Does the FTC take the Children’s Online Privacy Protection Act seriously? Most commentators believe enforcement of the law is low on the “to do” list at the FTC. Right next to cleaning the inside of the copy machine. On September 3, 2015, the FTC issued what can only be categorized as a bizarre press release bolstering this view. In the release, the FTC appears to tout the failure of app companies to comply with COPPA as a positive development.
2013 – A New Age
According to the FTC, the summer of 2013 was to be a watershed moment for COPPA enforcement. After multiple hearings, the Commission issued the first new regulations for COPPA compliance in more than a decade. Speeches and press releases suggested the FTC was finally going to focus on making sure online service providers, with a particular emphasis on apps, were complying with COPPA and the new COPPA Rule. Those of us who work in the COPPA arena warned clients that if the FTC spent only half the time and resources devoted to litigating disputes such as whether POM Wonderful advertising is deceptive, the potential exposure to enforcement actions would increase dramatically.
Unfortunately, the FTC proved once again to be the little boy who cried wolf. Enforcement actions have been nearly non-existent. Sure, Yelp was given a public finger waving, but only because of a technical failure of the age gateway used in the company’s app. A Chinese app maker was also warned about a failure to comply and rumors of investigative letters being issued to other outfits swirled. However, two years after the supposed new emphasis on COPPA, the FTC enforcement action tally for apps stands at one known case with one official warning.
September 3, 2015, Press Release
That’s a 45 percent compliance rate.
The 45 percent figure must be viewed for what it is – appalling – right? The FTC appears to take just the opposite view. The Commission notes the 45 percent figure is an improvement over the 20 percent rate found in a similar study conducted in 2012. As noted in the press release:
We don’t know for certain why there has been an increase in easy-to-locate privacy policies since our last survey, but a few factors may have contributed to this welcome development.
Welcome development? App companies are failing…but not as badly as they were three years ago? This is progress? Imagine the press release when apps reach a 50 percent compliance rate!
On August 13, 2015, the FTC issued guidance indicating the Commission feels it has the authority to prosecute claims for “unfair competition.” The first case should clearly be FTC v. FTC. The Commissions lack of interest in COPPA creates unfair competition in the mobile app niche. While responsible app companies allocate significant resources to comply with COPPA while at the same time forgoing numerous revenue channels thanks to COPPA restrictions, competitors spend those same resources to generate revenues knowing full well the likelihood of an FTC enforcement action is tiny.
Well done, FTC. Well done.
Is there any chance of the FTC finally rising from the couch on the issue of COPPA compliance like a fraternity member blindly searching for aspirin and Gatorade the morning after the opening game of the college football season? Probably not if the press release issued by the FTC is anything to work off:
Whatever the reasons for the increase in direct links to kids’ app privacy policies, it’s a step in the right direction. That said, a significant portion of kids’ apps still leave parents in the dark about the data collected about their children – so there’s more work to be done. Furthermore, for improved disclosures to have any value, they must accurately reflect what the app is up to. We’ll dive deeper into that issue in upcoming blog posts.
Oh. More blog posts. Perhaps the next should read:
COPPA Compliance – Just Kidding
You know that COPPA law we’ve been threatening to enforce the last 17 years? Yeah, that’s not really going to happen. Sure, we’ll go after low hanging fruit every once in a while, but that’s about it. Hey, ever tried Vodka-POM Wonderful? Deceptive advertising? Nah, deceptively delicious!“
Richard A. Chapo, Esq.