This article has been updated with comment from W3 Innovations.
Developer W3 Innovations has agreed to a $50,000 fine to settle Federal Trade Commission charges that its apps violated the Children’s Online Privacy Protection Act (COPPA).
The settlement marks the FTC’s first case involving smartphone apps.
The FTC alleged that W3, doing business as Broken Thumbs Apps, illegally collected and disclosed personal information about “tens of thousands” of children under age 13 without their parents’ prior consent.
The agency reports that several of the company’s Emily apps, including Emily’s Girl World, Emily’s Dress Up, Emily’s Dress Up & Shop and Emily’s Runway High Fashion, encouraged children to e-mail the fictional Emily with comments and blog posts.
The FTC alleges that the defendants collected and maintained more than 30,000 email addresses from users of the Emily apps and allowed children to publicly post information on message boards, including personal information.
Justin Maples, owner of W3, said in an e-mail response that the company holds itself to the “highest ethical standards.”
“Our sole purpose in collecting email data was to improve the user experience with our apps; we never used any email address for marketing purposes or sold it to other firms,” he said.
Maples maintains that the company’s COPPA violations were “inadvertent” and that it has put new policies in place to prevent it from collecting e-mail addresses from users under age 13.
The COPPA rule requires companies operating websites to notify parents and obtain their consent before they collect, use or disclose children’s personal information. The regulations also require companies to post a clear and understandable privacy policy.
According to the complaint, W3 did not notify users about how they were collecting and using personal information and did not obtain “verifiable” parental consent. The FTC charged that those practices violated the children’s privacy act.
In addition to the fine, W3 has been barred from further violations of the children’s privacy act and will be required to delete all personal information it collected in violation of the regulations.
West Virginia Democrat John Rockefeller, who led a Senate hearing in May about online privacy, applauded the FTC’s action against W3.
“As I have made clear at a number of online privacy hearings held by this Committee, consumers may not realize that their personal information is being collected by third party companies for marketing or profiling purposes,” Rockefeller said. ”The FTC’s enforcement action sets a legal precedent that mobile applications targeting children must abide by the protections established by the law.”
Rockefeller wants the FTC to complete its revision of the children’s privacy act to reflect recent changes in technology.
