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WEB SITE TARGETING GIRLS SETTLES FTC PRIVACY CHARGES
A manufacturer of popular girls' toys and school supplies, and operator of a Web
site featuring those products, will pay $30,000 in civil penalties to
settle FTC charges that it violated the Children's Online Privacy
Protection Rule (COPPA Rule) and the FTC Act. The settlement also
bars the company, Lisa Frank, Inc., from certain future violations of
the law.
This is the fourth law enforcement action FTC has taken to enforce
the COPPA Rule since it became effective in April, 2000. The COPPA
Rule applies to operators of commercial Web sites and online services
directed to children under the age of 13, and to general audience Web
sites and online services that knowingly collect personal information
from children.
Among other things, the Rule requires that Web sites get verifiable
consent from a parent or guardian before they collect personal
information from children. This case was brought to FTC's attention
by the Children's Advertising Review Unit (CARU) of the Council of
Better Business Bureaus. CARU evaluated the Lisa Frank Web site in
late 2000, after the COPPA Rule became effective. According to CARU's
press release announcing referral of the matter to FTC, Lisa Frank,
Inc. committed serious violations of the COPPA Rule and, despite
CARU's urging, failed to make the changes needed to bring the Lisa
Frank Web site into compliance with the Rule.
In its complaint, FTC alleged that the Lisa Frank Web site,
www.lisafrank.com, is directed to children, as that term is defined
by the Rule. It further alleges that between April 21 and January
2001, lisafrank.com asked girls to register before they accessed many
areas of the site, including the "club" and "shop" areas. The
registration form asked girls for their first and last names, street
addresses, phone numbers, e-mail addresses and birth dates, as well
as their favorite color and season. Though directed to children, the
site did not get consent from parents before collecting this
information as required by the Rule, according to FTC's complaint.
Settlement of the FTC charges permanently bars Lisa Frank, Inc. from
future violations of the COPPA Rule; enjoins it, in connection with
the operation of any Web site or other online service, from failing
to comply with certain representations about children's privacy; and
requires that if the company operates a child-directed site in the
future, it place a hyperlink to FTC 's website pages about the COPPA
Rule within that site's privacy policy and on notices to parents
about collection of information from children. Finally, the company
agreed to pay a civil penalty of $30,000.
The proposed consent decree was filed on October 1, 2001 by the
Department of Justice at FTC's request. It's subject to court
approval.
NOTE: This consent decree is for settlement purposes only and does
not constitute an admission by the defendant of a law violation.
Consent decrees have the force of law when signed by the judge.
(Lisa Frank, Inc., FTC File No. 012-3050, Civil Action No. 01-1516-A,
October 2, 2001.)
FTC CHAIRMAN UNVEILS AGGRESSIVE NEW PRIVACY AGENDA
Timothy J. Muris, FTC Chairman, unveiled the agency's Privacy Agenda on October 4, 2001
during a speech at the Privacy 2001 Conference in Cleveland, Ohio.
Muris has extensive experience as a former FTC bureau director,
academic, attorney, and economist on issues of concern to American
consumers. He has spent the past four months meeting with agency
staff, consumer groups, information technology executives, academics,
and several trade association representatives on privacy issues.
Among the key points in that speech: FTC will increase the resources
devoted to protecting privacy by 50%.
Muris also described the specifics of how FTC intends to increase
protection of consumer privacy in the market place by focusing on:
telemarketing, spam, ID theft, and pretexting, as well as enforcement
under the Fair Credit Reporting Act, the Children's Online Privacy
Protection Act (COPPA), the Gramm-Leach-Bliley Act and the
Telemarketing Sales Rule.
(FTC Media Advisory, October 1, 2001.)
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