Surrounding a breakfast seminar, which was held at Davis & Gilbert today entitled, “Complying with the FTC’s Final Amendments to its COPPA Rule: What You Need to Know,” I thought a great post would be to examine that very topic. In addition, I had the chance to speak to Wayne Keeley Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus and interview him as my Q&A guest this week.
Advertising to children has long been laden with complex issues. Advertising promoting products that target children have long faced criticism from consumer advocates and regulators who raise safety, health, or inappropriate content concerns. In the digital age filled with online privacy and data collection concerns at every corner and constantly evolving technologies that put individuals – especially children – at risk, the Federal Trade Commission has increased its regulation and enforcement. With the increased use of mobile technology and apps by children under the age of 13, the FTC initiated its review of the Children’s Online Privacy Protection Act of 1998 (COPPA) in 2010 to allow children’s advocates, website and app developers, and advertising executives and coalitions to chime in on how the FTC should update the outdated rule to protect children from the new dangers of social media, location-based software, video chatting, photo sharing, and more. With COPPA’s expanded scope, the FTC is making an effort to ensure its regulations cover new technology and innovation.
The Way I See It
- I see the new COPPA rule expanding the types of companies that are required to obtain parental permission before collecting data and information from children to reflect the digital world we live in today. COPPA clearly covers mobile and tablet apps, location technology tools, voice recognition tools, social sharing networks including Instagram, Facebook, and Twitter, and online advertising networks, among others.
- I see the FTC making strides in privacy and data protection regulation with the expanded COPPA provisions, and advertisers and marketers being forced to adapt to new rules for behavioral advertising in particular.
- The advertising industry has long championed self-regulation for advertising to children, so while the new COPPA rules are broader, the industry may not have too many new practices to adapt. Many have also begun taking stricter precautions in engaging with and advertising to children in anticipation of the expansion of COPPA.
- I see that new restrictions on cookie-based and other identification systems could mean some websites targeting children may reduce or stop their use of advertising networks.
The Way the Industry Sees It
I sat down with Wayne Keeley, Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus, to discuss the FTC’s recent amendments to COPPA and what it means for advertisers, tech innovation, and regulation.
Let’s start by discussing CARU’s response to the expansion of COPPA. Does the regulation overlap areas of the CARU guidelines? In what ways is the regulation new for the industry?
Rather than overlapping, I believe that the COPPA rule modifications have brought the COPPA Rule more in line with CARU’s Guidelines. CARU’s Guidelines represent self-regulatory practices. Self-Regulation can sometimes go beyond what is required in the law and/or regulatory standards. For example, CARU’s guidelines went beyond the COPPA Rule in those instances where website operators had a reasonable expectation that a significant number of children will be visiting their websites. In those instances, CARU said they should employ age screening mechanisms to determine whether verifiable parental consent or notice and opt-out is necessitated. The old COPPA Rule had an actual knowledge standard. Under the new Rule, however, the FTC has provided an option for websites with mixed audiences that is closer to our self-regulatory model by providing that sites that target children as a secondary audience can screen users via an age gate. Accordingly, operators will be required to provide notice and obtain consent only for those who identify themselves as under 13. This is a great example of how the experience gained under self–regulation can make a positive contribution to fashioning workable regulatory approaches as well. The regulation is also new for the industry in that definitions are added and expanded and the FTC’s oversight of safe harbor programs is enhanced and strengthened. The new definition brings the collection of information for behavioral advertising within the regulation for the first time and will require child-directed sites to obtain parental consent before allowing the collection of information for interest-based advertising on their sites even if that information does not identify a specific child.
What does CARU see as the biggest threat to child safety and protection (i.e., location-based technology, personal data collection, etc.)? Are there certain trends in social media or mobile technology that are red flags for CARU?
CARU has always seen the collection of personal information from young children as an important issue and had adopted data collection guidelines even in advance of the COPPA legislation. That aspect has not changed. The modified COPPA Rule responds to technological innovation (e.g., geo-location based technology) and current technology use (e.g., increase in use of Smartphones by children). Social media and mobile technology have always been on CARU’s radar from their inception. Their importance to CARU has grown in direct proportion to the increasing number of young children accessing social media and mobile technology. While young children are increasingly adopting mobile and social media technology, the basic concerns underlying the creation of CARU – that young children are a vulnerable audience and therefore need protection – remain the same. We look forward to working with responsible industry members to assure that these concerns are addressed. This is particularly true in the expanding area of mobile apps which are developing rapidly and are subject to the new COPPA rule as well as CARU’s general guidelines if they are child-directed.
What role does industry self-regulation and CARU’s guidance play in ensuring advertisers and marketers are respecting children’s privacy? Will the expansion of COPPA really impact advertisers, given longstanding self-regulatory practices, or will there be an impact felt more by others?
For the past thirty plus years CARU has endeavored to balance protecting children’s interests (which is the most important) with responsible advertising and safety on the Internet. In doing so, CARU has had an excellent track record with website operators and advertisers with 90% + compliance rate. CARU will continue to act in that capacity under the modified COPPA Rule. I believe that despite the long-standing self-regulatory practices, there will be a learning curve and a technological implementation curve that will impact upon all advertisers under the new COPPA Rule. Website operators will need to educate themselves as to the changes in COPPA as soon as possible before the July 1 implementation date. Adapting business practices to accommodate the expansion of the Rule to encompass the collection of data for behavioral advertising purposes will be particularly challenging for sites that are advertising-supported.
Can you give us some examples of things that companies are doing to ensure child safety and privacy protection, whether in advertising practices or other technology? Is there anything truly innovative happening in the industry to meet the guidelines while remaining ahead of the curve in terms of digital, mobile, and social?
Companies are reaching out to the established Safe Harbors to determine if becoming a Safe Harbor participant is right for them. They are also attending seminars, conferences and webinars that are focused on the COPPA modifications. We also understand that a number of companies are also looking into available technology as well as developing proprietary technology to assist in compliance with the new COPPA Rule.
What is the coolest object in your office right now?
CARU is in the midst of developing an Advertising Media Literacy program for the industry. I think one of the coolest things in the office (because there are so many) is the Game of Life, Media Smart version of the classic game, which is available in the UK and is something CARU is considering launching in the United States. That is in close competition with my Sigmund Freud action figure.