September 17, 2014 / 3:35 PM / 6 years ago

Yelp, TinyCo fined by U.S. for improperly collecting kids' data

WASHINGTON (Reuters) - The popular online review site Yelp and the maker of children’s mobile device apps including Tiny Pets and Tiny Monsters have separately agreed to settle charges that they improperly collected kids’ information online, the U.S. Federal Trade Commission said on Wednesday.

Grade four students work on laptop computers at Monarch School in San Diego, California October 8, 2013. REUTERS/Mike Blake

A U.S. law called the Children’s Online Privacy Protection Act, or COPPA, requires that companies collecting information online about children under age 13 follow a number of steps to ensure that the children’s information is protected.

Under the terms of the settlements, Yelp will pay a $450,000 civil penalty while privately held app developer TinyCo will pay a $300,000 civil penalty.

The FTC alleged that Yelp, between 2009 and 2013, collected personal information from children through the Yelp app without first notifying parents and obtaining their consent.

Several thousand registrants provided a date of birth showing they were under 13 years of age, and Yelp nonetheless collected information from them including name, e-mail address and location, as well as any information that they posted on the site, the agency said.

Yelp also agreed to delete information it collected from consumers who stated they were 13 years of age or younger at the time they registered for the service.

“When this problem was brought to our attention, we fixed it immediately and closed the affected users’ accounts,” Vince Sollitto, Yelp’s vice president for communications, said in a blog post. Yelp “doesn’t promote itself as a place for children,” he added.

Attorney John Feldman at Reed Smith, who was not involved in the case but specializes in advertising issues, said the deciding factor for the FTC was not whether Yelp intended its registration process to act as an age filter.

“The lesson for companies is that where they ask for and get information within the registration process to know whether a user is under-age, the FTC will deem them to have ‘actual knowledge’ that kids are providing personal information,” Feldman said.

Yelp shares were up 0.3 percent in afternoon trading at $76.79.

The FTC’s complaint against TinyCo alleged that the company targeted young children with many of its apps featuring brightly colored animated characters, which made it subject to the COPPA rule.

Many of those apps, which have been downloaded more than 34 million tonnes, included an optional feature that collected e-mail addresses from users, including children younger than age 13.

Reporting by Ros Krasny; Editing by Susan Heavey, Will Dunham and Cynthia Osterman

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