COPPA means Privacy for Children

The Federal Trade Commission (FTC) collected it largest fine to date for a privacy violation of the Children's Online Privacy Protection Act (COPPA) Wednesday when UMG Recordings agreed to pay $400,000 to settle civil charges brought by the watchdog agency. In a separate civil settlement, Bonzi Software, distributor of the BonziBuddy software, agreed to pay $75,000 in the first COPPA case to challenge the information collection practices of an online service in connection with a software product. Previous COPPA cases have addressed only Web site operators' information collection practices. can lead to fines of $15,000 for non-compliance PER VIOLATION. Sites that collect information from children under 13 are required by the Federal Trade Commission (FTC) to get "verifiable parental permission" before collecting ANY information from kids.

The approach adopted recently by many online businesses doing the CYA dance to avoid hefty fines imposed by the FTC for COPPA compliance violations is to "lock-out" children under 13 from all accounts.

Online privacy and safety for children is advanced significantly by COPPA, but because there are few obvious solutions to the protection of data collected online (witness DoubleClick debacle recently) massive "free" services (like Hotmail) find themselves facing fines for sharing information with third party advertisers about children.

So far, the answer has been to "dump the kids" from those online services that don't cater specifically to children. Those small businesses that count on kids for major portions of their audience, like game sites and homework services could quickly be put out of business by the law.