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For more than a decade, companies in the United States operating websites that collect data from children have been required to comply with the Children's Online Privacy Protection Act (COPPA).

At the time COPPA was implemented, the internet ecosystem was far less mature, and the law didn't cover all of the parties that today frequently collect data from children. So yesterday, the FTC published a proposal (PDF) with the intent of modifying COPPA to ensure that parties not currently governed by COPPA's rules are covered.

Specifically, the FTC "proposes modifying the definition of both operator and website or online service directed to children to allocate and clarify the responsibilities under COPPA when independent entities or third parties, e.g., advertising networks or downloadable software kits (“plug-ins”), collect information from users through child-directed sites and services." As the FTC sees it, "Sites and services whose content is directed to children, and who permit others to collect personal information from their child visitors, benefit from that collection and thus should be responsible under COPPA for providing notice to and obtaining consent from parents."

Expanding COPPA's rules to cover third parties like ad networks will add clarity where it is currently lacking. As MediaPost's Wendy Davis points out, the FTC recently closed an investigation of social gaming platform provider OpenFeint, which allows game developers to easily integrate social features into their games. Some alleged that the company was violating COPPA because it collects data on apps targeted towards children, but the FTC did not take action because it felt COPPA was "ambiguous" as to whether a company like OpenFeint was required to adhere to the law.

An expansion of COPPA may not be welcome

Needless to say, clarity is probably a good thing here, but that doesn't mean that an expansion of COPPA will be warmly greeted by the third parties which may be covered by it going forward. This, of course, includes companies that run ad networks, like Google. If covered under COPPA, behaviorally targeted ads would effectively be off limits for under-13s.

Others are worried too. Facebook, as Adweek's Katy Bachman notes, is concerned about any regulations which may restrict the use of its service and features, such as the now-ubiquitous 'Like' button. In response to the FTC's latest proposal, a Facebook spokesman wrote "We look forward to evaluating its most recent proposal" and noted that the social network forbids children under the age of 13 from using its service. Of course, there are still millions of under-13s on Facebook regardless.

The big question now for companies potentially impacted by COPPA: is this just the start of a more aggressive push to regulate how companies collect and use data from children online? A Do Not Track Kids Act that has been proposed would go much further than the proposed COPPA modifications, and would be sure to create more substantial concerns for online service providers and marketers.

Patricio Robles

Published 2 August, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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