Miniclip, S.A., a Swiss-based company developing online games, recently settled with the Federal Trade Commission over false claim allegations made in connection to the Children’s Online Privacy Protection Act (“COPPA”). In its complaint, the FTC alleged that Miniclip falsely claimed to be a valid member of the Children’s Advertising Review Unit’s (“CARU”) COPPA safe harbor program.
CARU is a self-regulated unit, within the Better Business Bureau, tasked with: (1) “protect[ing] children from deceptive or inappropriate advertising in all media, and (2) [ensuring] that, in an online environment, children’s data is collected and handled in a responsible manner.” CARU works with program members to adhere to various rules, including those required by COPPA. When a business is a member of the CARU safe harbor program, it is deemed to be in compliance with COPPA requirements.
The FTC contended that despite the fact that Miniclip’s membership ended in 2015, Miniclip continued to claim that it participated in the CARU safe harbor program through statements made on its website and Terms and Conditions, such as, “In recognition of our focus on the quality and safety of our content, we have been accepted to join the CARU Kids Privacy Safe Harbor Program and have been certified as COPPA compliant,” and “Miniclip is a Certified Participant of the Better Business Bureau’s, CARU Kids Privacy Safe Harbor Program[.] The information practices of Miniclip.com have been reviewed and meet the standards of the [CARU] Program.”
As a result of the proposed settlement, Miniclip is prohibited from misrepresenting its participation in privacy programs, whether government-sponsored, self-regulated, or part of a standard-setting organization, including CARU. The proposed settlement also imposes several recordkeeping requirements, such as requiring Miniclip to maintain: “accounting records showing the revenues from all goods or services sold; personnel records showing, for each person providing services[;] all records necessary to demonstrate full compliance with each provision of [the settlement]; and a copy of each widely disseminated representation by [Miniclip] regarding [its] participation in any privacy or security program[.]”
As previously reported, the FTC has recognized the rapid changes in technology and the effects those changes have on children’s online activities—requiring it to accelerate its review cycle of the COPPA Rule. Allegations similar to those against Miniclip are surely to continue as its review of the COPPA Rule settles.