With calls to strengthen kids’ online privacy and safety protections growing louder by the day, 2023 was supposed to be the year that Congress would pass new legislation. That didn’t happen. Enter the Federal Trade Commission (FTC).

The agency pursued several blockbuster children’s privacy enforcement actions in 2023, including two against video game companies, that resulted in hundreds of millions in fines and landmark legal remedies. Then, at the very end of the year, the agency issued long-awaited proposals for changes to the Children’s Online Privacy Protection Rule, a process it began in 2019.

The COPPA Rule, last updated in 2013, implements the Children’s Online Privacy Protection Act, which dates back even earlier — to 1999. Although the agency can’t change the Act itself (that’s Congress’ job), it can make far-reaching changes to the Rule. It’s still unclear what a final rule will look like and when (or whether) it will arrive, but the FTC’s cusp of the year move means that 2024 will certainly be a consequential year for children’s privacy.

As a longstanding FTC-authorized COPPA Safe Harbor program, we follow the agency’s COPPA work closely. We’ve delved into the Notice of Proposed Rulemaking (NPRM) to understand what the NPRM will mean for our member video game and toy companies – and for the millions of kids and teens (and their parents) that play games. (Although the average age of a gamer is 32, 76% of people under the age of 18 play video games.) We plan to file a comment on the proposed rule changes within the 60-day comment period that will start to run once the NPRM is published in the Federal Register, most likely later this week.

Although we’re still considering our responses to the NPRM, we’re providing a summary of the most important provisions to spare you reading all 164 pages of the document. (LinkedIn estimated that it would take me 228 minutes to read the NPRM. Once. I’ve already ready it multiple times.) So, if you don’t have four – or forty – hours to devote to COPPA Rule reform, read on. It shouldn’t take four hours, but this blog is on the longer side. For convenience, we’ve divided it into three categories: (1) Changes; (2) Emphasis; and (3) Status Quo.

CHANGES
First up, notable changes to definitions and substantive aspects of the Rule:

• Personal Information: Currently, the COPPA Rule’s definition of personal information includes information collected from a child such as name, address, online contact information, screen or user names (when they function as contact information), phone numbers, social security numbers, geolocation information and photography, video, or audio files that contain a child’s image or voice. The Rule also includes “persistent identifiers” (such as IP addresses) that can be used to recognize users over time and across different web sites or online services in the definition of personal information.
  • Proposal: In the NPRM, the agency proposes expanding this definition to include biometric identifiers and all forms of government identification, not just SSNs. The FTC’s inclusion of biometric identifiers including “fingerprints or handprints; retina and iris patterns; genetic data, including a DNA sequence; or data derived from voice data, gait data, or facial data” as personal information is not surprising. In its May 2023 Biometric Policy Statement, the FTC articulated its concerns about the “new and increasing risks associated with the collection and use of biometric information” and FTC Commissioner Alvaro Bedoya has regularly sounded the alarm bell on how “companies are protecting children’s biometric data against breaches, fraud, and abuse.”
  • Questions: Beyond biometric information, the agency raises questions about two other categories of information – avatars and online screen or user names – that may be of interest to video game companies:First, the NPRM asks whether screen or user names should be treated as online contact information “even if the screen or user name does not allow one user to contact another user through the operator’s website or online service, when the screen or user name could enable one user to contact another by assuming that the user to be contacted is using the same screen or user name on another website or online service that does allow such contact?”
    Second, referring to the popularity of avatars in online services such as video games, the NPRM asks whether the Rule should explicitly designate avatars generated from a child’s image as personal information “even if the photograph of the child is not itself uploaded to the site or service and no other personal information is collected from the child.” The agency is interested in receiving specific feedback on these issues.
• Target Audience: The target audience for a digital service is key to determining when an online service is “directed to children.”
  • Proposal: Although the FTC does not propose moving away from the multi-factor test it uses to determine whether a site is child-directed, it proposes adding a list of examples of evidence that the agency will consider in analyzing audience composition and intended audience. This will include “marketing or promotional materials or plans, representations to consumers or to third parties, reviews by users or third parties, and the age of users on similar websites or services.”
  • Questions: The NPRM also seeks feedback on whether the FTC should provide an exemption from designation as a child-directed service, for companies that have empirical evidence that no more than a specific percentage of its users are likely to be children under the age of 13. It also asks a number of questions about the contours of such an exemption.
    • Mixed Audience: The NPRM also proposes adding an express definition of “mixed audience” sites to the Rule. As with the current Rule, mixed audience services are directed to children, but do not target children as their primary audience. Such services cannot collect, use, or disclose users’ information without verifiable parental consent unless they use a neutral method “that does not default to a set age or encourage visitors to falsify age information” to collect a user’s age or use another method “reasonably calculated to determine if the user is a child.” This would permit companies to apply COPPA protections only to users under the age of 13.

• Verifiable Parental Consent: One of the fundamental features of the COPPA Rule is the requirement that companies obtain verifiable parental consent (VPC) from parents for the collection and use of children’s personal information.
  • Proposal: The NPRM focuses on the sharing of children’s information with third parties, especially with advertisers, by requiring companies to obtain a separate VPC for disclosures of a child’s personal information unless such disclosures are “integral to the nature of the website or online service.” (The NPRM provides the example of an “online messaging forum” as an example of a situation where information disclosure would be “integral.”) As the FTC explains in its Business Blog, this means that “COPPA-covered companies’ default settings would have to disallow third-party behavioral advertising and allow it only when parents expressly opt in.” In addition, as the NPRM makes clear, this requirement is feature-specific. So, if a company implements a “chatbot or other feature that simulates conversation” it must obtain VPC.
  • Questions: Interestingly, although the NPRM states several times that COPPA permits contextual advertising without VPC, the FTC is seeking comment on this issue. Question 10 asks, “Operators can collect persistent identifiers for contextual advertising purposes without parental consent so long as they do not also collect other personal information. Given the sophistication of contextual advertising today, including that personal information collected from users may be used to enable companies to target even contextual advertising to some extent, should the Commission consider changes to the Rule’s treatment of contextual advertising?”

• Internal Operations and Notice: The COPPA Rule has long allowed companies to collect and use persistent identifiers without first getting VPC if they don’t collect any other personal information and use the persistent identifiers only to provide support for internal operations. In the NPRM, the agency expressly declined to provide a narrowed or expanded definition of “internal operations.” It also stated that it believes that the practice of ad attribution, which allows an advertiser to associate a consumer’s action with a particular ad, “currently falls within the support for the internal operations definition” except when it is used for behavioral advertising, amassing a profile on a specific individual, or directly contacting an individual.
  • Proposal: To increase transparency around the internal operations exception, however, the agency would require companies to specifically identify the way in which they will use a collected personal identifier in their online notices. In addition, the company must “describe the means it uses to ensure that it does not use or disclose the persistent identifier to contact a specific individual, including through behavioral advertising, to amass a profile on a specific individual, in connection with processes that encourage or prompt use of a website or online service, or for any other purpose, except as permitted by the support for the internal operations exception.”

• Internal Operations and Engagement: As foreshadowed in the quoted language immediately above, the FTC is interested in issues that go beyond pure privacy concerns like “nudging.”
  • Proposal: The NPRM also proposes to expand the Rule’s restrictions on the internal operations exception to processes (including machine learning processes) that would “encourage or prompt” a child’s use of an online service. This would include “push notifications” that encourage kids to use their service more. Companies that use persistent identifiers to send these push notifications would also be required to flag that use in their direct and online notices. This would ensure parents are aware of, and have consented to, these processes.
  • Questions: Here, too, the agency seeks additional comment, asking how companies are currently using persistent identifiers to maximize user engagement and how it could distinguish between “user-driven” personalization versus personalization driven by a business. In a separate question, the NPRM also asks whether the Rule should address other engagement techniques, as well as whether the Rule should “differentiate between techniques used solely to promote a child’s engagement with the website or online service and those techniques that provide other functions, such as to personalize the child’s experience on the website or online service?”

• Data security: Consistent with concerns that the FTC has raised about data security in the recent COPPA enforcement cases, the proposed Rule significantly expands the COPPA Rule’s existing data security requirement.
• Proposal: The NPRM requires companies to have written comprehensive security programs that are proportional to the “sensitivity of children’s information and to the operator’s size, complexity, and nature and scope of activities.” It also sets out requirements for performing annual data security assessments, implementing and testing safeguards, and evaluating and modifying their info security programs on an annual basis. The proposed Rule would also require companies to obtain written assurances from third parties to whom they transfer personal information, such as service providers, to maintain the confidentiality, security, and integrity of information.

