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Is Your Web Site COPPA Compliant?
In 1998, Congress passed the Children's Online Privacy Protection Act (COPPA), broadly expanding the Federal Trade Commission's (FTC) enforcement powers in the Internet arena. Since then, states and the FTC have become more active in regulating the collection, use and security of consumer's personal information generally. However, the protection of children's personal information remains a top FTC enforcement goal, and the commission has become more aggressive in enforcement of COPPA each year. Companies that fail to proactively act to ensure COPPA compliance do so at the risk of seven-figure penalties.
COPPA's goal is to prevent Web sites from collecting information about children under the age of 13 without informed parental consent. When Congress passed COPPA, it required the FTC to provide guidelines (Rules) to advise Web site operators on how to avoid a COPPA violation. The Rules apply a sliding scale of parental consent requirements if a Web site is 'directed at children under 13 years old' or the Web site operators have knowledge that children under 13 are submitting personal information. In March 2006, the FTC completed a review of the Rule and announced that it would be retained unchanged.
Web sites that violate COPPA are subject to substantial penalties, which have increased over recent years. For example, in 2003, Mrs. Fields and Hershey's paid the then highest-to-date civil penalties of $100,000 and $85,000, respectively, because they collected personal information from children under the age of 13 without obtaining informed parental consent. Three years later, in September 2006, Xanga.com, a popular social networking Web site, agreed to pay a $1 million penalty for maintaining a user registration system that permitted users under the age of 13 to submit personal information, finding that certain registration submissions established knowledge that restricted information was being improperly collected.
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