The legal community often views the Children’s Online Privacy Protect Act as an unenforced law given the relative lack of action undertaken by the FTC over the years. This view changed a bit in 2014 with a few noticeable enforcement actions, and the question is now whether regulatory enforcement will pick up in 2015.
COPPA Rule – 1 Year Old
The new COPPA Rule finalized in July of 2013 represented the first major COPPA development in more than a decade. Given the changes in the regulations, most legal commentators felt the FTC would hold off for some time to allow companies to adapt. In fact, the FTC allowed a full year pass before moving to enforce the new Rule.
The last half of 2014 saw the FTC live up to its word. The Agency filed an enforcement action against Yelp based on a rather odd defective age gateway issue that resulted in children under 13 using the app instead of being rejected by the gateway. The FTC then hit TinyCo with a COPPA enforcement action related to its collection of personal information from children under 13 within free games it offered to such kids. Both cases were high profile and consisted of clear COPPA violations. Unsurprisingly, both companies settled quickly.
The question is whether these two high profile cases will be the last we will see out of the FTC for some time? It is doubtful. In fact, 2015 may prove to be one of the more robust years for COPPA enforcement actions as a push is made to enforce the new COPPA Rule.
Apps, Apps, Apps
Mobile apps, as we see them now, are a relatively new phenomenon. These apps are also notorious for having insufficient legal documentation and for failing to comply with laws such as COPPA. To be frank, one has to wonder how many app developers are even aware of COPPA despite the FTC issuing warnings to the industry.
The result of all this is there are thousands of “sitting ducks” the FTC can pursue enforcement actions against in the app industry. The field is so ripe for enforcement that the FTC can pick and choose targets to highlight certain aspects of the new COPPA Rule.
There will be FTC COPPA enforcement actions filed against apps in 2015. Many of them. The only limit will be the total resources the FTC is willing to put towards the campaign.
State Enforcement Actions
While most people are fully aware that the FTC can file enforcement actions for COPPA violations, fewer realize the law also authorizes states to do the same. State enforcement actions tend to be politicized events to an extent [“I protected kids online. Elect me governor!], but they do happen with three states successfully bringing actions to date.
2015 could see the number of state enforcement actions increase dramatically. Again, the target will be apps. Prosecutors prefer “sure things” when they can find them. There are so many apps that are not COPPA compliant that an aspiring politician could make a career out of going after them. You can be sure a number of such people will try to.
2014 was a year for businesses to adapt to the new COPPA Rule issued in 2013. The adaptation period has ended, and we are now transitioning into a year where the new Rule will be enforced aggressively. The prudent business owner will make sure all their online properties are COPPA compliant and documentation is available to defend any enforcement action filed by the FTC or a state.
Richard A. Chapo, Esq.