App Developers will pay $360,000 in Fines for Violating Children's Online Privacy Rights

App Developers will pay $360,000 in Fines for Violating Children's Online Privacy Rights
Image: Pixabay
December 17, 2015

Two app developers will pay a combined $360,000 in civil penalties for violating a federal law protecting children's online privacy.

The cases against LAI Systems and Retro Dreamer are the first in which the Federal Trade Commission (FTC) alleges that companies allowed advertisers to use persistent identifiers to serve advertising to children. This form of personal information were added to the Children's Online Privacy Protection Act (COPPA) in 2013.

Persistent identifiers are pieces of data that are tied to a particular user or device.

In its complaint against LAI Systems, the FTC alleged that the company created a number of apps directed to children, including My Cake Shop, My Pizza Shop, Hair Salon Makeover, Friday Night Makeover, Marley the Talking Dog and Animal Sounds. According to the FTC's complaint, the defendant allowed third-party advertisers to collect personal information from children in the form of persistent identifiers.

The company failed to inform the ad networks that the apps were directed to children and did not provide notice or get consent from children's parents for collecting and using the information.

The settlement with LAI Systems prohibits the company from further violations of the COPPA Rule, and requires the company to pay a $60,000 civil penalty.

In its complaint against Retro Dreamer, and its principals, Craig E. Sharpe and Gavin S. Bowman, the FTC alleged that the company created a number of apps targeted to children, including Ice Cream Jump, Happy Pudding Jump, Ice Cream Drop, Sneezies, Wash the Dishes, Cat Basket and Tappy Pop.

The defendants in this case, according to the complaint, allowed third-party advertisers to collect children's personal information through the apps. One advertising network over the course of 2013 and 2014 specifically warned the defendants about the obligations of the revised COPPA Rule, and also told the defendants that their apps appeared to be targeted to children under the age of 13.

The settlement with Retro Dreamer, Sharpe and Bowman prohibits the defendants from further violations of the COPPA Rule, and requires the defendants to pay a $300,000 civil penalty.

Get Connected with Consumer Connections

Stay up-to-date about issues that really matter! Get the Consumer Connections newsletter!

We're committed to providing you with information you need to make you a better, more informed consumer. Whether it's a vehicle recall, a product recall, or a new scam, we feature it in Consumer Connections.

So why not give it a try? Go on. All of your friends are doing it. It's completely free and comes just once a week.

Hoping to have a baby? You may be less hopeful when you find out that it will cost almost a quarter of a million dollars to raise a child.According to the Department of Agriculture's (USDA) estimates, it will cost parents $233,610—nearly as much as $14,000 per year---to bring up a child from birth through the age of 17.

A baby's skin is much thinner than that of older children and adults, and it absorbs the active, chemical ingredients in sunscreen more easily. This means that an infant's exposure to the chemicals in sunscreens is much greater, increasing the risk of an allergic reaction or inflammation.

It'll only be a minute, you say. You crack the windows and lock the car leaving your sleeping infant cozy in her car seat. The problem is that it's never just a minute. It's always longer than that and it only takes 10 minutes for your car to heat up to dangerous temperatures—potentially killing or permanently injuring your child.

The U.S. Food and Drug Administration (FDA) is warning the public to keep these products—which contain the active ingredients tetrahydrozoline, oxymetazoline, or naphazoline (known as imidazoline derivatives)—out of the reach of children at all times. The products are sold under various brand names such as Visine, Dristan and Mucinex, as well as in generic and store brands.