Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Partner

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

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In the wake of the COVID-19 pandemic, children are spending more of their lives in the digital realm, both for education and entertainment purposes—but that doesn’t mean the Federal Trade Commission (FTC) is cutting online operators slack for not complying with the Children’s Online Privacy Protection Act (COPPA). Last week, <a href="https://www.ftc.gov/news-events/press-releases/2020/06/developer-apps-popular-children-agrees-settle-ftc-allegations-it?utm_source=govdelivery" target="_blank" rel="noopener noreferrer">the FTC levied a $4 million penalty against HyperBeard, Inc.</a>, a popular mobile app developer, to settle allegations that HyperBeard integrated third-party ad networks into its child-directed apps in violation of COPPA.(Due to HyperBeard’s inability to pay the full amount, the $4 million penalty will be suspended upon payment of $150,000 by HyperBeard).The <a href="https://www.ftc.gov/system/files/documents/cases/192_3109_hyperbeard_-_complaint.pdf" target="_blank" rel="noopener noreferrer">complaint</a> is notable in that the FTC did not allege that HyperBeard itself collected any personal information from children—rather, the alleged violations centered around the company enabling third parties to collect personal information from children through its service. The fine serves as a warning to online operators that they are strictly responsible for their third-party integrations, even if they themselves do not collect personal information from children. Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, emphasized, “If your app or website is directed to kids, you’ve got to make sure parents are in the loop before you collect children’s personal information. This includes allowing someone else, such as an ad network, to collect persistent identifiers, like advertising IDs or cookies, in order to serve behavioral advertising.”<h4>Background</h4>COPPA generally requires operators of child-directed online services to provide notice and obtain parental consent before collecting—or permitting third parties to collect—personal information from children under 13. In 2013, the FTC amended its rule implementing COPPA to, among other things, expand the definition of “personal information” to include persistent identifiers that collect information about a child’s online activity when that information is used to serve targeted ads to the child. This presents an issue for app developers, such as HyperBeard, looking to monetize their apps through the use of in-app advertising.<h4>HyperBeard’s Apps Were Child-Directed</h4><h5>Kid-Friendly Characters and App Store Descriptions</h5>HyperBeard has publicly offered a number of mobile apps, including BunnyBuns, Clawbert, KleptoCats, and MonkeyNauts (the “Apps”). The Apps were free to download and play but relied on in-app advertising and in-app purchases to generate revenue. The complaint calls out the prominent usage of brightly colored, animated characters in the Apps as evidence that the Apps were child-directed. The complaint further noted that the descriptions for the Apps included adjectives such as “SUPER cute,” “adorable,” and “silly,” which are kid-friendly, and that the Apps are “very simple and easy to play.”<h5>Marketing Practices and Partners</h5>The FTC also pointed to HyperBeard’s marketing as evidence that the Apps were child-directed. For example, the complaint alleges that HyperBeard’s website descriptions for several of its Apps recommended the games to children as well as adults. In addition, HyperBeard promoted its Apps on a kids entertainment website, YayOMG! The YayOMG! reviews for certain Apps focused on how “adorable,” “fun,” and “cute” the games were and recommended the games to the website’s readers. HyperBeard amplified these reviews through the use of “retweets” and “likes” on its Twitter page.<h5>Spin-Off Kids’ Products and Merchandising</h5>Moreover, HyperBeard published books related to two of its Apps—KleptoCats and KleptoDogs. The FTC noted that the books were written by a children’s author and were categorized under “Children’s Books” on an online bookseller’s website, with a suggested age range of 7-10 years and grade level of 2-5. HyperBeard also sold KleptoCats stuffed animals and licensed its characters to other companies to create child-directed products, including a K’Nex block construction set, calendars, posters, stickers, and bookmarks.<h4>Integration of Third-Party Ad Networks</h4>In order to monetize the Apps, HyperBeard integrated numerous third-party ad networks in its Apps. The ad networks used persistent identifiers to collect information about children’s activity over time and across online services, and it targeted ads to those children based on their information. Because HyperBeard allegedly did not provide notice to or obtain verifiable parental consent from parents in connection with the ad networks’ activity, the ad networks’ collection of personal information violated COPPA.Furthermore, the FTC alleged that HyperBeard did not exercise adequate oversight and controls over the ad networks. For example, the FTC alleged that HyperBeard did not inform the ad networks that the Apps were directed to children until after being contacted by FTC staff about the matter. In addition, HyperBeard allegedly failed to properly instruct or contractually require the ad networks to refrain from behavioral advertising in light of the child-directed nature of the Apps. The settlement reinforces the fact that, under COPPA, an online operator is strictly liable for the actions of any third party that collects personal information through the operator’s service.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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It’s 10 p.m. Do You Know What Your Third-Party Integrations Are Doing?