• Safe Harbor oversight: Of particular interest to us are the additional reporting and transparency requirements for Safe Harbor programs. Several of the proposals reflect comments that we have made to the FTC and to members of Congress inviting additional oversight to ensure that all Safe Harbor programs fulfill their responsibilities under the COPPA Rule. Others may present operational challenges. We will provide detailed responses to these proposals in our public comment on the NPRM.

• Online contact information: Recognizing the significant convenience and utility of text communications, the FTC also proposes adding mobile telephone numbers to the list of identifiers that constitute “online contact information” so that parents can provide consent via text message. The NPRM makes clear, however, that companies may only use a child’s number to send a text message, and that the agency will not permit companies to collect and use a child’s mobile telephone number to communicate with the child, unless it has obtained verifiable parental consent to do so.

EMPHASIS
Beyond these proposed changes, it’s worth noting what is staying the same, but with more emphasis. Two issues stand out:

• • Data minimization: The Rule has long prohibited companies from collecting more personal information than is reasonably necessary for a child to participate in a game, offering of a prize, or another activity. The NPRM reinforces this prohibition, making it clear that it applies even if a company has obtained VPC.

• • Data retention and deletion: The NPRM emphasizes the FTC’s focus on data retention in recent enforcement actions. Companies can only retain personal information for as long as necessary to fulfill the purpose for which it was collected: they cannot hold on to it indefinitely or use it for any secondary purpose. This means that a company that collects a child’s email address for account creation purposes, cannot use it for marketing purposes without VPC. The proposal would also require companies to post a data retention policy for children’s personal information to enhance parents’ ability to make informed decisions about data collection.

STATUS QUO
Finally, here’s what isn’t changing, at least not as part of the FTC’s rulemaking process:

• • Teens: First, despite making clear, in a variety of contexts (such as the Epic Games settlement and last year’s Advance Notice of Proposed Rulemaking on Commercial Surveillance and Lax Security Practices), that teens should benefit from privacy protections, the NPRM does not address raising the age of a “child” beyond 12, as urged by many commentors. This is because the agency does not have the authority to change the age of a child, which is established in the Act.

• • Knowledge Standard: Currently, COPPA only applies to “child-directed” services or when an operator has “actual knowledge.” Despite many comments urging the FTC to change the standard from the “actual knowledge” standard to a “constructive knowledge” or another less definite standard, the agency declined to do so. Instead, it includes a long discussion of the legislative history of the Act on this point, sending a strong signal to Congress that the ball is in its court on that issue – and other issues like teen privacy that would require Congressional amendment of the Act (as opposed to FTC modification of the Rule) — when it reconvenes for 2024.

• • Inferred Data: Similarly, the NPRM declines to include “inferred data” in the definition of personal information because the Act makes clear that COPPA applies to information collected from a child, not about a child.

• • Rebuttable presumption: The agency also declined to permit general audience platforms to rebut the presumption that all users of child-directed content are children, finding that the “reality of parents and children sharing devices, along with account holders remaining perpetually logged into their accounts, could make it difficult for an operator to distinguish reliably between those users who are children and those who are not.”

As senior vice president of ESRB Privacy Certified (EPC), Stacy Feuer ensures that member companies in the video game and toy industries adopt and maintain lawful, transparent, and responsible data collection and privacy policies and practices for their websites, mobile apps, and online services. She oversees compliance with ESRB’s privacy certifications, including its “Kids Certified” seal, which is an approved Safe Harbor program under the Federal Trade Commission’s Children’s Online Privacy Protection Act (COPPA) Rule. She holds CIPP/US and CIPP/E certifications from the International Association of Privacy Professionals.

The post Probing the FTC’s COPPA Proposals: Updates to Kids’ Privacy Rule Follow Agency’s Focus on Technological Changes appeared first on ESRB Ratings.

With calls to strengthen kids’ online privacy and safety protections growing louder by the day, 2023 was supposed to be the year that Congress would pass new legislation. That didn’t happen. Enter the Federal Trade Commission (FTC).

The agency pursued several blockbuster children’s privacy enforcement actions in 2023, including two against video game companies, that resulted in hundreds of millions in fines and landmark legal remedies. Then, at the very end of the year, the agency issued long-awaited proposals for changes to the Children’s Online Privacy Protection Rule, a process it began in 2019.

The COPPA Rule, last updated in 2013, implements the Children’s Online Privacy Protection Act, which dates back even earlier — to 1999. Although the agency can’t change the Act itself (that’s Congress’ job), it can make far-reaching changes to the Rule. It’s still unclear what a final rule will look like and when (or whether) it will arrive, but the FTC’s cusp of the year move means that 2024 will certainly be a consequential year for children’s privacy.

As a longstanding FTC-authorized COPPA Safe Harbor program, we follow the agency’s COPPA work closely. We’ve delved into the Notice of Proposed Rulemaking (NPRM) to understand what the NPRM will mean for our member video game and toy companies – and for the millions of kids and teens (and their parents) that play games. (Although the average age of a gamer is 32, 76% of people under the age of 18 play video games.) We plan to file a comment on the proposed rule changes within the 60-day comment period that will start to run once the NPRM is published in the Federal Register, most likely later this week.

Although we’re still considering our responses to the NPRM, we’re providing a summary of the most important provisions to spare you reading all 164 pages of the document. (LinkedIn estimated that it would take me 228 minutes to read the NPRM. Once. I’ve already ready it multiple times.) So, if you don’t have four – or forty – hours to devote to COPPA Rule reform, read on. It shouldn’t take four hours, but this blog is on the longer side. For convenience, we’ve divided it into three categories: (1) Changes; (2) Emphasis; and (3) Status Quo.

CHANGES
First up, notable changes to definitions and substantive aspects of the Rule:

• Personal Information: Currently, the COPPA Rule’s definition of personal information includes information collected from a child such as name, address, online contact information, screen or user names (when they function as contact information), phone numbers, social security numbers, geolocation information and photography, video, or audio files that contain a child’s image or voice. The Rule also includes “persistent identifiers” (such as IP addresses) that can be used to recognize users over time and across different web sites or online services in the definition of personal information.
  • Proposal: In the NPRM, the agency proposes expanding this definition to include biometric identifiers and all forms of government identification, not just SSNs. The FTC’s inclusion of biometric identifiers including “fingerprints or handprints; retina and iris patterns; genetic data, including a DNA sequence; or data derived from voice data, gait data, or facial data” as personal information is not surprising. In its May 2023 Biometric Policy Statement, the FTC articulated its concerns about the “new and increasing risks associated with the collection and use of biometric information” and FTC Commissioner Alvaro Bedoya has regularly sounded the alarm bell on how “companies are protecting children’s biometric data against breaches, fraud, and abuse.”
  • Questions: Beyond biometric information, the agency raises questions about two other categories of information – avatars and online screen or user names – that may be of interest to video game companies:First, the NPRM asks whether screen or user names should be treated as online contact information “even if the screen or user name does not allow one user to contact another user through the operator’s website or online service, when the screen or user name could enable one user to contact another by assuming that the user to be contacted is using the same screen or user name on another website or online service that does allow such contact?”
    Second, referring to the popularity of avatars in online services such as video games, the NPRM asks whether the Rule should explicitly designate avatars generated from a child’s image as personal information “even if the photograph of the child is not itself uploaded to the site or service and no other personal information is collected from the child.” The agency is interested in receiving specific feedback on these issues.
• Target Audience: The target audience for a digital service is key to determining when an online service is “directed to children.”
  • Proposal: Although the FTC does not propose moving away from the multi-factor test it uses to determine whether a site is child-directed, it proposes adding a list of examples of evidence that the agency will consider in analyzing audience composition and intended audience. This will include “marketing or promotional materials or plans, representations to consumers or to third parties, reviews by users or third parties, and the age of users on similar websites or services.”
  • Questions: The NPRM also seeks feedback on whether the FTC should provide an exemption from designation as a child-directed service, for companies that have empirical evidence that no more than a specific percentage of its users are likely to be children under the age of 13. It also asks a number of questions about the contours of such an exemption.
    • Mixed Audience: The NPRM also proposes adding an express definition of “mixed audience” sites to the Rule. As with the current Rule, mixed audience services are directed to children, but do not target children as their primary audience. Such services cannot collect, use, or disclose users’ information without verifiable parental consent unless they use a neutral method “that does not default to a set age or encourage visitors to falsify age information” to collect a user’s age or use another method “reasonably calculated to determine if the user is a child.” This would permit companies to apply COPPA protections only to users under the age of 13.

