FTC Vigilant on Children’s Privacy – Rejects Proposal for Collecting Verifiable Parental Consent Under COPPA

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On November 12, 2013, the Federal Trade Commission (“FTC”), in a 4-0 vote, denied AssertID’s application for approval of a proposed verifiable parental consent (“VPC”) method under the Children’s Online Privacy Protection Rule (“COPPA”).  Under the FTC’s COPPA rule, covered online websites and services must obtain “verifiable parental consent” (“VPC”) before collecting personal information from children under 13.  The agency’s revised COPPA rule became effective in July; among other changes, it expanded the categories that can constitute “personal information.” The FTC’s COPPA rule sets forth several acceptable methods of obtaining parental consent.  Notably, the rule also allows parties to seek FTC approval of other VPC methods.

The FTC’s approval process allows organizations to present innovative VPC methods, thereby permitting flexibility and taking into account new technologies, while still ensuring that parents provide consent on behalf of their children as required under COPPA.  The FTC requires that applicants seeking approval for a unique VPC provide:  (1) a detailed description of the proposed parental consent method; and (2) an analysis of how the method is reasonably calculated in light of available technology, to ensure that the person providing consent is the child’s parent.

The FTC reviewed AssertID’s proposed VPC method following a public comment period.  AssertID’s product, “ConsentID,” would ask a parent’s “friends” on a social network to verify the identity of the parent and the existence of the parent-child relationship (“social-graph verification”).  The FTC concluded that “ConsentID” did not meet the criteria to ensure that the person providing consent is the child’s parent.  The agency determined that it is premature to approve ConsentID, since AssertID did not present sufficient research or marketplace evidence demonstrating the efficacy of social-graph verification.

The FTC also questioned the efficacy of social-graph efficacy in the “real world.”  The agency noted that relying upon social network users to confirm parental consent posed many problems including the fact that many profiles are fabricated (noting that Facebook’s SEC 10-Q indicates it has approximately 83 million fake accounts).  In conclusion, the agency found that “identity verification via social-graph is an emerging technology and further research, development, and implementation is necessary to demonstrate that it is sufficiently reliable to verify that individuals are parents authorized to consent to the collection of children’s personal information.”

The FTC has approved and denied other VPCs.  The agency’s denial of AsssertID’s application signals that while the FTC encourages the uses of new technologies to obtain VPC under COPPA, it will review new methods carefully, mandating research results and demonstrable success in a “real world” scenario rather than just a beta test.   Website operators collecting personal information of children under 13 (and “personal information” now includes geolocation information, as well as photos, videos, and audio files that contain a child’s image or voice) should review their COPPA compliance, including their methods of VPC.  The FTC continues to be especially vigilant in protecting certain categories of personal information, including children’s information, financial information, and health information.