VTech Pays $650k Fine over Kids Data Collection

In the US, the FTC has settled with toy manufacturer VTech Electronics over alleged violations of the Children's Online Privacy Protection Act (COPPA), involving the collection of data from children without verifiable parental consent, by apps within toys.

According to lawyers Winston & Strawn LLP, writing on www.lexology.com , this is the first time the FTC (Federal Trade Commission) has settled with a company over data collection by Internet-connected toys. VTech has agreed to pay a $650,000 fine and implement a comprehensive data security program, which will be subject to independent audits for twenty years.

Among the allegations, the FTC said that although Vtech linked to its privacy policy on the initial app registration page, it failed to post the policy separately in each area of the app where children's information was collected; that the policy failed to include adequate details of the firm's data policies or information about a parent's right to review or delete a child's personal information; and that internal procedures including data safeguards and employee training data security were inadequate.

The FTC, whose approved methods for verifying parental consent include the ChildGuardOnline system developed by MR industry technology firm Imperium, has previously reached COPPA settlements with those collecting data by other means, including Singapore-based mobile ad company InMobi, which coughed up $950k in 2016 after allegedly tracking the locations of hundreds of millions of consumers, including children, without their knowledge or consent - including via 'apps clearly aimed at children', despite promising not to do so and without the consent of parents or guardians.

Four months ago, toymaker Mattel cancelled the launch of another connected device aimed at children, known as 'Aristotle' - this was designed to collect and store data about children's activity, acting as both baby monitor and voice-controlled computer.

Web sites: www.vtech.com and www.ftc.gov .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.