• Verifiable Parental Consent: One of the fundamental features of the COPPA Rule is the requirement that companies obtain verifiable parental consent (VPC) from parents for the collection and use of children’s personal information.
  • Proposal: The NPRM focuses on the sharing of children’s information with third parties, especially with advertisers, by requiring companies to obtain a separate VPC for disclosures of a child’s personal information unless such disclosures are “integral to the nature of the website or online service.” (The NPRM provides the example of an “online messaging forum” as an example of a situation where information disclosure would be “integral.”) As the FTC explains in its Business Blog, this means that “COPPA-covered companies’ default settings would have to disallow third-party behavioral advertising and allow it only when parents expressly opt in.” In addition, as the NPRM makes clear, this requirement is feature-specific. So, if a company implements a “chatbot or other feature that simulates conversation” it must obtain VPC.
  • Questions: Interestingly, although the NPRM states several times that COPPA permits contextual advertising without VPC, the FTC is seeking comment on this issue. Question 10 asks, “Operators can collect persistent identifiers for contextual advertising purposes without parental consent so long as they do not also collect other personal information. Given the sophistication of contextual advertising today, including that personal information collected from users may be used to enable companies to target even contextual advertising to some extent, should the Commission consider changes to the Rule’s treatment of contextual advertising?”

• Internal Operations and Notice: The COPPA Rule has long allowed companies to collect and use persistent identifiers without first getting VPC if they don’t collect any other personal information and use the persistent identifiers only to provide support for internal operations. In the NPRM, the agency expressly declined to provide a narrowed or expanded definition of “internal operations.” It also stated that it believes that the practice of ad attribution, which allows an advertiser to associate a consumer’s action with a particular ad, “currently falls within the support for the internal operations definition” except when it is used for behavioral advertising, amassing a profile on a specific individual, or directly contacting an individual.
  • Proposal: To increase transparency around the internal operations exception, however, the agency would require companies to specifically identify the way in which they will use a collected personal identifier in their online notices. In addition, the company must “describe the means it uses to ensure that it does not use or disclose the persistent identifier to contact a specific individual, including through behavioral advertising, to amass a profile on a specific individual, in connection with processes that encourage or prompt use of a website or online service, or for any other purpose, except as permitted by the support for the internal operations exception.”

• Internal Operations and Engagement: As foreshadowed in the quoted language immediately above, the FTC is interested in issues that go beyond pure privacy concerns like “nudging.”
  • Proposal: The NPRM also proposes to expand the Rule’s restrictions on the internal operations exception to processes (including machine learning processes) that would “encourage or prompt” a child’s use of an online service. This would include “push notifications” that encourage kids to use their service more. Companies that use persistent identifiers to send these push notifications would also be required to flag that use in their direct and online notices. This would ensure parents are aware of, and have consented to, these processes.
  • Questions: Here, too, the agency seeks additional comment, asking how companies are currently using persistent identifiers to maximize user engagement and how it could distinguish between “user-driven” personalization versus personalization driven by a business. In a separate question, the NPRM also asks whether the Rule should address other engagement techniques, as well as whether the Rule should “differentiate between techniques used solely to promote a child’s engagement with the website or online service and those techniques that provide other functions, such as to personalize the child’s experience on the website or online service?”

• Data security: Consistent with concerns that the FTC has raised about data security in the recent COPPA enforcement cases, the proposed Rule significantly expands the COPPA Rule’s existing data security requirement.
• Proposal: The NPRM requires companies to have written comprehensive security programs that are proportional to the “sensitivity of children’s information and to the operator’s size, complexity, and nature and scope of activities.” It also sets out requirements for performing annual data security assessments, implementing and testing safeguards, and evaluating and modifying their info security programs on an annual basis. The proposed Rule would also require companies to obtain written assurances from third parties to whom they transfer personal information, such as service providers, to maintain the confidentiality, security, and integrity of information.

• Safe Harbor oversight: Of particular interest to us are the additional reporting and transparency requirements for Safe Harbor programs. Several of the proposals reflect comments that we have made to the FTC and to members of Congress inviting additional oversight to ensure that all Safe Harbor programs fulfill their responsibilities under the COPPA Rule. Others may present operational challenges. We will provide detailed responses to these proposals in our public comment on the NPRM.

• Online contact information: Recognizing the significant convenience and utility of text communications, the FTC also proposes adding mobile telephone numbers to the list of identifiers that constitute “online contact information” so that parents can provide consent via text message. The NPRM makes clear, however, that companies may only use a child’s number to send a text message, and that the agency will not permit companies to collect and use a child’s mobile telephone number to communicate with the child, unless it has obtained verifiable parental consent to do so.

EMPHASIS
Beyond these proposed changes, it’s worth noting what is staying the same, but with more emphasis. Two issues stand out:

• • Data minimization: The Rule has long prohibited companies from collecting more personal information than is reasonably necessary for a child to participate in a game, offering of a prize, or another activity. The NPRM reinforces this prohibition, making it clear that it applies even if a company has obtained VPC.

• • Data retention and deletion: The NPRM emphasizes the FTC’s focus on data retention in recent enforcement actions. Companies can only retain personal information for as long as necessary to fulfill the purpose for which it was collected: they cannot hold on to it indefinitely or use it for any secondary purpose. This means that a company that collects a child’s email address for account creation purposes, cannot use it for marketing purposes without VPC. The proposal would also require companies to post a data retention policy for children’s personal information to enhance parents’ ability to make informed decisions about data collection.

STATUS QUO
Finally, here’s what isn’t changing, at least not as part of the FTC’s rulemaking process:

• • Teens: First, despite making clear, in a variety of contexts (such as the Epic Games settlement and last year’s Advance Notice of Proposed Rulemaking on Commercial Surveillance and Lax Security Practices), that teens should benefit from privacy protections, the NPRM does not address raising the age of a “child” beyond 12, as urged by many commentors. This is because the agency does not have the authority to change the age of a child, which is established in the Act.

• • Knowledge Standard: Currently, COPPA only applies to “child-directed” services or when an operator has “actual knowledge.” Despite many comments urging the FTC to change the standard from the “actual knowledge” standard to a “constructive knowledge” or another less definite standard, the agency declined to do so. Instead, it includes a long discussion of the legislative history of the Act on this point, sending a strong signal to Congress that the ball is in its court on that issue – and other issues like teen privacy that would require Congressional amendment of the Act (as opposed to FTC modification of the Rule) — when it reconvenes for 2024.

• • Inferred Data: Similarly, the NPRM declines to include “inferred data” in the definition of personal information because the Act makes clear that COPPA applies to information collected from a child, not about a child.

• • Rebuttable presumption: The agency also declined to permit general audience platforms to rebut the presumption that all users of child-directed content are children, finding that the “reality of parents and children sharing devices, along with account holders remaining perpetually logged into their accounts, could make it difficult for an operator to distinguish reliably between those users who are children and those who are not.”

As senior vice president of ESRB Privacy Certified (EPC), Stacy Feuer ensures that member companies in the video game and toy industries adopt and maintain lawful, transparent, and responsible data collection and privacy policies and practices for their websites, mobile apps, and online services. She oversees compliance with ESRB’s privacy certifications, including its “Kids Certified” seal, which is an approved Safe Harbor program under the Federal Trade Commission’s Children’s Online Privacy Protection Act (COPPA) Rule. She holds CIPP/US and CIPP/E certifications from the International Association of Privacy Professionals.

The post Probing the FTC’s COPPA Proposals: Updates to Kids’ Privacy Rule Follow Agency’s Focus on Technological Changes appeared first on ESRB Ratings.

Since the beginning of September, we’ve seen the Irish Data Protection Commission issue a huge, €345 million ($367 million) fine against TikTok for using unfair design practices that violate kids’ privacy. Delaware’s governor just signed a new privacy law that bans profiling and targeted advertising for users under the age of 18 unless they opt-in. And the Dutch data protection authority, just this week, announced an investigation into businesses’ use of generative AI in apps directed at young children.

As I was catching up with these matters yesterday, news broke that a federal district court judge in California had granted a preliminary injunction (“PI”) prohibiting the landmark California Age Appropriate Design Code Act (“CAADCA”) from going into effect on July 1, 2024. The judge ruled that the law violates the First Amendment’s free speech guarantees.

As ESRB Privacy Certified blog readers might recall, in September 2022, California enacted the CAADCA, establishing a far-reaching privacy framework that requires businesses to prioritize the “best interests of the child” when designing, developing, and providing online services. At the time, I wrote that the California law had the “potential to transform data privacy protections for children and teens in the United States.”