It’s 10 p.m. Do You Know What Your Third-Party Integrations Are Doing?

In the wake of the COVID-19 pandemic, children are spending more of their lives in the digital realm, both for education and entertainment purposes—but that doe

In a move that might be part of a <a href="https://www.sociallyawareblog.com/2019/09/11/general-audience-google-youtube-to-pay-170-million-for-alleged-coppa-violations/" target="_blank" rel="noopener">settlement that YouTube has entered into with the Federal Trade Commission</a>, the video-sharing site said it will <a href="https://www.bloomberg.com/news/articles/2019-08-20/youtube-plans-to-end-targeted-ads-to-kids-to-comply-with-ftc" target="_blank" rel="noopener">ban “targeted” advertisements on videos likely to be watched by children</a>. Because targeted ads rely on information collected about the platform’s users, displaying such ads to children younger than 13 without parental permission violates the Children’s Online Privacy Act (COPPA). Until now, YouTube has avoided banning targeted ads on its primary site, arguing that children should only be using YouTube Kids, a site that is free of targeted ads.Twitter announced plans to change several aspects of its platform. One of the new features that the company is researching would allow users to control who—if anyone—may respond to their tweets. Inspired by Twitter’s desire to give users control over how far their tweets spread, the feature should be available later this year. Read about <a href="https://www.theverge.com/2020/1/8/21056856/twitter-replies-limit-option-compose-screen-beta-app-features-new-ces-2020" target="_blank" rel="noopener">other plans that the platform has in store</a>.In anticipation of the 2020 election, Facebook said it will remove from its platform <a href="https://www.theguardian.com/technology/2018/nov/12/deep-fakes-fake-news-truth" target="_blank" rel="noopener">deep fakes</a>, heavily altered content likely to mislead Facebook’s users.Supporters of <a href="https://www.law.cornell.edu/uscode/text/47/230" target="_blank" rel="noopener">Section 230 of the Communications Decency Act</a>, which protects online platforms from liability for user-generated content, are playing defense again, this time from House Speaker Nancy Pelosi, who wants the statute’s language sheltering web companies from liability stripped from the <a href="https://www.wsj.com/articles/deal-on-u-s-mexico-canada-trade-pact-takes-shape-pelosi-says-11573764500?mod=article_inline" target="_blank" rel="noopener">United States’ trade pact with Mexico and Canada</a>. <a href="https://www.wsj.com/articles/nancy-pelosi-pushes-to-remove-legal-protections-for-online-content-in-trade-pact-11575503157?utm_source=newsletter&ns=prod/accounts-wsj" target="_blank" rel="noopener">Find out why</a>.New York State Governor Andrew Cuomo proposed legislation that would make it a crime for convicted sex offenders to misrepresent themselves online. It also would require sex offenders to disclose to the Division of Criminal Justice Services the screen names they use for each of their social media accounts, dating apps and gaming apps.Tesla chief executive Elon Musk’s tweet using the phrase “pedo guy” to refer to a man who had insulted Musk during a television interview did not amount to defamation, a California federal court jury found. Learn the <a href="https://www.nytimes.com/2019/12/06/business/elon-musk-defamation-verdict.html" target="_blank" rel="noopener">basis of their decision</a>.As we <a href="https://www.sociallyawareblog.com/2019/10/07/a-dating-platforms-alleged-fraud-a-decline-in-the-popularity-of-popularity-metrics-tiktoks-unique-ai/" target="_blank" rel="noopener">reported late last year</a>, in an effort to protect users’ mental health, the social media platform Instagram is phasing out popularity metrics such as “likes.” With such popularity metrics invisible to users, follower engagement—which brands use to determine an influencer’s value—will be demonstrated mostly in the form of comments. Because, on Instagram, comments are largely driven by captions, the quality of captions will be a major factor in determining which influencers continue to be successful on that platform despite the fact that it is primarily visual, <a href="https://www.bbc.com/worklife/article/20191119-why-instagram-captions-are-important" target="_blank" rel="noopener">one columnist argues</a>.Speaking of influencers, eight-year-old Ryan of Ryan’s World makes earning a living as an influencer look easy, having raked in $26 million in 2019 by posting videos like the one of him running around his garden to scoop up plastic eggs with toys inside them. But, <a href="https://www.bbc.com/news/technology-50835222?intlink_from_url=https://www.bbc.co.uk/news/technology&link_location=live-reporting-story" target="_blank" rel="noopener">the BBC</a> reports, Ryan is something of an “outlier,” and “96.5% of YouTubers <a href="https://www.sociallyawareblog.com/2016/05/19/cash/" target="_blank" rel="noopener">don’t make enough</a> from advertising revenue alone to break the US poverty line.” <a href="https://www.bbc.com/news/technology-50835222?intlink_from_url=https://www.bbc.co.uk/news/technology&link_location=live-reporting-story" target="_blank" rel="noopener">Find out the names</a> of the other top-ten highest earning influencers.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

