IQ News: FTC To Examine Kids’

Privacy Protection
The Federal Trade Commission will consider a plan to impose more stringent parental notification rules on commercial Web sites that collect personal information from kids and then sell that data to a third party. The issue was raised at an FTC workshop last week to discuss what methods should be used to contact parents under the Children’s Online Privacy Protection Act, which became law last year. The FTC will issue final rules in October.
“It is an interesting idea and I am sure we will evaluate it very carefully,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. Bernstein said the FTC must determine if the proposal, called a “sliding scale” plan, is too complex to administer and whether it meets statutory guidelines.
FTC officials heard from industry leaders, who favor flexible, simple methods of notifying parents, such as e-mail, and from consumer groups who want tougher rules to protect children. Industry reps said the sliding scale proposal would satisfy the intent of Congress, which requires Web sites to make “any reasonable effort” to obtain verifiable consent from parents.
The idea is that giving parents notice through e-mail and allowing them to opt out is a sufficient method that would not impose heavy burdens on electronic commerce.
“Parents want and appreciate notice as long as it is as simple as possible,” said John Kamp, a senior vice president with the American Association of Advertising Agencies.
Consumer groups such as the Center for Media Education are concerned that Web sites can gather data by sending an e-mail to parents without ever actually obtaining permission. They propose that sites be required to get verifiable parental consent by mail or fax first.
A survey of 80 popular children’s Web sites, conducted by CME–and disputed by industry leaders–found that 88 percent of the sites collect personal information from kids, but more than a quarter post no privacy policies. The survey also found that less than 26 percent of the sites attempt to get permission from parents first and less than 3 percent use methods to collect the data that are consistent with the law.
“These findings underscore the urgent need for clear and effective rules to protect children’s privacy online,” said Kathryn Montgomery, president of CME.
Industry leaders questioned the less than 3 percent figure released by CME, arguing that the survey did not include sites that contacted parents through e-mail.