The Federal Trade Commission's new privacy rules for online applications, intended to make it tougher to collect information about children in order to target them with ads, are a mixed bag for app developers.
On the bright side, the government watchdog agency heeded feedback from the industry that strengthening parental consent procedures would be cumbersome while not actually preventing many minors from circumventing verification.
On the downside, from their point of view, developers must now work harder to prevent ad targeting of minors, a responsibility some say should lie with mobile ad networks that access the apps.
"The new rules provide some holiday presents for online companies, but there are some grinches that could be created," said Jules Polonetsky, founder and co-director of the Future of Privacy Forum, a think tank that advocates for the interests of technology companies in public policy discussions.
"We support the commission's efforts to make sure kids aren't behaviorally advertised to, but we do think that for lots and lots of companies there are going to be additional legal fees and compliance obligations."
After a nearly two-year study and public comment period intended to beef up the Children's Online Privacy Protection Act, the FTC on Wednesday announced that it had modified what counted as "personal information" that apps could not collect without parents' permission to include geolocation information, photographs, and videos.
It also offered companies "a streamlined, voluntary and transparent approval process for new ways of getting parental consent" and closed a loophole that allowed "kid-directed apps and Web sites to permit third parties to collect personal information from children through plug-ins without parental notice and consent."
In some cases, third-party information collectors will also have to comply with COPPA
The FTC will also work to beef up data security by requiring "reasonable steps to release children's personal information only to companies that are capable of keeping it secure and confidential."
Lee Rainey, director of the Pew Research Center's Internet and American Life Project, said he expected parents to embrace these new guidelines.
Parents Are Worried
"Our research shows that more parents are concerned about how much information advertisers can learn about their children than are worried about their kids meeting strangers online," Rainey told us. "The younger the child, the more anxious parents are. And their anxieties have increased in the age of apps. It's pretty clear the FTC was responding to these heightened sensitivities, especially as they apply to new data collection channels."
Polonetsky said the FTC had previously expressed interest in increasing the ways children prove that they have their parents' consent to use an app. Many require only a second e-mail address to be included in the sign-up process. One proposal would have required a credit card number be placed on file, which would be an onerous process for developers.
"The final rule, due to an outcry from many companies, was to restore [the status quo]," he said.