In particular, I pointed to the law’s coverage of children under the age of 18, its applicability to all online services “likely to be accessed by a minor,” and its requirement that businesses set default privacy settings that offer a “high level” of privacy protection (e.g., turning off geolocation and app tracking settings) unless the business can present a “compelling reason” that different settings are in the best interests of children. I also noted the Act’s provisions on age estimation/verification, data protection impact assessments (“DPIAs”), and data minimization as significant features.

In December 2022, tech industry organization NetChoice filed a lawsuit challenging the CAADCA on a wide range of constitutional and other grounds. In addition to a cluster of First Amendment arguments, NetChoice asserted that the Children’s Online Privacy Protection Act (“COPPA”), which is enforced primarily by the Federal Trade Commission (“FTC”), preempts the California law. The State of California, represented by the Office of the Attorney General, defended the law, arguing that the “Act operates well within constitutional parameters.”

Yesterday’s PI shifts the “atmospherics” of the kids’ privacy landscape dramatically. But the injunction doesn’t mean that businesses and privacy practitioners can ignore the underlying reasons for the CAADCA (which was passed overwhelmingly by the California legislature) or the practices and provisions it contains. Here’s a very rough analysis of the decision and some tips about what it might mean for your kids’ privacy program.

The Court’s Holding: In her 45-page written opinion, Judge Beth Labson Freeman held that “NetChoice has shown that it is likely to succeed on the merits of its argument that the provisions of the CAADCA intended to achieve [the purpose of protecting children when they are online] likely violates the First Amendment.” The Court held that the CAADCA is a regulation of protected expression, and not simply a regulation of non-expressive conduct, i.e., activity without a significant expressive element. Because she viewed the statute as implicating “commercial speech,” the Court analyzed the CAADCA under an “intermediate scrutiny standard of review.”

The Relevant Test: Under that standard (often referred to as the Central Hudson test based on the name of the Supreme Court case that formulated it), if the challenged regulation concerns lawful activity and speech that is not misleading, the government bears the burden of proving that (i) it has a “substantial interest” in the regulation advanced, (ii) that the regulation directly and materially advance the government’s substantial interest, and (iii) that the regulation is “narrowly tailored” to achieve that interest.

The Court recognized that California would likely succeed in establishing a substantial interest in protecting minors from harms to their physical and psychological well-being caused by lax data and privacy protections online. Reviewing the CAADCA’s specific provisions, however, it found that that many of the provisions  challenged by NetChoice did not meet the remaining prongs of the intermediate scrutiny test.

The Court’s Central Hudson Analysis: The Court made findings on each of the specific provisions challenged by NetChoice keyed to the Central Hudson factors. I highlight a few here:

• Data Protection Impact Assessments (DPIAs): The Court held that California did not meet its burden to demonstrate that the requirement for businesses to assess their practices in DPIAs would alleviate any harms from the design of digital products, services, and features, to a material degree.
• Age Estimation: Judge Freeman also found that the statutory requirement to estimate the age of child users with a “reasonable level of certainty” would likely fail the Central Hudson test: “[T]he CAADCA’s age estimation provision appears not only unlikely to materially alleviate the harm of insufficient data and privacy protections for children, but actually likely to exacerbate the problem by inducing covered businesses to require consumers, including children, to divulge additional personal information.”
  • The Court also found that the age estimation provision would likely fail to meet the Central Hudson test because the effect of a business choosing not to estimate age, but instead to apply privacy and data protections broadly, would impermissibly shield adults from that same content. In reaching this conclusion, Judge Freeman rejected California’s argument that the “CAADCA does not prevent any specific content from being displayed to a consumer, even if the consumer is a minor; it only prohibits a business from profiling a minor and using that information to provide targeted content.”
  • Notably, later in the decision, Judge Freeman held that the age estimation provision is the “linchpin” of most of most of the CAADCA’s provisions and therefore determined it is not “functionally severable” from the remainder of the statute.
• High Default Privacy Settings: The Court found that the CAADCA’s requirement for “high default privacy settings” would be likely to cause at least some businesses to prohibit children from accessing their services and products altogether.
• Profiling by Default: Here, Judge Freeman held that the provision banning profiling of children by default could discard “beneficial aspects” of targeted information to certain categories of children, e.g., pregnant teenagers.
• Dark Patterns: The Judge held that California did not meet its burden to establish that prohibitions on the use of dark patterns to lead or encourage children to provide unnecessary personal information would ameliorate a causally connected harm.

COPPA Preemption: Although the Court granted the injunction based on First Amendment considerations alone, it did, briefly, address NetChoice’s argument that the COPPA preempts the CAADCA. The Court rejected this argument at the PI stage, explaining: “In the Court’s view, it is not clear that the cited provisions of the CAADCA contradict, rather than supplement, those of COPPA. Nor is it clear that the cited provisions of the CAADCA would stand as an obstacle to enforcement of COPPA. An online provider might well be able to comply with the provisions of both the CAADCA and COPPA . . . . “

• N.B. Judge Freeman’s decision to act cautiously on this claim makes sense. Recently, the Ninth Circuit Court of Appeals, in Google v. Jones, overturned her decision that COPPA preempted state law claims asserted in a class action alleging that Google/You Tube used persistent identifiers to collect data and track children’s online behavior surreptitiously and without their consent – conduct that also violates COPPA. Interestingly, in that case, the Ninth Circuit invited the FTC, which enforces COPPA, to express its views on the preemption issue. The FTC accepted, stating that “Congress did not intend to wholly foreclose state protection of children’s online privacy, and the panel properly rejected an interpretation of COPPA that would achieve that outcome.”

Takeaways: The CAADCA litigation is far from over, and it is likely that the California Attorney General will seek an immediate interlocutory appeal. It is clear, though, that the district court’s decision will have consequences in the short term for state privacy laws that are scheduled to come into effect soon as well as for efforts underway in Congress on child-related online privacy and safety legislation. Here are a few takeaways:

• Privacy Laws Can Still Pack a Punch: Regardless of whether the Court ultimately strikes down the CAADCA or not, many of the concepts in the design code are already embedded in other privacy laws that apply to game and toy companies’ activities, both without and within the United States. On the U.S. front, there are newly enacted child privacy provisions in state laws that should be able to withstand constitutional challenge. Plus, the NetChoice ruling might loosen the California’s Congressional delegation’s resistance to bipartisan federal legislation. Although today’s some may view the Court’s ruling as a reprieve, companies still need to meet other legal obligations.
  • For example, Connecticut recently passed child privacy amendments (scheduled to go into effect on October 1, 2024) to its privacy law that skirt some of the elements Judge Freeman found provisionally unconstitutional. Unlike the CAADCA, the Connecticut law does not require that companies estimate the age of their users; it applies only to companies that have “actual knowledge” of or “willfully disregard” the presence of minor users, and it does not regulate “potentially harmful” (as opposed to illegal) content. Instead of using the CAADCA “best interest of the child” standard, the Connecticut law establishes a duty to avoid a “heightened risk of harm” to minors and delineates potential harms.
• DPIAs are still a “Must Do”: Most of the new state privacy laws passed in the last year contain requirements for data protection impact assessments, similar to those already required by the European Union’s General Data Protection Regulation (GDPR). At the beginning of September, the California Privacy Protection Agency published draft regulations that contain practical examples of how DPIAs should work under California’s comprehensive privacy law. Regardless of what happens with the CAADCA, statutory requirements for more focused DPIAs such as those in the California Consumer Privacy Act will likely remain.
  • Judge Freeman’s skepticism about the CAADCA’s DPIA provision aside, DPIAs can be a useful accountability tool for identifying privacy risks, working out when, where, and how likely they are to occur, and assessing the impact of such risks on your customers and business.
• COPPA Continues to Be Relevant: It will probably take years for the court battle over the CAADCA to play out. In the meantime, if you know that children — or teenagers — are using your products, expect the FTC to enforce COPPA and other privacy protections aggressively. (For quick review of the FTC’s recent COPPA cases, see my previous blog post COPPA Battlegrounds: The Quest to Uncover the Secrets of the FTC’s Kids’ Privacy Actions.)
  • Indeed, it’s likely the FTC will use both the substantive provisions of COPPA and the “unfairness” and “deception” prongs of Section 5 of the FTC Act to set requirements for child-friendly privacy disclosures, mandates for high privacy default settings, and prohibitions against manipulative dark patterns through its child-focused investigations and enforcement actions.
  • The NetChoice ruling – coupled with Congressional inaction – could also spur the FTC to complete its now-four-years-old COPPA Rule review and act on (at least parts of) last year’s privacy rulemaking proposal.

