HyperBeard, the makers of several children’s mobile apps (including KleptoCats), recently settled with the FTC over failure to obtain verifiable parental consent before collecting children’s personal information online, in violation of COPPA. In its complaint, the FTC argued that the HyperBeard apps were clearly directed to children. The apps contained brightly-colored animated characters, kid-friendly language, games that were easy to play, and were promoted on kids’ websites and publications.
In the settlement, the company agreed to pay $150,000 in civil penalties and to delete the information it collected without obtaining appropriate parental consent. The $150,000 payment was in lieu of the $4,000,000 judgment entered against both the company and its CEO. Even still, in an unusual move, one of the commissioners dissented, stating that the penalty was too high in view of the (little) harm that resulted from the violation. The company and its officers also agreed to provide appropriate notice (as required by COPPA), as well as to get parental consent in the future.
Putting it Into Practice: This settlement is a reminder that the FTC continues to scrutinize mobile apps for compliance with COPPA. Those that are “directed to children,” as defined by the law, should think through the statute’s notice and parental consent requirements.