in a significant escalation in the enforcement of COPPA. YouTube’s violation of COPPA stemmed from its practice of using cookies for targeted advertising on child-friendly videos without proper parental consent. The settlement prompted YouTube to change several of its business practices, by removing targeted ads from all content aimed at children and shifting the responsibility for complying with COPPA on individual video creators. YouTube is not alone , the FTC has enforced large fines have also against Yelp, TikTok, among others.
The increased enforcement of regulations impacts individual content creators. Unlike platform providers, content creators are not equipped to navigate the COPPA regulations, nor are they in a position to influence YouTube policies. The financial risk to content creators might be very high, as much as $42,000 per video, and the FTC can hold content creators directly liable under the existing law.
Congress is now considering an amendment that would strengthen COPPA called the Preventing Real Online Threats Endangering Children Today (“PROTECT”) Kids Act, co-sponsored by Bobby Rush (D-Ill.) and Tim Walberg (R-Mich.). The proposed amendment would raise the age of parental consent protections from thirteen to sixteen, add rules to address geolocation and the collection of biometric information, and expand the scope of COPPA beyond websites to include all phone and tablet apps . The proposed amendment signals a further escalation of regulatory enforcement, creating new legal liabilities.
COPPA enforcement protects the privacy of children online, but also exposes any platform provider or content creator attracting children in their audience to significant fines from the FTC. Platform providers with access to legal counsel, and with discretion over how user data is collected, can make the required investments in compliance. Conversely, individual content creators without access to legal advice, and without the capacity to control the data collection practices of the platforms they rely on, are particularly vulnerable to substantial fines.
15 U.S.C. §§ 6501-6508 (1998).
H.R. 5573, 116th Cong. (2020).
See 15 U.S.C. § 6501 (collecting personal information includes: first and last name, address, telephone number, persistent identifier such as IP address, geolocation information, images or audio that would identify a child).
See id.(providing required direct notice to parents).
15 U.S.C. § 57a(a)(1)(B).
See Allison Fitzpatrick, FTC Settlement Over COPPA Will Change YouTube’s Biz Model, Law360(Sept. 19, 2019, 1:28 PM) https://www.law360.com/articles/1200705/ftc-settlement-over-coppa-will-change-youtube-s-biz-model- (noting the penalty is three times larger than any privacy penalty Google has faced, and thirty times larger than any civil penalty the FTC has issued).
See id.(defining videos “directed at children” to include videos containing animated characters and children’s toys).
See id.(announcing, inter alia, that YouTube would turn off tracking on children’s content, require video makers to identify children’s content, and use artificial intelligence tools to enforce the new policy); see also Susan Wojcicki, An Update on Kids and Data Protection on YouTube, YouTube Official Blog, (Sept. 4, 2019), https://youtube.googleblog.com/2019/09/an-update-on-kids.html.
See Fitzpatrick, supra note 7 (enforcing monetary fines against TikTok for $5.7 million); see also Press Release, Federal Trade Commission, Yelp, TinyCo Settle FTC Charges Their Apps Improperly Collected Children’s Personal Information (Sept. 17, 2014) https://www.ftc.gov/news-events/press-releases/2014/09/yelp-tinyco-settle-ftc-charges-their-apps-improperly-collected.
See Makena Kelly & Julia Alexander, YouTube’s New Kids’ Content System Has Creators Scrambling, The Verge(Nov. 13, 2019, 3:06 PM), https://www.theverge.com/2019/11/13/20963459/youtube-google-coppa-ftc-fine-settlement-youtubers-new-rules (“Creators are being held directly responsible by the FTC, . . . [t]hat is frightening”).
See id.(declining to provide their content creators with guidance on video labeling, YouTube suggests that content creators consult an attorney to determine if their content would be subject to COPPA enforcement); see also Press Release, Federal Trade Commission, YouTube Channel Owners: Is Your Content Directed to Children? (Nov. 22, 2019) https://www.ftc.gov/news-events/blogs/business-blog/2019/11/youtube-channel-owners-your-content-directed-children.
See Kelly & Alexander, supranote 12 (speculating that FTC enforcement is likely to be selective and heavy-handed, focusing on high-profile cases and pursuing maximum fines in order to compensate for their limited manpower).
Press Release, U.S. Rep. Bobby L. Rush, Rush, Walberg Introduce Bipartisan Legislation to Protect Children’s Online Privacy (Jan. 9, 2020), https://rush.house.gov/media-center/press-releases/rush-walberg-introduce-bipartisan-legislation-to-protect-children-s.
H.R. 5573, 116th Cong. (2020).
See H.R. 5573, 116th Cong. (2020) (expanding COPPA to include, for example, biometric information, precise geolocation and apps for mobile phones and tablets).
SeeKelly & Alexander, supranote 12.