While this all unfolds, ESRB Privacy Certified will continue to help its program members comply with existing laws and adopt and implement best practices for children’s privacy. As privacy protections for kids and teens continue to evolve, we’ll be following closely and providing guidance to our program members on all of the moving parts of the complex children’s privacy landscape. To learn more about ESRB Privacy Certified’s compliance and certification program, please visit our website, find us on LinkedIn, or contact us at privacy@esrb.org.

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As senior vice president of ESRB Privacy Certified (EPC), Stacy Feuer ensures that member companies in the video game and toy industries adopt and maintain lawful, transparent, and responsible data collection and privacy policies and practices for their websites, mobile apps, and online services. She oversees compliance with ESRB’s privacy certifications, including its “Kids Certified” seal, which is an approved Safe Harbor program under the Federal Trade Commission’s Children’s Online Privacy Protection Act (COPPA) Rule.

The post A New Season for Kids’ Privacy: Court enjoins California’s Landmark Youth Privacy Law — Protecting Children Online Remains a Prime Concern appeared first on ESRB Ratings.

So, for a little fun, we decided to create an imaginary video game – COPPA Battlegrounds. Join the ESRB Privacy Certified team as we dive deeply into the ongoing saga of the Federal Trade Commission’s kids’ privacy enforcement actions – cases that have resulted in hundreds of millions of dollars in fines and landmark legal remedies. Venture into new privacy territory, unlocking the mysteries of “personal information,” “privacy by default,” “data retention,” and more! Collect XPs as you explore strategies and best practices to protect young gamers’ privacy.

The Players

The “COPPA Controller”: The Federal Trade Commission (FTC) is the U.S. government agency charged with protecting consumers and competition. It is the chief federal agency that works to protect consumer privacy. Over the years, it has brought hundreds of privacy and data security cases to protect consumers and their data.

The “Digital Defendants”: Several well-known tech companies have been hit with FTC actions alleging violations of children’s privacy law in the past half year. Two – Epic Games and Microsoft Xbox – are popular video game publishers. Amazon, Meta, and Edtech company, Edmodo, are also in the line-up.

The Weapons and Equipment

The “Sword of COPPA”: The Children’s Online Privacy Protection Act of 1998 (COPPA) and its implementing COPPA Rule (updated in 2013) provide the FTC with a powerful weapon to protect the privacy of children under the age of 13. The law and rule (together, COPPA) require companies that offer services “directed to children,” or that have knowledge that kids under 13 are using their services, to provide notice of their data practices. They must also obtain verifiable parental consent (VPC) from parents before collecting personal information from children. COPPA also contains strong substantive protections, mandating that companies minimize the data they collect from children, honor parents’ data deletion requests, and implement strong security safeguards. To date, the FTC has brought nearly 40 COPPA enforcement actions.

The “Section 5 Superweapon”: The FTC’s true superweapon comes from Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive practices in the marketplace. Since the advent of the internet, the FTC has used Section 5 to address a wide range of issues that affect people online, including the privacy of people purchasing and playing video games.

Policy Statement “Power-ups”: From time to time, the FTC releases policy statements that explain how the agency applies the laws it enforces. These potent statements put companies on notice that they will face legal action if they ignore the FTC’s prescriptions. In May, the FTC issued a Policy Statement on Biometric Information, which sets out a list of unfair practices relating to the collection and use of such data. Earlier, the FTC issued a Policy Statement on COPPA and EdTech that emphasized COPPA’s limits on companies’ ability to collect, use, and retain children’s data.

The Backstory

The FTC’s quest to secure a safer online environment for kids and their personal information has been ongoing since Congress passed COPPA in 1998. Previous blockbuster titles in the COPPA franchise include the FTC’s landmark 2019 settlement with Google/You Tube and the 2018 VTech and Musical.ly/TikTok actions.

COPPA has been extremely effective in giving parents information about and control over their kids’ data. There’s been an emerging consensus, however, that the legal framework for children’s privacy should be updated to include teenagers and meet the challenges of social media, mobility, ad tech, and immersive technologies – issues that weren’t present when Congress enacted the law 25 years ago. Despite the introduction of several bills in Congress to update COPPA, none have yet become law. The FTC therefore has proposed several new ideas to protect the privacy of not only children under the age of 13 but teens too. These are now playing out in the FTC’s enforcement actions.

 Multiplayer Actions

During the past half year or so, the FTC has announced four new COPPA actions, plus a an order against Meta/Facebook relating to a previous settlement. For video game companies, two stand out: the Epic Games/Fortnite settlement (see our earlier blog) and the Microsoft/Xbox Live settlement, announced in June. The FTC’s settlements with Amazon/Alexa and Edmodo also provide some clues to unlocking the secrets of the FTC’s COPPA enforcement mode. Consistent with ESRB Privacy Certified’s focus on privacy compliance in video games, we’ll focus our analysis on the two gaming cases. But we’ll add some insights from the NPCs (here, nonplayable “cases”), too.

Epic Games/Fortnite

Late last year, the FTC filed a two-count complaint and proposed settlement order against Epic Games. It alleged that Epic knew its massively popular game Fortnite was “directed to children” and unlawfully collected personal data from them without VPC. The FTC also charged Epic with violating the FTC Act by using unfair “on by default” voice and text chat settings that led to children and teens being bullied, threatened, and harassed within Fortnite. Epic settled with the FTC, agreeing to pay a $275 million civil penalty and to standard injunctive relief. (In the privacy area, this includes monitoring, reports, a comprehensive privacy plan, and regular, independent audits.) The final court Order entered in February also required Epic to implement privacy-protective default settings for children and teens. It also required the company to delete personal information previously collected from children in Fortnite unless the company obtains parental consent to retain such data or the user identifies as 13 or older.

Microsoft/Xbox Live

In the beginning of June, the FTC filed a one-count complaint and proposed settlement order against Microsoft alleging that its Xbox Live online service violated COPPA in three ways: (i) by collecting personal information (i.e., email address, first and last name, date of birth, and phone number) from kids under 13 before notifying their parents and getting VPC; (ii) by failing to provide clear and complete information about its data practices in COPPA’s required notices, i.e., that it didn’t tell parents that it would disclose Xbox’s customer unique persistent identifier to third-party game and app developers; and (iii)  by holding on to kids’ data for years even when parents did not complete the account creation process.

Microsoft, which has long had a comprehensive privacy program, settled with the FTC for $20 million. It agreed to implement new business practices to increase privacy protections for Xbox users under 13. For example, the Order requires Microsoft to tell parents that a separate child account will provide significant privacy protections for their child by default. The company also must maintain a system to delete, within two weeks from the collection date, all personal information collected from kids for the purpose of obtaining parental consent. In addition, Microsoft must honor COPPA’s data deletion requirements by deleting all other personal data collected from children after it no longer needs it for the purpose collected.

Unearthing the Seven COPPA Revelations

Beyond the allegations and remedies of the enforcement actions, there’s a wealth of information about the FTC’s kids’ privacy priorities and practices you might want to adopt – or avoid – if you want to stay out of the sites of the COPPA Controller. Here are COPPA Battlegrounds seven lessons for COPPA compliance based on the FTC’s recent kids’ privacy actions:

1. Sequence your game play to obtain VPC before you collect ANY personal information from a child: The FTC’s complaint in the Xbox action emphasized that – even though Microsoft had a VPC program in place – it violated COPPA by not obtaining parental consent before it collected any personal information from kids besides their data of birth. Xbox did require children to involve their parents in the registration process, but the FTC found that Microsoft’s initial collection of kids’ email addresses, their first and last name, and phone number before obtaining consent violated COPPA’s VPC requirements. The FTC also blasted Microsoft for requiring kids to agree to the company’s service agreement, which, until 2019, included a pre-checked box allowing Microsoft to send them promotional messages and to share user data with advertisers. The FTC’s approach indicates that they will look closely at companies’ verifiable parental consent sequences, and that they will strictly enforce COPPA’s prohibition on collecting any personal information before obtaining VPC (unless an exception to VPC exists).

