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NOTE: This website is where you can find advertising law information based on archived news briefs from past issues of Advertising Compliance Service. This archived news brief was published in Advertising Compliance Service in October 2001.





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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,, is directed to children, as that term is defined by the Rule. It further alleges that between April 21 and January 2001, 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.)


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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