Earlier this month, the Attorney General for the State of New York (NYSAG) announced settlement agreements with the operators of several popular websites for the illegal online tracking of children, which violated the Children's Online Privacy Protection Act (COPPA). The website operators agreed to pay a total of $835,000 in fines, comply with, and implement a comprehensive set of requirements and changes.
COPPA, passed by Congress in 1998 and updated in 2013, prohibits the unauthorized collection, use, and disclosure of children’s personal information (e.g., first name, last name, e-mail address, IP address, etc.) on websites directed to children under the age of 13, including the collection of information for tracking a child’s movements across the Internet. The 2013 update expanded the list of personal information items, and prohibits covered operators from using cookies, IP addresses, and other persistent identifiers to track users across websites for most advertising purposes, amassing profiles on individual users, and serving targeted behavioral advertisements.
The NYSAG operated a program titled "Operation Child Tracker," which analyzed the most popular children’s websites for any unauthorized tracking. The analysis found that four website operators include third-party tracking on their websites -- which is prohibited by COPPA -- and failed to properly evaluate third-party companies, such as advertisers, advertising networks, and marketers. The website operators and their properties included Viacom (websites associated with Nick Jr. and Nickelodeon), Mattel (Barbie, Hot Wheels, and American Girl), JumpStart (Neopets), and Hasbro (My Little Pony, Littlest Pet Shop, and Nerf).
Regular readers of this blog are familiar with the variety of technologies and mechanisms companies have used to track consumers online: web browser cookies, “zombie cookies,” Flash cookies, “zombie e-tags,” super cookies, “zombie databases” on mobile devices, canvas fingerprinting, and augmented reality (which tracks consumers both online and in the physical world). For example, the web browser cookie is a small text file placed by a website on a user’s computer which is stored by the user’s web browser. Every time a user visits the website, the website retrieves all cookies files stored by that website on the user’s computer. Some website operators shared the information contained in web browser cookies with third-party companies, such as marketing affiliates, advertisers, and tracking companies. This allows web browser cookies to be used to track a user’s browsing history across several websites.
All of this happens in the background without explicit notices in the web browser software, unless the user configures their web browser to provide notice and/or to delete all browser cookies stored. The other technologies represent alternative methods with more technical sophistication and stealth.
The announcement by the NYSAG described each website operator's activities:
"Viacom operates the Nick Jr. website, at www.nickjr.com, and the Nickelodeon website, at www.nick.com... The office of the Attorney General found a variety of improper third party tracking on the Nick Jr. and Nickelodeon websites. These included:
1. Many advertisers and agencies that placed advertisements on Nick Jr. and Nickelodeon websites introduced tracking technologies of third parties that routinely engage in the type of tracking, profiling, and targeted advertising prohibited by COPPA. Viacom considered several approaches to mitigate the risk of COPPA violations from these third parties, including removing adult advertising from a child-directed section of the Nick Jr. website and monitoring advertisements for unexpected tracking... However, Viacom did not timely take either approach and did not implement sufficient safeguards for its users.
2. Some visitors to the homepage of the Nick Jr. website were served behavioral advertising and tracked through a third party advertising platform Viacom used to serve advertisements. Although Viacom considered the homepage of the Nick Jr. website to be parent-directed, and thus not covered by COPPA, the homepage had content that appealed to children. Under COPPA, website operators must treat mixed audience pages as child-directed..."
"... 26 of Mattel’s websites feature content for young children, including online games, animated cartoons, and downloadable content such as posters, computer desktop wallpaper, and pages for young children to color... The office of the Attorney General found that a variety of improper third party tracking technologies were present on Mattel’s child-directed websites and sections of websites. These included:
1. Mattel deployed a tracking technology supplied by a third party data broker across its Barbie, Hot Wheels, Fisher-Price, Monster High, Ever After High, and Thomas & Friends websites. Mattel used the tracking technology for measuring website metrics, such as the number of visitors to each site, a practice permitted under COPPA. However, the tracking technology supplied by the data broker introduced many other third party tracking technologies in a process known as “piggy backing.” Many of these third parties engage in the type of tracking, profiling, and targeted advertising prohibited by COPPA.
2. A tracking technology that Mattel deployed on the e-commerce portion of the American Girl website, which is not directed to children or covered by COPPA, was inadvertently introduced onto certain child-directed webpages of the American Girl website.
3. Mattel uploaded videos to Google’s YouTube.com, a video hosting platform, and then embedded some of these videos onto the child-directed portion of several Mattel websites, including the Barbie website. When the embedded videos were played by children, it enabled Google tracking technologies, which were used to serve behavioral advertisements.
"... several improper third party tracking technologies were present on the Neopets website, both for logged-in users under the age of 13 and users who were not logged-in. These included:
1. JumpStart failed to configure the advertising platform used to serve ads on the Neopets website in a manner that would comply with COPPA. As a result, users under the age of 13 were served behavioral advertising and tracked through the advertising platform.
2. JumpStart integrated a Facebook plug-in into the Neopets website... Facebook uses the tracking information for serving behavioral advertising, among other things, unless the website operator notifies Facebook with a COPPA flag that the website falls is subject to COPPA. JumpStart did not notify Facebook that the Neopets website was directed to children."
"... several improper third party tracking technologies were present on Hasbro’s child-directed websites and sections of websites. These included:
1. Hasbro engaged in an advertising campaign that tracked visitors to the Nerf section of Hasbro’s website in order to serve Hasbro advertisements to those same users as they visited other websites at a later time, a type of online behavioral advertising prohibited by COPPA known as “remarketing.”
2. Hasbro integrated a third-party plug-in into many of its websites, that allowed users to be tracked across websites and introduced other third parties that engaged in the type of tracking, profiling, and targeted advertising prohibited under COPPA.
It is important to note that Hasbro participated in a safe harbor program. A website operator that complies with the rules of an FTC-approved safe harbor program is deemed in compliance with COPPA. However, safe harbor programs rely on full disclosure of the operator’s practices and Hasbro failed to disclose the existence of the remarketing campaign through the Nerf website."
The terms of the settlement agreements require the website operators to:
- Conduct regular electronic scans for unexpected third party tracking technologies that may appear on their children’s websites. Three of the companies, Viacom, Mattel, and JumpStart will provide regular reports to the office regarding the results of the scans.
- Adopt procedures to evaluate third-party companies before they are introduced onto their children’s websites. the evaluation should determine whether and how the third parties collect, use, and disclose, and allow others to collect, use, and disclose, personal information from users.
- Provide notice to third parties that collect, use, or disclose personal information of users with information sufficient to enable the third parties to identify the websites or sections of websites that are child directed pursuant to COPPA.
- Update website privacy policies with either, a) information sufficient to enable parents and others to identify the websites and portions of websites that are directed to children under COPPA, or b) a means of contacting the company so that parents and others may request such information.
Kudos to the NYSAG office and staff for a comprehensive analysis and enforcement to protect children's online privacy. This type of analysis and enforcement is critical as companies introduce more Internet-connected toys and products classified as part of the Internet of Things (ioT).