2. The FTC views COPPA’s “actual knowledge” standard broadly and so should you: When the FTC announced its Epic Games settlement, we reminded companies that you can’t disclaim COPPA by declaring that you don’t process children’s information or by ignoring evidence that children are playing your games. Now, with the Xbox Live settlement, the FTC has affirmed that it will enforce COPPA against any company with “actual knowledge” that the company is handling children’s personal information, regardless of whether that company has directed its service to children intentionally. Significantly, the settlement requires Microsoft – when it discloses personal information about children to other video game publishers – to tell them that the user is a child. The FTC’s requirement for Microsoft to share information about children on its platform with third parties is a game-changing move. In the FTC’s words, “[I]t will put [third-party] publishers on notice that they, too, must apply COPPA protections to that child.”

3. Your COPPA notices must be clear, understandable, and complete: The FTC emphasized that it’s not enough under COPPA’s notice provisions to summarize your collection, use, and disclosure practices generally. Instead, your direct notice must be complete. The FTC faulted Microsoft for failing to tell parents about its collection of personal information children shared through their profile or Xbox Live usage, such as their “gamertags,” photos, which kids used to create avatars, and voice recordings from video messages. The agency also alleged that Microsoft’s notice failed to inform parents that it created persistent identifiers for children, which it combined with other information, and shared with third-party game and app developers. Going forward, it’s important for companies to specify, in a clear and complete way, their practices in the notices required by COPPA, and not just provide parents with a link to a densely worded privacy policy.

4. Privacy by default is not a fad: In Epic Games, the FTC focused for the first time not just on “privacy by design” but on “privacy by default,” finding that Epic did not have “privacy-protective” default settings in Fortnite that limited kids’ contact with strangers and otherwise protected their privacy. The FTC went further in Xbox Live, emphasizing that, even though Xbox had default settings that only allowed a child to disclose their activity feed or otherwise communicate with parent-approved “friends,” Microsoft configured other defaults in a way that did not protect children sufficiently. As the FTC emphasized in a blog about the Amazon case, “[C]ompanies that ignore consumers’ rights to control their data do so at their peril . . . The upshot is clear: Any company that undermines consumer control of their data can face FTC enforcement action.”

5. Take your data minimization and retention/deletion obligations seriously: The FTC’s recent cases also highlight COPPA’s substantive provisions on data minimization and data retention. The COPPA Rule prohibits conditioning a child’s participation in a game on the child “disclosing more personal information than is reasonably necessary to participate in such activity” and allows companies to keep it “for only as long as is reasonably necessary to fulfill the purpose for which the information was collected.” In the Edmodo complaint, for example, the agency said that Edmodo violated COPPA by using the personal information it collected for advertising instead of limiting it to educational purposes.

In the Xbox Live case, the agency chided Xbox for holding onto kids’ data when the parental verification process was incomplete, sometimes for years. Although Microsoft described this as a “technical glitch,” and explained that this data “was never used, shared, or monetized,” the FTC doubled down on its concerns with company data retention practices that violate COPPA. Indeed, in the Amazon Alexa case, the FTC charged that Amazon made it difficult for parents to exercise their right, under COPPA, to delete their children’s voice recording data. It further alleged that Amazon disregarded parents’ deletion requests, retained kids’ voice recordings indefinitely, and misled parents about its data deletion practices (e.g., by retaining copies of transcripts of voice recordings). The FTC is wielding the “Sword of COPPA” to press for meaningful data minimization, purpose limitation, and data retention/deletion practices.

6. Be especially careful when dealing with kids’ biometric data, algorithms, and machine learning: The FTC’s Xbox Live settlement covers biometric information like avatars generated from a child’s image and emphasizes COPPA’s strict limitations on the retention of this type of data from kids. In the Amazon case, the agency was clearly troubled by Amazon’s retention of kids’ voice recordings, which count as biometric info, indefinitely. One of the FTC Commissioners emphasized this point, stating that “Claims from businesses that data must be indefinitely retained to improve algorithms do not override legal bans on indefinite retention of data.” Consider yourself warned!

7. Privacy Innovation Can Help You Comply with COPPA: Not all the privacy-protective action in COPPA Battlegrounds comes from the FTC. Even before the settlement, Epic Games announced that it was creating “Cabined Accounts” to provide safe, tailored experiences for younger players. Following the FTC’s action, Microsoft unveiled its plans to test “next-generation identity and age validation” methods to create a “convenient, secure, one-time process for all players that will allow us to better deliver customized, safe, age-appropriate experiences.” Xbox explained that the entire games industry can benefit from advancing safe and innovative digital experiences that are accessible, simple to use, and benefit all players. We agree! Many ESRB Privacy Certified members are developing new strategies and tools to enhance kids’ privacy. Achievement unlocked!

The Final Conquest

Congratulations on completing the breakout version of COPPA Battlegrounds! You can now take your kids’ privacy program to the next level. Contact us at privacy@esrb.org if you’d like to discuss how your company can prevail in COPPA Battlegrounds – and its inevitable sequels.

As senior vice president of ESRB Privacy Certified (EPC), Stacy Feuer ensures that member companies in the video game and toy industries adopt and maintain lawful, transparent, and responsible data collection and privacy policies and practices. She oversees compliance with ESRB’s privacy certifications, including its “Kids Certified” seal, which is an approved Safe Harbor program under the Federal Trade Commission’s Children’s Online Privacy Protection Act (COPPA) Rule, and the general “Privacy Certified” seal.

The post COPPA Battlegrounds: The Quest to Uncover the Secrets of the FTC’s Kids’ Privacy Actions appeared first on ESRB Ratings.

Whether your children are using your device or their own, it likely contains lots of sensitive information like personal contacts, location data, photos, and browsing history. And, like most app developers, many mobile game companies make money by selling data and serving ads to their users. That’s especially the case for free-to-play games that don’t cost anything to play up front.

Whether they’re free or not, mobile games and apps use tracking technologies to collect information from and about players. Developers use gameplay data to improve their games, customize the experience, measure progress, iron out bugs, serve personalized ads, detect cheats, comply with laws, and more. To do so, they collect all sorts of data — everything from your child’s birthday and location to what in-game purchases they made.

There are, of course, laws that govern the collection and use of kids’ information. And app stores and game developers also offer many privacy tools for both children and adults. Despite this, it can be hard for parents and caregivers to figure out the maze of privacy laws, settings, and features. So, here are some tips to help protect your children’s privacy.

We’ve pulled together five tips to help protect your children’s privacy and are rolling one out each day. Our first tip? Start by looking for the app store privacy labels and the apps’ privacy policy. Here’s how.

• • Tip #1: Look for Privacy Labels and Policies

• • Tip #2: Use Parental Controls and Permissions

• • Tip #3: Look for the ESRB Privacy Certified Seal

• • Tip #4: Don’t Let Your Children Lie About Their Ages

• • Tip #5: Communicate with Your Kids

Tip #1: Look for Privacy Labels and Policies

Most of the games your children play will be ones you or they have downloaded from either the Google Play Store (Android) or the Apple App Store (iOS). As you’ve heard before, you should always check for age and content ratings before your children play games to ensure that the game is age appropriate. ESRB ratings are displayed for all games in the Google Play store.

What you might not know is that the app stores have also introduced “labels” for privacy modeled on nutrition labels on products in the grocery store. Instead of information about calories and nutrients, they have information about a game’s privacy policy and data collection practices. Apple’s “Privacy Information” labels and Google’s “Data Safety” labels differ somewhat, but both have links to the game’s full privacy policy, explain the types of data the game is collecting, what the data will be used for, and whether the game is sharing information with third parties.

The labels aim to be user-friendly and written in plain English, but they can still be difficult to understand. Here are a few things to focus on when looking at a privacy label in Google Play or the Apple App store:

• What information the app collects and uses about gamers (including child users) via their account, device, or other details)
• Whether the app collects “location” data, and, if so, whether it is “coarse” (meaning general information such as the city or town you live in) or “precise” (meaning your specific geographic address); and
• Whether the app potentially shares users’ information with third parties.

The app stores have also introduced “labels” for privacy modeled on nutrition labels on products in the grocery store. Instead of information about calories and nutrients, they have information about a game’s privacy policy and data collection practices.

Of course, the labels aren’t perfect. Not all game developers have posted privacy labels, and Google and Apple don’t verify companies’ self-reported info. Plus, some labels do have errors – usually unintentional, due to mistakes or misunderstandings. But they are an important starting point for understanding what kind of data a game collects from its users and your kids, more specifically, and how companies use and share that information.

Another source of information is a company’s privacy policy. Many mobile game companies now have simple short-form policies or dashboards summarizing key privacy facts such as what information is gathered in a game, where it goes, how it gets used, and whom to contact if you have a problem or question. You can view an example of a short form privacy policy in the ESRB Rating Search app (Android | iOS). And if you want more information, you can always review a company’s full-length privacy policy, which provides much greater detail.