Social Links: YouTube bans some targeted ads; big changes afoot on Twitter; Facebook plans to remove ‘deep fakes’

In a move that might be part of a settlement that YouTube has entered into with the Federal Trade Commission, the video-sharing site said it will ban “targeted”

Social Links: YouTube bans some targeted ads; big changes afoot on Twitter; Facebook plans to remove ‘deep fakes’

Here at Socially Aware we covered a wide range of issues in 2019. We reviewed an opinion reminding us that <a href="https://www.sociallyawareblog.com/2019/03/22/whats-in-a-username/" target="_blank" rel="noopener">user-generated content posted on social media platforms is not necessarily freely available for use in other contexts</a>, and a rare instance of a federal district court holding that <a href="https://www.sociallyawareblog.com/2019/11/04/just-browsing-district-court-finds-browsewrap-agreement-enforceable/" target="_blank" rel="noopener">a browsewrap agreement was enforceable</a>.We also examined some aspects of Internet law in Europe, including the legality of <a href="https://www.sociallyawareblog.com/2019/03/14/cookie-wall-legality-in-the-eu/" target="_blank" rel="noopener">using “cookie walls” in the European Union</a>, and the <a href="https://www.sociallyawareblog.com/2019/05/15/the-eu-copyright-directive-passes-but-member-states-remain-split-on-upload-filters/" target="_blank" rel="noopener">EU Copyright Directive’s impact</a> on content-sharing service providers’ liability for copyright-infringing content.And, as <a href="https://www.sociallyawareblog.com/2018/08/22/section-230-survives-to-fight-another-day-following-california-supreme-court-decision/">we’ve done in past years</a>, we revisited the scope of the “safe harbor” that Section 230 of the Communications Decency Act provides <a href="https://www.sociallyawareblog.com/2019/09/05/safe-harbor-in-section-230-of-the-communications-decency-act-applies-to-wide-variety-of-claims/" target="_blank" rel="noopener">again</a>, <a href="https://www.sociallyawareblog.com/2019/07/17/federal-circuit-holds-that-section-230-locks-out-locksmiths/" target="_blank" rel="noopener">again</a>, and <a href="https://www.sociallyawareblog.com/2019/04/30/appeals-court-upholds-section-230-protections-in-case-against-grindr/" target="_blank" rel="noopener">again</a>.But none of those topics—except the CDA’s Section 230—are on our list of the top-ten most read articles of 2019. Here are the pieces that made the cut:<ol><li><a href="https://www.sociallyawareblog.com/2019/09/11/general-audience-google-youtube-to-pay-170-million-for-alleged-coppa-violations/" target="_blank" rel="noopener">The Company Who Cried “General Audience”: