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Financial Services Law Insights and Observations

States recommend FTC “significantly” strengthen COPPA

Privacy/Cyber Risk & Data Security COPPA State Attorney General FTC Agency Rule-Making & Guidance

Privacy, Cyber Risk & Data Security

On December 9, a coalition of 25 state attorneys general responded to the FTC’s request for comments on a wide range of issues related to the Children’s Online Privacy Protection Rule (COPPA). As previously covered by InfoBytes, the FTC released a notice in July seeking comments on all major provisions of COPPA, including definitions, notice and parental consent requirements, exceptions to verifiable parental consent, and the safe harbor provision. In response the AGs strongly recommend that, while the FTC should “significantly” strengthen COPPA, any changes must be flexible and evolve to meet a rapidly-changing data landscape’s needs. Specifically, the AGs state that COPPA’s definition of “web site or online service directed to children,” as well as its definition of an “operator,” need to be modified, as many first-party platforms embed third parties who allegedly engage in the majority of the privacy-invasive online tracking. By expanding the definition of an operator, the AGs claim that COPPA would require compliance by companies that use and profit from the data as well as companies that collect the data. According to the AGs, COPPA, places a lower burden on third-parties and requires them to be bound by the rule only when they have “actual knowledge” that they are tracking children, even though these entities “are arguably as well-positioned as the operators of the websites and online services to know that they are tracking and monitoring children.”

The AGs also believe that the prong that “recognizes the child-directed nature of the content” should be strengthened, because companies that are able to identify and target consumers through sophisticated algorithms are often disincentivized to use the information to affirmatively identify child-directed websites or other online services. Among other things, the AGs also discuss the need for specifying the appropriate methods used for determining a user’s age, expanding COPPA to protect minors’ biometric data, and providing illustrative security requirements.

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