It’s best to look at a game’s privacy label and privacy policy before your kids start playing. If you want more information afterwards, you can check out Google’s Privacy Dashboard on your Android device to see which apps accessed your child’s data and when. You can also check out the App Privacy Report in your iOS device’s settings to see how often your child’s location, photos, camera, microphone, and contacts have been accessed during the last seven days. Together with the privacy labels, these features can give you a more complete picture of how the apps your children use treat their privacy.

Almost all video game apps have to collect some personal information to function. But if you want to minimize the amount of personal data that is collected, used, and shared about your child, you can look for games that make clear that they won’t use kids’ personal information for any marketing, online advertising, employ any third-party tracking that would directly identify a child, or collect and share precise location information. The privacy labels and other features offered by the app stores such as family programs can help you figure that out.

Tip #2: Use Parental Controls and Permissions

You can set privacy controls and permissions for the mobile games and apps your children play and download, just like the parental controls you use on your kids’ video game consoles. Some game companies allow you to enable privacy features (such as limiting which players can see your game activity) that would normally share identifying information.

Also, both Apple and Google have settings for families that help you protect your children’s privacy by allowing you to restrict information sharing about your child’s location and block targeted advertising. Even if you block targeted ads, your child may still receive contextual advertising. Although you can’t stop advertising completely, you can limit inappropriate ads by buying the paid version of the game (if available), putting your child’s phone in airplane mode for simple games that don’t require an online connection, or using a third-party ad blocker.
You can also take advantage of other privacy-protective features that the app stores offer to all users. You can access Apple’s complete controls here and Google’s here.

You can also teach your kids to consult with you or say no to permissions that pop up in-game asking for data. That includes requests for your precise location, the contacts in your phone, pictures, or anything else that could identify you or your child. Explain that they should just say no to permissions that ask for access to anything that has to do with health, money, or making changes to the phone’s hardware.

Take advantage of family controls and other privacy-protective features from the app stores like Apple’s “Families” and Google’s “Family Link.” You can access Apple’s complete set of privacy controls here and Google’s here.

One of the most publicized developments is Apple’s App Tracking Transparency feature. If an app collects users’ data to track them across other apps and websites, the developer must send you a notification and receive your permission before they can track and share your activity. Apple automatically activates this feature if your children have an iPhone set up with a kids account. You can also toggle a setting, so these requests are denied automatically.

Late last year, Google introduced a similar feature that prevents apps from collecting the user’s advertising ID, which is used for ad tracking, when the user is opted out of personalized ads on Android 12. Google won’t allow developers to transmit the advertising ID from children in apps targeting children, such as those in the Families Link program. If you opt out of tracking, your kids will still be able to play most games although some features might not be available. Additionally, Google announced in August that it would block ad targeting based on the age, gender, or interests of users under 18, and also turn off location history for users under 18. Google plans to “start rolling out these updates across our products globally over the coming months,” so we are hopeful that they’ll implement this fully by the end of 2022.

You can also just say no. Before you grant permissions to any new app your kid is using or wants to download, review which permissions the app requires. See if they correspond to gameplay. For example, if a simple alphabet game for preschoolers wants access to your phone number or contact list, just say no. Your kid may still be able to play the game, although the developer may limit its functionality. You can also look for a privacy-friendly alternative.

Take some time to explore privacy and permissions that make sense for you and your family. And remember to review and update them periodically as game companies roll out new features and your kids mature and change.

Tip #3: Look for the ESRB Privacy Certified Seal

You’re probably already familiar with ESRB’s content ratings for video games and apps, but did you know that ESRB also has special icons certifying a company’s compliance with ESRB’s privacy requirements? ESRB Privacy Certified is a membership-based program that works mostly with companies in the toy and video game industries. We review our members’ products for compliance with the federal Children’s Online Privacy Protection Act (“COPPA”) and state privacy laws, as well as global rules, platform standards, and best practices.

We have two seals: (1) the ESRB Privacy Certified Kids Seal, which covers games directed or targeted to children, and (2) the ESRB Privacy Certified Seal for games that are not primarily directed to and do not target children.

The Kids Seal links to a confirmation page on our ESRB website, which confirms that a company is a member of our program, shows the seal(s) the member is approved to use, and provides a link to the member’s online privacy policy. The Federal Trade Commission (FTC), the United States’ leading privacy agency, has approved our Kids Seal requirements. Every year we provide a confidential annual report to the FTC detailing our compliance work with our members on children’s privacy.

When you see one of our ESRB Privacy Certified seals in a mobile app, you can be assured that we’ve reviewed the company’s privacy practices and policies thoroughly.

When you see one of our seals in a mobile app (often in or near the app’s privacy policy), you can be assured that we’ve reviewed the company’s privacy practices and policies thoroughly. We conduct an initial assessment to make sure the company’s product complies with applicable laws and the company’s actual practices are described accurately and fully. We also conduct two comprehensive reviews annually of each participant’s policies, practices, and products to help members remain compliant.

You can also find ESRB’s Privacy Certified seals on websites and connected toys. For more information about ESRB Privacy Certified, check out our website and blog. You can also follow us on LinkedIn and Twitter.

Tip #4: Don’t Let Your Children Lie About Their Ages

When companies know that children under the age of 13 are playing their games, they are required by law to follow the federal Children’s Online Privacy Protection Act (COPPA). COPPA and its associated Rule issued by the Federal Trade Commission (FTC) gives parents control over what information companies can collect from kids under 13 years of age through their websites, apps, and other online services, including mobile games. Under COPPA, companies with games, apps, and other services “directed to children” or who know that kids under 13 are using their game must:

1. Notify you of how they use your kid’s information
2. Get your express consent (known as “verifiable parental consent”) before collecting, using, or disclosing your child’s personal information
3. Allow you to review and request deletion of your child’s information.

Under COPPA, a game company can’t condition participation in a game on a child disclosing more information than is necessary. They’re also prohibited from using information for commercial purposes such as targeted marketing and advertising that are unrelated to gameplay. This is part of why it’s so important to make sure you or your kid enters an accurate birthdate or age when signing up for a new game!

Beyond COPPA, recently enacted privacy laws in states like California, Colorado, Connecticut, Utah, and Virginia give kids and their parents additional privacy rights. Some extend certain privacy rights to teens. For example, several of these state laws prohibit companies from selling or sharing teenagers’ (typically ages 13-16) personal information without their consent or the consent of their parent or guardian. You can ask that a mobile game company not sell or share your child’s information by making a request using a form or email address available from the company’s app or website.

Other laws, such as California’s recently-passed Age Appropriate Design Code Act, require companies to set privacy controls in games and other products to the most-protective level for all users under the age of 18.

Make sure your children enter their ages accurately so they can benefit from legal protections tailored to protect kids’ personal information.

Companies that don’t follow these rules can get in a lot of trouble. The FTC and state law enforcers have slammed mobile game companies that failed to comply with COPPA with large fines and other penalties. And more enforcement is likely on the way. Along with our other tips, making sure that your children enter their ages accurately will help ensure that they benefit from legal privacy protections tailored for kids and teens.

Tip #5: Communicate with Your Kids

Our first four tips are privacy-specific while this last one applies to many parenting challenges: Communicate with your kids! Talk with them about what they should know and can do to protect their privacy online. If your kids are young, you can tell them to come to you or simply say no to all in-game requests for information. If your children are older, you can teach them how to use privacy settings and permissions.

You can also educate them in an age-appropriate way about the consequences of sharing too much personal information in a game. These can range from compromising the security of online accounts to attracting cyberbullies to damaging their personal reputation. Let them know that they can come talk to you if they’ve posted something online that they later realize is too personal (you can help them get it deleted) or if they’re receiving inappropriate advertisements, messages, or other communications. (You can report inappropriate ads to Apple and Google.)

Make sure your kids know they can turn to you for help in protecting their personal data and preferences, and that you know where to find answers and advice.

Sometimes, in a rush to play a game, your child might simply click “yes” on permissions, or even falsify their age, but when they understand how their personal data and preferences may be used, or more importantly misused, most kids will become more interested in managing their own privacy online. Make sure they know they can turn to you for help, and that you know where to find answers and advice.
Protecting your kids’ privacy in mobile games may sound overwhelming, but the benefits of playing games far outweigh the risks. Our tips – together with ESRB’s Family Gaming Guide and our “What Parents Need to Know” blogs can help you protect your kids’ privacy online.