Google and YouTube to Pay $170 Million for Alleged COPPA Violations</a></li><li><a href="https://www.sociallyawareblog.com/2019/04/05/how-to-comply-with-the-revised-ephemeral-messaging-provision-in-the-fcpas-corporate-enforcement-policy/" target="_blank" rel="noopener">How to Comply with the Revised Ephemeral-Messaging Provision in the DOJ’s Corporate Enforcement Policy</a></li><li><a href="https://www.sociallyawareblog.com/2019/08/02/by-winning-motion-to-dismiss-supermodel-loses-chance-to-clarify-whether-she-can-lawfully-post-photos-of-herself-to-social-media/" target="_blank" rel="noopener">By Winning Motion to Dismiss, Supermodel Loses Chance to Clarify Whether She Can Lawfully Post Photos of Herself to Social Media</a></li><li>Will the Music Industry Continue To Win Its Copyright Battle Against ISPs?</li><li><a href="https://www.sociallyawareblog.com/2019/03/06/copyright-infringement-on-user-generated-platforms-when-is-the-platform-provider-liable-for-damages/" target="_blank" rel="noopener">Time to Hit Pause: Copyright Infringement on User-Generated Platforms – When Is the Platform Provider Liable for Damages?</a></li><li><a href="https://www.sociallyawareblog.com/2019/08/20/the-meme-generation-social-media-platforms-address-content-curation/" target="_blank" rel="noopener">The Meme Generation: Social Media Platforms Address Content Curation</a></li><li><a href="https://www.sociallyawareblog.com/2019/07/23/court-holds-that-arbitration-clause-in-hybridwrap-terms-is-unenforceable/" target="_blank" rel="noopener">Court Holds That Arbitration Clause in “Hybridwrap” Terms Is Unenforceable</a></li><li><a href="https://www.sociallyawareblog.com/2019/10/09/insta-mural-infringement-public-art-in-instagram-ad-leads-to-copyright-claim/" target="_blank" rel="noopener">Insta-Mural Infringement: Public Art in Instagram Ad Leads to Copyright Claim</a></li><li><a href="https://www.sociallyawareblog.com/2019/06/27/california-court-finds-section-230-protects-decision-to-suspend-and-ban-twitter-account/" target="_blank" rel="noopener">California Court Finds Section 230 Protects Decision to Suspend and Ban Twitter Account</a></li><li><a href="https://www.sociallyawareblog.com/2019/09/17/ninth-circuits-linkedin-decision-does-not-greenlight-the-unauthorized-web-scraping-of-public-websites/" target="_blank" rel="noopener">Ninth Circuit’s LinkedIn Decision Does Not Greenlight the Unauthorized Web Scraping of Public Websites</a></li></ol>

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2019: Our Greatest Hits

Here at Socially Aware we covered a wide range of issues in 2019. We reviewed an opinion reminding us that user-generated content posted on social media platfor

