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FTC Fines Yelp, TinyCo For Violating Underage Children’s Privacy

By Paul Liu
Monday, November 17th, 2014

The feds are tightening the noose on the companies that violate children’s privacy on the internet. In a significant move, Federal Trade Commission (FTC) has fined Yelp and TinyCo for collecting personal data from underage children without the consent of their parents. While Yelp has agreed to pay $450,000, TinyCo will pay $300,000 to settle the matter. The news assumes significance because the offending companies were fined for breaching COPPA (Children’s Online Privacy Protection Act); the act meant to protect children’s privacy on the web.

What Is Children’s Online Privacy Protection Act?

COPPA is a federal law that governs the collection of information from children under 13. The law has issued well-defined guidelines on what kind of information must be included in a website’s privacy policy, when and how the operators must taken consent from the parents as well as the responsibilities of the portals to safeguard children’s information and privacy. The law clearly states that children under 13 must explicitly seek their parents’ consent while giving out personal information (name, email address, phone numbers etc.). Since the compliance of the law requires a huge amount of effort and manpower, many operators have decided to bar underage children from using their websites altogether.

While most operators have implemented COPPA for their sites, many of them have failed to do so for their mobile apps. This is clearly dangerous for children since more and more kids are now spending their time on their mobile devices. The Feds move of fining the companies is clearly aimed at plugging the mobile loophole. In the past, the agency has also targeted Google, Amazon and Apple for allowing children to make in-app purchases and revealing their personal information without the permission of their parents.

Why Were Yelp And TinyCo Fined?

Yelp was fined because it collected names, location, email addresses and phone numbers from people without verifying their age. While the mobile app of the company did ask for user’s date of birth, it did nothing to prevent underage children from revealing their information. On its part, Yelp has blamed a bug in the mobile app for the security glitch and has stated that only a miniscule percentage its users happened to be children. The company was also directed to delete personal data that it collected from underage children.

TinyCo’s case is different because unlike Yelp, its apps were clearly targeted towards children. TinyCo is the company behind gaming apps like Tiny Monsters, Tiny Pets and Tiny Zoo that have been downloaded more than 30 million times. However, the company clearly violated COPPA since it collected personal information from its users (mostly children) without seeking the consent of their parents or guardians.

The huge penalties levied by Feds clearly show that the government is serious about protecting children’s privacy on the internet and is committed towards making the web a safer place for the children. While most parents are naturally worried about the safety of their children’s data and photos, they can now breathe a little easy since the FTC has demonstrated that it is willing to take serious steps to protect underage children on the internet.