Musical.ly (Now TikTok) Agrees to Largest-Ever COPPA Settlement in Record FTC Proceeding

Today, February 27, 2019, the FTC issued the largest civil penalty ever obtained on a children’s privacy case. Musical.ly (now called TikTok) has agreed to pay $5.7 million to settle the Federal Trade Commission's (FTC’s) complaint that the company illegally collected personal information from children. Musical.ly also agreed to comply with Children Online Privacy Protection Act (COPPA) going forward and to take down all videos made by children under the age of 13.

Musical.ly’s platform allowed users to create and post short videos lip-syncing to music, as well as communicate with other users in the social network. All users were required to provide a first and last name, email address, phone number, profile picture, and biography to register for the app. The company had knowledge that a significant portion of its users were under 13 years old.

The FTC learned of the issues when CARU referred the matter to the FTC last spring. In its complaint, the FTC claimed that the company was aware of the fact that many children used its app, but failed to follow COPPA in notifying parents about the app’s collection and use of children’s personal information, obtaining parental consent for such collection, and deleting personal information at the request of parents. The settlement is a big win for child advocacy groups, and addresses the growing concern of children’s privacy protection in the age of Big Tech.

In a joint statement, FTC Commissioner Rohit Chopra and Commissioner Rebecca Kelly Slaughter note that the case was a major milestone for the COPPA enforcement program. The Commissioners noted the company's willingness to pursue growth at the expense of children and the belief that company executives should be held accountable for the disregard of the law.

For more information about the Musical.ly decision, read the FTC's Press Release or the Commissioners joint statement.

Read CARU's Press Release about its referral of the Musical.ly case to the FTC.

See a quote from CARU's director, Dona Fraser in this Wired article.

CARU Speaks at Community Board in Manhattan

CARU staff attorney Andra Dallas gave a presentation to Community Board 1, serving lower Manhattan on Monday, December 7 th . Andra spoke to the Board’s Youth Committee about the importance of teaching children about understanding advertising and safe online practices. District Manager Noah Pfefferblit remarked, “thank you for your informative presentation to our Youth Committee members,” and offered the Board’s assistance if they “can be helpful to the important efforts at the Children's Advertising Review Unit.” Are you interested in having a CARU staff member visit your community board? Contact adallas@caru.bbb.org.

i-Dressup Shuts Down in Wake of Privacy Breach and COPPA Violation

I-Dressup, a fashion-themed social website for teens, has completely shut down as part of a settlement with the New Jersey Department of Consumer Affairs, following a massive privacy breach and violations of the federal Children's Online Privacy Protection Act (COPPA) and New Jersey state law. In September 2016, a hacker sent 2.2 million i-Dressup account credentials to technology blog Arstechnica as well as to haveibeenpwned.com, a searchable online database of data breaches. Responding to the news, New Jersey investigators discovered that 2,519 of the compromised accounts belonged to New Jersey children below age 13. I-Dressup, allegedly aware that it had child users, had violated COPPA by failing to obtain verifiable parental consent prior to collecting and processing personal information from the children, including first and last names and email addresses. In a consent decree with the New Jersey Attorney General Gurbir Gerwal, parent company Unixiz has closed i-Dressup,

Kids Internet Design and Safety Act Seeks to Protect Children from Harmful Online Content

United States Senators, Mr. Richard Blumenthal from Connecticut and Mr. Edward Markey from Massachusetts, introduced a new bill referred to as the Kids Internet Design and Safety Act (the “KIDS Act”). One of the Senator’s introducing the KIDS Act, Mr. Edward Markey, was the co-author of the Children’s Online Privacy Protection Act (“COPPA”). The KIDS Act seeks to include noteworthy advertising rules and create new protections for children online, specifically for online users under the age of 16. The proposed advertising rules within the KIDS Act are to ban websites from: (1) exposing young online users to advertisements “with embedded interactive elements”; (2) recommending any content involving alcohol, nicotine, or tobacco to young online users; and (3) recommending content that includes influencer marketing, like unboxing videos, or host-selling to young online users. Additionally, the KIDS Act seeks to prohibit certain online features to protect children, like prohibiting

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