2019: Our Greatest Hits

Last week, the Federal Trade Commission made clear that child-directed parts of an otherwise general audience service will subject the operator of the service to the <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/childrens-online-privacy-protection-rule" target="_blank" rel="noopener">Children’s Online Privacy Protection Act</a> (COPPA).Just six months after the FTC’s record-setting settlement against TikTok, the FTC <a href="https://www.ftc.gov/news-events/press-releases/2019/09/google-youtube-will-pay-record-170-million-alleged-violations?utm_source=govdelivery" target="_blank" rel="noopener">announced</a> a $170 million fine against Google and its subsidiary YouTube to settle allegations that YouTube had collected personal information from children without first obtaining parental consent, in violation of the FTC’s rule implementing COPPA. This $170 million fine—$136 million to the FTC and $34 million to the New York Attorney General, with whom the FTC brought the enforcement action—dwarfs the $5.7 million levied against TikTok earlier this year. It is by far the largest amount that the FTC has obtained in a COPPA case since Congress enacted the law in 1998. The settlement puts operators of general-audience websites on notice that they are not automatically excluded from COPPA’s coverage: they are required to comply with COPPA if particular parts of their websites or content (including content uploaded by others) are directed to children under age 13.BackgroundThe COPPA Rule requires operators of child-directed websites and online services to provide notice and obtain parental consent before collecting personal information from children under 13. The <a href="https://www.ftc.gov/news-events/press-releases/2013/07/revised-childrens-online-privacy-protection-rule-goes-effect" target="_blank" rel="noopener">COPPA Rule was amended in 2013</a> to, among other things, expand the definition of “personal information” to include persistent identifiers that collect information about a user’s online activity and use that information to serve targeted ads to the user.Allegations in the ComplaintAccording to the <a href="https://www.ftc.gov/system/files/documents/cases/youtube_complaint.pdf" target="_blank" rel="noopener">complaint</a>, Google and YouTube allegedly used persistent identifiers, in the form of cookies and mobile-advertising identifiers, to collect personal information from, and track, viewers of child-directed YouTube channels across the internet without first notifying parents and obtaining their consent as required by COPPA. YouTube allegedly earned millions of dollars from using the information collected through these identifiers to deliver targeted ads to the viewers of child-directed channels and content.<ul><li>Marketing Statements</li></ul>While YouTube claimed to be a general-audience website, the FTC alleged that YouTube knew that its platform had numerous child-directed channels. The complaint cites several presentations to popular children’s brands in which YouTube marketed itself as a top destination for kids. For example, a YouTube presentation to the toymaker <a href="https://www.reuters.com/article/google-ftc/googles-youtube-to-pay-170-million-penalty-for-collecting-data-on-kids-idUSL2N25V0CT?feedType=RSS&feedName=companyNews" target="_blank" rel="noopener">Mattel stated</a> that “YouTube is today’s leader in reaching children age 6-11 against top TV channels,” and a presentation to Hasbro touted that “YouTube was unanimously voted as the favorite website for kids 2-12” and was the “#1 website regularly visited by kids.” At the same time, and notwithstanding these representations to toy companies, YouTube allegedly took the position that it did not need to comply with COPPA. For example, the complaint alleged that a YouTube employee wrote to an advertising company that YouTube did not have users under the age of 13 on the platform and that, as a general-audience platform, YouTube did not need to comply with COPPA.<ul><li>Actual Knowledge</li></ul>The complaint further alleged that YouTube had actual knowledge that it collected personal information from children, based on YouTube’s content-rating system and the “YouTube Kids” app. First, YouTube had a practice of rating all channels and videos uploaded to its platform with ratings of, among others, Y (generally intended for ages 0-7), G (intended for any age), and PG (generally intended for ages 10+); however, from an information collection and behavioral advertising perspective, YouTube allegedly did not treat Y-rated channels or videos any differently than it did other content on YouTube. Specifically, YouTube allowed channel owners to monetize Y-rated content and earn revenue