A Blog About FTC regulations and happenings
FTC Settles with Gaming App for False Representations about Children’s Privacy
On July 6, 2020, the Federal Trade Commission announced a settlement with gaming app developer Miniclip S.A. The settlement addresses allegations that Miniclip falsely claimed membership in a Children’s Online Privacy Protection Act (COPPA) safe harbor program for the last several years.
Miniclip boasts more than 1 billion downloads of its 45 “high-quality mobile games” (such as Agar.io and Soccer Stars) and a further catalogue of 1,000 online games. Many of these games are directed toward young children, which is where the COPPA concerns come in. Broadly speaking, COPPA is a federal statute intended to ensure that children under 13 do not share their personal information online without the express approval of their parents. The FTC, which enforces COPPA, helps to manage compliance with the help of several FTC-approved self-regulatory safe harbor programs (currently, there are seven; these programs generally provide the same or greater protections than COPPA and ensure a level of program monitoring). If a company is a member of one of these safe harbor programs, the FTC deems the organization compliant with COPPA.
According to the terms of the settlement, Miniclip may no longer misrepresent membership in any government, self-regulatory, or standard-setting organization. It must also provide the FTC certain corporate details on business ownership and compliance measures and it must maintain accounting, personnel, and compliance records for ten years. The settlement terms do not seem onerous and do not contain monetary penalties. But nor does the FTC allege any actual violations of COPPA. The agency only alleges misrepresentation about participation in a safe harbor program.
We do know from recent announcements from Secretary of State Mike Pompeo and FBI Director Christopher Wray that the U.S. is red flagging Chinese companies for cybersecurity threats, intellectual property theft, and data co-opting. Pompeo even discussed banning Tik Tok from the U.S. (we’ve talked about Tik Tok’s children’s privacy problems in the past). We suggest companies that have Chinese ownership or affiliation or those that are considering taking investors from China take extra steps to ensure they dot their I’s and cross their T’s, as we may be entering an era of specialized legal and regulatory scrutiny of regulated organizations’ Chinese corporate relations.