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The growth of action sports has largely been fueled by fans under 18, and on-line marketing companies targeting that audience have followed. Whether it’s Quiksilver, Monster Energy Drinks or ESPN X Games, the look and feel of the typical action sports-related website is young, edgy, authentic. Action sports marketers need to be aware, however, of the panoply of laws that regulate marketing to kids, including the federal Children’s Online Privacy Protection Act (COPPA). COPPA prohibits the online collection of personal information from kids under 13 without verifiable parental consent. It’s enforced by the Federal Trade Commission (FTC) and the advertising industry’s self-regulatory forum, the Children’s Advertising Review Unit (CARU).
COPPA applies to commercial websites or online services that are targeted to children under 13 and to general audience websites that knowingly collect information from children under 13. To determine whether a website is targeted to children, the FTC considers several factors including the subject matter, visual or audio content, the age of models on the site, language, and whether advertising on the website is directed to children.
COPPA requires these websites to:
- Post a privacy policy outlining their information collection practices;
- Provide notice to parents of their information collection practices;
- Get prior verified parental consent if the website collects personal information from children under 13;
- Provide access to the information collected and the opportunity to delete such information; and
- Maintain reasonable procedures to protect the confidentiality, security, and integrity of such information.
Most COPPA violations seem to fall into one of three categories: websites that don’t adequately block kids under 13 from using the site; websites that collect personal information from kids under 13 without first obtaining parental consent; and websites that require kids to provide personal information as a condition of playing a game or entering a sweepstakes.
For example, CARU investigated Sports Illustrated Kids, the operator of the Battle MAX website, which was offering a “Take Your Best Shot Sweepstakes.” The print version of Sports Illustrated Kids magazine included a print advertisement for the sweepstakes and an address for the website. CARU was concerned that the sweepstakes registration process allowed children to sign up for an electronic newsletter without parental notification or an opt-out. Also, CARU found that the site contained a link to the Dew Action Sports Tour website, at www.dewactionsportstour.com – a site that collected personally identifiable information, such as full name, street address, email address, etc, from all visitors without prior parental consent, and did not screen for age. After being notified by CARU, Sports Illustrated Kids immediately removed the link to the electronic newsletter and also removed the link to Dew Action Sports Tour.
COPPA applies to individually identifiable information about a child, such as full name, home address, email address, telephone number or any other information that would allow someone to identify or contact the child. COPPA also covers other types of information -- for example, hobbies, interests and information collected through cookies or other types of tracking mechanisms -- when they are tied to individually identifiable information.
Perhaps the most onerous part of complying with COPPA is getting verifiable parental consent before collecting any personal information from kids. There is a sliding-scale for obtaining this consent: how a website obtains the consent depends on how the website uses the child's personal information. If the website uses the information for internal purposes, a less rigorous method of consent is required. However, if the website discloses the information to others, the situation presents greater dangers to children, and a more reliable method of consent is required.
Websites may use email to get parental consent for all internal uses of personal information, such as marketing back to a child based on his or her preferences or communicating promotional updates about site content, as long as they take additional steps to increase the likelihood that the parent has, in fact, provided the consent. For example, websites might seek confirmation from a parent in a delayed confirmatory email, or confirm the parent's consent by letter or phone call.
When websites want to disclose a child's personal information to third parties or make it publicly available (for example, through a chat room or message board), the sliding scale requires them to use a more reliable method of consent, including getting a signed form from the parent via postal mail or fax; accepting and verifying a credit card number in connection with a transaction; taking calls from parents, through a toll-free telephone number staffed by trained personnel; or email accompanied by digital signature. In the case of a monitored chat room, if all individually identifiable information is stripped from postings before it is made public -- and the information is deleted from the operator's records – a website does not have to get prior parental consent.
There are a few other exceptions under COPPA that allow websites to collect a child's email address without getting the parent's consent in advance. These exceptions cover many popular online activities for kids, including contests, online newsletters, homework help and electronic postcards. Prior parental consent is not required when a website collects a child's or parent's email address to provide notice and seek consent; a website collects an email address to respond to a one-time request from a child and then deletes it; or a website collects an email address to respond more than once to a specific request -- say, for a subscription to a newsletter. In that case, the website must notify the parent that it is communicating regularly with the child and give the parent the opportunity to stop the communication before sending or delivering a second communication to a child.
Although an investigation by CARU does not result in fines, the FTC has the authority to impose substantial fines for websites that violate COPPA. The FTC recently announced that Sony BMG Music had agreed to pay a $1,000,000 penalty to settle charges that it violated COPPA. Sony operates hundreds of fan websites and, according to the FTC, many of these sites required users to submit a broad range of personal information, together with date of birth, in order to register for these sites. The FTC also said that Sony collected personal information from at least 30,000 underage children without first obtaining their parents’ consent, and the websites enabled children to create personal fan pages, review artists’ albums, upload photos or videos, post comments on message boards and in online forums, and engage in private messaging. The FTC also said that the Sony websites did not block registrations from kids under 13.
Conclusion
Although action sports companies often search for edginess, when it comes to promoting action sports events, personalities, and merchandise to kids, marketers should be wary of the rules that limit their activities.
Brian R. Socolow is a partner in Loeb & Loeb LLP's sports practice. He represents individuals and organizations in the sports industry in contracts, intellectual property and related matters.
Permission for article reprint has been granted.