from targeted advertising on Y-rated videos.Second, the “YouTube Kids” app, aimed at children 2-12, generally drew from YouTube content rated Y or G on an automated basis. YouTube employees also manually reviewed content to appear on the home screen of YouTube Kids. Despite YouTube’s identification of content for YouTube Kids, the same content remained on the normal YouTube platform and used persistent identifiers for targeted advertising. In contrast, when the videos were viewed on YouTube Kids, persistent identifiers were not used. The complaint alleged that this disparity in treatment of the same child-directed content evinced YouTube’s knowledge that personal information was collected from children on its general-audience platform.<ul><li>Operator of a Child-Directed Online Service</li></ul>The complaint listed myriad examples of YouTube channels that were allegedly “directed to children” under the COPPA Rule, to show that YouTube was an operator of a child-directed online service and therefore subject to COPPA.Assessing several channels against the COPPA Rule’s factors for determining whether a site is “child-directed” (i.e., subject matter, visual content, language, use of animated characters, or child-oriented activities and incentives), the FTC alleged that “numerous channels on YouTube have content directed to children under the age of 13.” Over five pages, the complaint went on to describe several child-directed channels, including, for example, Mattel’s channels (e.g., Barbie, Hot Wheels), CookieSwirlC (a popular children’s unboxing channel), and Little Baby Bum (a popular channel showing videos of well-known nursery rhymes).Relief Imposed by the OrderIn addition to the monetary penalty, <a href="https://www.ftc.gov/system/files/documents/cases/172_3083_youtube_coppa_consent_order.pdf" target="_blank" rel="noopener">the settlement</a> requires Google and YouTube to develop, implement, and maintain a system that permits channel owners to identify child-directed content so that YouTube can ensure that it is complying with COPPA. YouTube must also notify channel owners that their child-directed content may be subject to the COPPA Rule’s obligations and provide annual training about COPPA compliance to employees who interface with YouTube channel owners. The settlement also requires YouTube to comply with the COPPA Rule by, for example, providing notice of its information practices and obtaining verifiable parental consent. In addition, the settlement imposes reporting and recordkeeping obligations.The FTC voted 3-2 to authorize the stipulated consent decree. Notably, the two dissenting Commissioners dissented on the grounds that the settlement did not sufficiently punish Google and YouTube, arguing that the FTC should have sought even greater injunctive and monetary relief. Commissioner Rebecca Kelly Slaughter <a href="https://www.ftc.gov/public-statements/2019/09/statement-commissioner-rebecca-kelly-slaughter-regarding-youtube" target="_blank" rel="noopener">advocated the imposition of a technological backstop on Google’s and YouTube’s policing of YouTube’s channels and content</a>, and Commissioner Rohit Chopra <a href="https://www.ftc.gov/public-statements/2019/09/statement-commissioner-rohit-chopra-regarding-youtube" target="_blank" rel="noopener">criticized the settlement amount and injunctive remedies as “not even significant enough to make Google issue a warning to its investors</a>.”TakeawayWith this record-breaking settlement following so close on the heels of the <a href="https://www.ftc.gov/news-events/press-releases/2019/09/google-youtube-will-pay-record-170-million-alleged-violations?utm_source=govdelivery" target="_blank" rel="noopener">previous record-breaking settlement</a>, federal and state regulators are showing a willingness to more aggressively pursue COPPA violations. In fact, the split vote for this consent decree suggests that certain regulators prefer an even more aggressive approach than has been seen to date. In conjunction with the FTC’s early review of the COPPA Rule, in which the FTC has solicited comments on how to encourage general-audience sites to proactively protect children’s privacy, it seems that regulators are increasingly focused on protecting children’s privacy in a world where the distinction between “child-directed” and “general-audience” is blurred.As children’s use of technology keeps pace with technological advancements, companies operating online should be mindful of what content is posted on their sites and regularly evaluate their obligations, if any, under COPPA: They are required to comply with COPPA if particular parts of their websites or content (including content uploaded by others) are directed to children under age 13.

