Three Major App Settlements Address Alleged COPPA Violations

Three separate settlements seeking approval before the Northern District of California may set a precedent for app makers dealing with children’s data. All three settlements concern the Children’s Online Privacy Protection Act (COPPA), legislation that imposes legal restrictions on how app makers and other companies treat the data collected from apps and websites targeted at children. Depending on the outcome of these settlements, it could seriously impact how apps handle children’s personal data going forward.

What is COPPA?

COPPA, originally passed in 1998, is a federal law that regulates how operators of websites and other services directed at children under the age of 13 handle the data they collect from their users. Additionally, the law also affects websites who knowingly collect data from children under 13 years old, even if they do not specifically target that age group. In effect, it imposes restrictions on companies that collect this data to ensure that children’s personal data is not misused or unintentionally disclosed, which could imperil the well-being of the children whose data is misused or compromised.

What are these settlements?

The three COPPA settlements being handled relate to cases known as the Kiloo Action, the Disney Action, and the Viacom action.

  • Disney is a multinational corporation headquartered in Burbank, CA, which, among other things, produces digital entertainment targeted at children under the age of 13, including various video games and television shows.
  • Viacom is also a multinational corporation that produces digital entertainment through its various subsidiaries, the most significant of which for this case is Nickelodeon, which produces television and games targeted at children.
  • Kiloo is a Dutch app manufacturer which primarily produces games for smart phones and other mobile devices, several of which are targeted at children. While not a household name like Viacom or Disney, its products are popular worldwide, having been downloaded more than 1 billion times.

In all three cases, the plaintiffs are seeking injunctive relief, but no compensatory damages for harm they allegedly suffered due to data that was collected through their products, in violation of COPPA. While the specifics of each case differ somewhat, due to distinctions in how each company collected data from their users, all three allege that the companies collected children’s personal data through deceptive or misleading practices, resulting in them suffering violations of their personal privacy. The lawsuits focus on the use of so-called “behavioral advertising,” which targets ads at users based on their browsing history, which they allege is a violation of COPPA.

Why is this important?

Given the prevalence of behavioral advertising, these lawsuits could have a substantial impact on not only how these companies handle children’s personal data, but also how other companies handle data collected from apps targeted at children and mixed audiences. The injunctive relief sought by the parties in all three actions would potentially restrict them from putting behavioral advertising in apps targeted at children, and restrict the sharing of data across products which might result in the sharing of data protected by COPPA. Without behavioral advertising, these companies’ ability to target children via advertising could be severely restricted. And with the issue of consumer data protection only becoming more important, these settlements could set the groundwork for how the courts handle similar violations in the future.

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