As children's activities on the Internet have expanded, many states and the federal government have enacted legislation to regulate such activities and other "smart" children’s products—products that collect, transmit or store electronic data. One such law, the Children’s Online Privacy Protection Act (COPPA), was enacted by Congress with the goal of giving parents the ability to know about, understand, consent to, and monitor the type of information collected from their children online. Specifically, COPPA prohibits certain operators of websites and online services from collecting, using, or disclosing personal information from children under the age of 13 without first obtaining verifiable parental consent. The Federal Trade Commission (FTC) promulgated regulations, known as the COPPA Rule (the Rule), to implement and enforce the provisions of COPPA.

Recognizing an increase in the number and type of smart children’s products, we previously published guidance on data privacy compliance as it relates to smart children’s products, including an article discussing the interplay of federal and state data privacy laws and smart children’s products and, as relevant to this update, an article exploring the applicability of COPPA to mobile apps.

COPPA Compliance

As we noted in our article regarding the applicability of COPPA to mobile apps, the FTC, through its many enforcement actions and other published guidance, has signaled its commitment to enforcing COPPA and ensuring the protection of children’s data privacy online.

Multiple companies subject to COPPA took notice of the FTC's eye towards enforcement, and in an effort to ensure their compliance with the Rule, requested that the FTC exempt the collection of audio files from COPPA's verifiable parental consent requirement under certain circumstances. In response, the FTC recently published additional guidance to clarify its position on the applicability of COPPA to the collection and use of voice recordings.

COPPA and Voice Recordings

Under COPPA, audio files that contain a child’s voice are considered "personal information," the collection, use and disclosure of which first requires direct notice to and verifiable consent from parents. So long as the information collected is "personal information" as defined by the Rule, operators must provide parents direct notice and obtain consent before collecting such information from children under the age of 13. Except for certain limited exceptions, the Rule does not differentiate among the various purposes for the collection, use or disclosure of personal information. Thus, the collection of an audio file from a child under the age of 13, even when the voice is being used solely as a replacement for written words (e.g., to convert voice to text in order to perform a search), would technically require verifiable parental consent.

The problem noted by many companies, and now recognized by the FTC, is the use of an audio file containing a child's voice may serve valuable functions that would otherwise be limited by strict enforcement of the requirement to obtain verifiable parental consent before collection. For example, verbal commands may be a necessity for certain children who are unable to write or are disabled.

The FTC, acknowledging the importance of the collection of audio files in certain circumstances, as well as the limited risk that a child may be contacted when the file is obtained for such a specific purpose and is then immediately deleted, crafted a new enforcement policy to address the issue. As noted in its guidance, the FTC announced that it will not enforce the parental consent requirement when collecting an audio file containing a child’s voice solely as a replacement for written words, particularly in the context of converting the speech to perform a search or to fulfill a command. An operator using this exception may only hold the file for a brief time solely for that specific purpose and must provide notice of such collection and its deletion policy in its required privacy policy. The FTC also noted that the policy is not applicable when the operator requests other personal information from the child via voice, such as the child’s name or address, or if the operator makes any other use of the audio file before the file is destroyed.

COPPA and Interconnected Apps

Companies collecting personal information from children should keep in mind that absent an exception, the FTC remains diligent in enforcing the Rule as to parental consent. For example, on January 8, 2018, the FTC announced a $650,000 settlement with VTech Electronics Limited and its U.S. subsidiary related to connected children's toys. VTech's Kid Connect app allowed children to send text messages and audio files to contacts approved by parents. While VTech obtained information about children from parents directly using its Learning Lodge Navigator online platform, VTech failed to obtain parental consent for information collected by the interconnected Kid Connect app and did not link its privacy policy in each area where the app collected personal information from children. An unauthorized intrusion into VTech's network brought this COPAA violation to light. VTech also did not encrypt personal information in violation of its stated privacy policy and correspondingly, the FTC Act.

Impressions

In its new guidance on voice recordings, the FTC acknowledged that the collection of personal information to perform valuable functions that may be necessary for the proper use of online services, at least in certain circumstances, may outweigh strict enforcement of COPPA. Companies looking to rely on the new guidance in collecting audio files prior to obtaining parental consent must still be cognizant of the need to comply with all of the requirements of the limited exception or risk an FTC enforcement action. The exception is only applicable so long as (1) the audio file is collected for the limited purpose of replacing written words and is used for no other purpose, (2) other personal information of the child is not requested, (3) the file is deleted immediately after the transcription, and (4) the operator provides clear notice of its collection, use and destruction of audio files in its privacy policy.

In light of the new guidance and the recent VTech enforcement action, companies should make sure that their COPPA compliance program evaluates the purpose, storage and use of collected information. Those evaluations should be used to develop verifiable parental consent mechanisms that apply to all connected technologies that can be used to collect information from children under the age of 13, including websites, mobile apps and toys that use the Internet to collect and transmit information.