FTC Collects $35,000 in COPPA Settlement

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The Federal Trade Commission yesterday said that it reached a $35,000 settlement with The Ohio Art Co. involving violations of the Children's Online Privacy Protection Act.


The Ohio Art Co. operates a Web site at www.etch-a-sketch.com with an "Etchy's Birthday Club" section aimed at children younger than 13. COPPA requires Web sites that collect information from children younger than 13 to obtain parental consent and to post privacy policies.


In its complaint, the FTC accused The Ohio Art Co. of collecting personally identifiable information from children younger than 13 without parental consent. The FTC also alleged that the site collected more information from children than was necessary and failed to provide parents access to the personal information collected.


In addition to the $35,000 settlement, future data collection by The Ohio Art Co. must comply with COPPA.


The settlement was the sixth civil penalty case brought by the FTC since COPPA took effect April 21, 2000.


Other Web sites such as jollytime.com, lisafrank.com, girlslife.com, bigmailbox.com and insidetheweb.com settled similar charges with the FTC earlier this year and last year.


The FTC also announced other COPPA-related news yesterday.


Results of an April 2001 COPPA compliance survey of 144 children's Web sites showed that almost 90 percent of Web sites collecting personal information from children had privacy policies as opposed to 24 percent in a 1998 survey.


Only half of the sites surveyed, however, were in total compliance with COPPA, which could lead to more legal action by the FTC. It sent letters to more than 50 children's Web site operators warning them of COPPA violations.


Finally, the FTC extended the sliding scale mechanism for obtaining parental consent under COPPA until April 21, 2005. It was to have expired April 21 of this year. The rule allows Web sites that only use children's personal information internally to obtain parental consent via e-mail.


The rule will be reviewed again in 2005.


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