In this guest post, Tiffany Samuel and Kim Jackson — members of the Entertainment Law and Web 2.0 class — describe moves by the Federal Trade Commission to update measures aimed at protecting children and their privacy and identities when they go online: 

While the Federal Trade Commission put the Children’s Online Privacy Protection Act in place in 1998 to protect children younger than 13 when they go online, as technologies and their uses evolve at lightening speed and get intertwined with the daily lives of young and old, regulators have given notice that they think it is time to revise existing laws. The FTC says it wants to give parents more help to shield naive youngsters not only from inappropriate materials but also from invasions of their privacy and others’ attempts to profit off their names, locations and identities.

With a brutal economy forcing even more families into situations where both parents must work, supervision of children’s online activities, especially in this day of ubiquitous, mobile smart devices and social media every where, tougher oversight of kids’ cyberspace lives might seem sensible, without controversy or opposition. But as the FTC rule proposals wend their way through congressional and other reviews — the agency has set a November deadline for submissions and comments — it’s possible there may be unintended or unpleasant consequences for Hollywood, video game developers and others in entertainment endeavors.

COPPA  (at 15 U.S.C. §§ 6501–6506, Pub.L. 105-277, 112 Stat. 2581-728, enacted Oct. 21, 1998) applies to commercial websites and online services that target children younger than thirteen and with actual knowledge that underage children are providing information online.  Although section 1302(2)(B) of the Act exempts most nonprofit organizations, the U.S. Supreme Court has ruled that nonprofits operated for the benefit of their members’ commercial activities are subject to FTC regulation and COPPA. The act requires web outlets to get “verifiable parental consent”  before collecting and using information provided by children younger than thirteen; the consent must be based on a “sliding scale” set forth in an FTC regulation that accounts for both how the information is collected and how it will be used.

The commission proposes to modify its rules in five areas: (1)  definitions, including the definitions of “personal information”, which will include geo-locations, and “collection,” (2)  parental notice, (3)  parental consent mechanisms, (4)  confidentiality and security of children’s personal information and (5)  the role of self-regulatory “safe harbor” programs.  Amendments that are to be added to the privacy rules, specifically aimed at children younger than thirteen, include privacy protections for geo-location information about minors. This would include tracking cookies used in behavioral advertising (based on other Web visits).

The proposals also will sweep in measures to regulate facial-recognition technologies and other innovations of special note to those working in the social media sphere, including, potentially the giant in that field: Facebook. Likely to be affected by this change will be video game developers and publishers, especially those who make iPhone games. And as it becomes more and more common for viewers to watch shows and movies on line, the movie and television industries may need to be aware of these changes, too.

A House oversight committee has conducted a hearing in which the FTC proposals were discussed (an excellent recap here from Covington, Burling), with lawmakers indicating early approval, particularly as the members of Congress noted children’s comparative tech savvy these days — and their accompanying, simultaeneous gullibility and need for protection, especially with the many huge changes in technology.

As a point of comparison, the Pew Internet and American Life Project — which does not take public policy positions — previously has sent to the FTC a fascinating document about its extensive research on how we all deal with technology, the net and the array of online options now available. Specifically, Pew researchers have said that 93% of all those ages 12 to 17 are online, 45% of them accessing the internet in a location other than their home, school or library (many by smart phones or other such devices); 55% of those ages 12 and 13 report using social media.

Finally, if anyone doubts that the FTC rules will ensnare entertainment and other enterprises, the agency itself kindly provides a listing of matters involving companies already accused of violations of the existing children’s online protection measures. Please note that this list includes firms such as: Playdom (a $3 million fine in May against the Disney subsidiary over the operations of “virtual worlds,” web sites and video games that collected and disclosed kids’ information)  Sony BMG (a $1 million civil penalty in 2008 over operations of its websites for entertainers popular with kids); W3 Innovations (a $50,000 penalty in August for the developer of iPhone-based apps aimed at youngsters); and yes, let’s not forget Mrs. Field’s and Hershey’s in 2003.