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If you have more questions about kids’ privacy in mobile apps or you want to learn more about our program, please reach out to us through our contact page to learn more about our program. Be sure to follow us on LinkedIn for more privacy-related updates.

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As senior vice president of ESRB Privacy Certified (EPC), Stacy Feuer ensures that member companies in the video game and toy industries adopt and maintain lawful, transparent, and responsible data collection and privacy policies and practices for their websites, mobile apps, and online services. She oversees compliance with ESRB’s privacy certifications, including its “Kids Certified” seal, which is an approved Safe Harbor program under the Federal Trade Commission’s Children’s Online Privacy Protection Act (COPPA) Rule.

The post What Parents Need to Know About Privacy in Mobile Games: Five Tips for Your Parenting Toolkit appeared first on ESRB Ratings.

ESRB Privacy Certified – a leading non-profit privacy compliance and certification program – has been following the California law closely. The CAAADC mandates “privacy-by-design,” a concept that is already at the core of ESRB’s program for member video game and toy companies. It will, however, change privacy practices in the U.S. significantly. By way of example, it will:

• Apply to children under the age of 18, a higher age threshold than other federal and state privacy laws in the U.S., which are generally limited to children under the age of 13 or, in limited cases, 16.
• Cover a wide range of businesses that provide online services “likely to be accessed by a minor” even if the business lacks “actual knowledge” that children use the service, which is the current standard under federal law.
• Require businesses to set default privacy settings that offer a “high level” of privacy protection (e.g., setting geolocation and app tracking to off) unless the business can present a “compelling reason” that a different setting is in the best interests of children.

There are also provisions on age verification, data protection impact assessments, data minimization, and more.

California Governor Newsom has until September 30 to sign or veto the bill. Given the unanimous votes in favor of the legislation, in both the California Senate and the Assembly, there’s no indication that a veto is really in play. Assuming it’s not pre-empted by a new federal law or delayed or struck down by a court challenge, the CAAADC will take effect on July 1, 2024.

The CAAADC will be enforced by the California Attorney General and there are hefty fines for non-compliance – civil penalties of up to $7,500 per affected child for intentional violations, and up to $2,500 per affected child for negligent violations. (When a business has substantially complied with threshold requirements of the Act, though, the Attorney General must provide notice and give the business a 90-day period to cure.)

Even though the law’s effective date is nearly two years away, we’re already thinking about how the law will affect video game and toy companies doing business in the U.S. and abroad, and planning for a changed children’s privacy landscape. There are many questions about how the California law, which is likely to become the de facto national standard, will intersect with other privacy laws on the books, such as the Children’s Online Privacy Protection Act (“COPPA”). (COPPA prohibits the collection, use, and sharing of the personal data of children under the age of 13, without verifiable parental consent, by websites, apps, and other online services that are directed to or targeted to children or that have “actual knowledge” that such young people are using their site.) The CAAADC requires the state to establish a task force, which is charged with developing and implementing regulations by April 1, 2024. These regulations may help answer some of these questions.

In the meantime, we will continue to help our members comply with existing laws and adopt and implement best practices for children’s privacy. As an organization, we already recommend that our program members incorporate many of the concepts that will be required by the California law into their privacy programs. As privacy protections for kids and teens continue to evolve, we’ll be following closely and providing guidance on CAAADC, COPPA, and the many other moving parts of the complex children’s privacy landscape.

Stacy Feuer is the Senior Vice President of the Entertainment Software Rating Board Privacy Certified program.  The program is an authorized Safe Harbor under the Federal Trade Commission’s COPPA Rule.

If you have more questions about kids’ privacy and the CAAADC or you want to learn more about our program, please reach out to us through our contact page. Be sure to follow us on LinkedIn for more privacy-related updates.

The post California Passes Landmark “Best Interests of the Child” Privacy Law appeared first on ESRB Ratings.

With so many kids and teens using online games, mobile apps, and related devices and services, Data Privacy Day (January 28) provides a perfect opportunity for parents and caregivers to refresh their privacy game. We at ESRB Privacy Certified – a leading non-profit online and mobile privacy compliance program – have three tips to get you started:

1. Check out COPPA
2. Scan Your Privacy Settings
3. Stay Alert with App Permissions

Before getting to our three tips, though, it’s important to understand how online games collect and use data. When using any devices or service connected to the internet, including games, it’s a given that some data is going to be collected in order to make the product work.

For example, most companies will collect information such as username, email, and IP (Internet Protocol) address. Some will collect data like a user’s age, geographic location, payment information, and communications preferences. Most sites also use “cookies” to store data, which can access a user’s browsing history to help inform ad preferences while remembering some information the next time you visit a site. As users connect gameplay to social media and streaming sites, more data is transmitted to (and collected by) other entities – sometimes automatically.

Today, game companies and related sites may collect more extensive data about user preferences to personalize game experiences and offer more in-game features. But here’s the thing: you can control how such information is collected, shared, and used — especially when it comes to your kids.

TIP #1: Check out COPPA

Fortunately, you’re not alone when it comes to protecting your children’s privacy. The U.S. federal Children’s Online Privacy Protection Act (COPPA) makes it illegal for websites and services (including online video games) that have actual knowledge that a child under the age of 13 is using their site or service to collect personal information from a child without a parent’s permission. (This includes things like name, email address, social security number, and more.) The law also prohibits the sharing of kids’ personal information with third parties without your consent and allows you to review and request deletion of your child’s information. Some states have similar or even more extensive laws. That’s why it’s so important to make sure you and your kids are entering accurate age information when signing up for services (including child accounts on your video game consoles).

How can you know whether a website or mobile app is COPPA-compliant? One way is to look for our Kids’ Privacy Certified Seal, which demonstrates our members’ compliance with our COPPA-integrated program requirements.  (While you’re looking at the Kids’ Seal, you can also learn about our Privacy Certified seal for services intended for a general or more mature audience.)

TIP #2: Scan Your Privacy Settings

Data Privacy Day is a perfect time to review the privacy settings of the browsers, apps, websites and related digitally connected devices, online games, social media and streaming platforms you and your children and teens use. Choosing privacy settings gives you and your family more control over how companies use your personal information online. Most sites have links or FAQs that can help you do this. And, this year, the Stay Safe Online Campaign has put together a list of links to the privacy settings for many popular devices and online services to make it easier for you to reach your favorite site.

And don’t forget about privacy policies. Although privacy policies are often long and complex, many companies are now using short-form policies or summarizing key facts that can help you find out what information is gathered in a game, where it goes, how it gets used, and who to contact if you have a problem or question. You can view an example of a short form privacy policy inside of the ESRB Rating Search App (Android | iOS).

Choosing privacy settings gives you and your family more control over how companies use your personal information online.

Remember, though, it’s not enough to scrutinize your privacy settings only once a year and then forget about them. Many companies change their privacy setting options regularly, so review them periodically. You may also want to evaluate your settings to make sure you’re still comfortable with the settings you previously selected, especially for your kids.

TIP #3: Stay Alert with App Permissions

On Data Privacy Day – and every day – keep track of what your children download onto devices – be it a smartphone, tablet, or computer. Some intrusive applications might want access to seemingly innocuous functions, but odds are a simple game doesn’t need access to something like precise location or your mobile number. If something as simple as a calculator app wants to look at your contacts, that should raise a red flag, especially as child identity theft and other privacy intrusions become more common. Always double check the phone’s settings to see what permissions applications are asking for, and if it’s something inappropriate, you can always deny access or uninstall the app in question.

Click here to join the new Privacy Certified SVP, Stacy Feuer, for a LinkedIn “ask me anything” on all things privacy during #DPD 2022.

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As with most parenting challenges, the best way to protect your kids’ personal information is to stay involved. Talk to your children and teens about the sites and apps they use and the games they play. Discuss what types of information they should and shouldn’t share online. Help them identify safe and trusted websites and apps like those with the ESRB’s Privacy Certified or Kids Certified Seals. And make sure that your kids know they can always come to you with questions and concerns.

Stacy Feuer is the senior vice president of ESRB Privacy Certified (EPC), ensuring that member companies in the video game and toy industries adopt and maintain lawful and responsible data collection and privacy policies and practices for their websites, mobile apps, and online services. Before joining ESRB, Stacy spent more than 21 years as an enforcer and regulator at the Federal Trade Commission, developing deep experience in privacy, advertising, and international issues. She was also a partner in an international litigation firm and clerked for a federal district court judge. 

The post Upping Your Game This Data Privacy Day: Tips for Parents and Caregivers appeared first on ESRB Ratings.