The Company Who Cried “General Audience”: Google and YouTube to Pay $170 Million for Alleged COPPA Violations

Last week, the Federal Trade Commission made clear that child-directed parts of an otherwise general audience service will subject the operator of the service t

The Company Who Cried “General Audience”: Google and YouTube to Pay $170 Million for Alleged COPPA Violations

Advancements in technology appear to have spurred the Federal Trade Commission to initiate a review of its rule promulgated pursuant to the Children’s Online Privacy Protection Act (the “COPPA Rule” or “Rule”) four years ahead of schedule. Last week, the FTC published a Federal Register <a href="https://www.govinfo.gov/content/pkg/FR-2019-07-25/pdf/2019-15754.pdf" target="_blank" rel="noopener">notice</a> seeking comments on the Rule. Although the FTC typically reviews a rule only once every 10 years and the last COPPA Rule review ended in 2013, the Commission unanimously voted 5-0 to seek comments ahead of its next scheduled review. The Commission cited the education technology sector, voice-enabled connected devices, and general audience platforms hosting third-party, child-directed content as developments warranting reexamination of the Rule at this time.BackgroundThe COPPA Rule, which first went into effect in 2000, generally requires operators of online services to obtain verifiable parental consent before collecting personal information from children under the age of 13.  In 2013, the FTC amended the COPPA Rule to address changes in the way children use and access the internet, including through the increased use of mobile devices and social networking.  Its amendments included the expansion of the definition of “personal information” to include persistent identifiers that track online activity, geolocation information, photos, videos, and audio recordings. The new review could result in similarly significant amendments.Questions for Public CommentIn addition to standard questions about the effectiveness of the COPPA Rule and whether it should be retained, eliminated, or modified, the FTC is seeking comment on all major provisions of the Rule, including its definitions, notice and parental consent requirements, exceptions, and security requirements.The Federal Register notice poses 29 wide-ranging questions for public comment, including:<ul><li>Should general audience platforms that have large numbers of child users be subject to the COPPA Rule?  In other words, should the COPPA Rule be amended to address online services that do not meet the current definition of “web site or online service directed to children” but that have large numbers of child users?</li><li>Should the COPPA Rule be modified to encourage general audience platforms to identify and police child-directed content uploaded by third parties? For example, should such platforms be able to rebut the presumption that all users interacting with child-directed content are children, thereby allowing them to collect personal information from users who are 13 or older?</li><li>Should the COPPA Rule expressly address behavioral targeting, profiling, and advertising? Information processing to support the internal operations of an online service is exempt from the Rule’s parental consent obligation. Should “support for internal operations” be modified to (1) expressly exclude practices such as behavioral targeting and profiling or (2) add certain permitted activities, such as advertising attribution?</li><li>Should the definition of “personal information” be expanded? Presumably to keep pace with the rise of “big data” and the collection of biometric information, the Commission asks whether the definition should be expanded to include personal information that is inferred about, but not directly collected from, children and biometric information (e.g., fingerprints, retinal patterns).</li><li>Should the COPPA Rule be more specific about the appropriate methods for determining the age of users? In other words, would additional guidance regarding age screening result in stronger protections for children’s privacy?</li><li>Should methods of obtaining verifiable parental consent be added to or removed from the Rule?</li><li>Should there be additional exceptions to prior parental consent? The FTC is particularly interested in comments on exceptions for (1) the use of education technology, where the school provides consent for the collection of personal information from children, and (2) the collection of audio files containing a child’s voice as a replacement for text, where the audio files are promptly deleted.</li><li>Should the Rule include more specific information security requirements, such as requiring encryption of certain personal information?</li><li>What are the implications for COPPA enforcement raised by technologies such as interactive television, interactive gaming, or other similar interactive media?</li></ul>The FTC’s questions evince awareness of technological developments since the FTC’s last review in 2013 and reflect a concern for how to apply COPPA protections when children under 13 are increasingly agile with technology and may visit websites and online services that are targeted to a general audience. The questions further evidence the Commission’s exploration of how to employ modern technological capabilities in COPPA compliance, including through up‑to-date solutions for age screening and information security. Ultimately, the FTC’s notice shows the FTC’s continued commitment to children’s privacy matters, suggesting more frequent review of the COPPA Rule if necessary to keep pace with technological advances and potentially increased activity in this sphere.How to Submit a CommentComments can be submitted on or before October 23, 2019. Comments may be submitted online at <a href="https://www.regulations.gov/" target="_blank" rel="noopener">https://www.regulations.gov</a> or sent by mail to the address listed in the Federal Register notice.The FTC will hold a <a href="https://www.ftc.gov/news-events/events-calendar/future-coppa-rule-ftc-workshop" target="_blank" rel="noopener">public workshop</a> on October 7, 2019, to examine the COPPA Rule.The FTC’s press release announcing the request for public comment is available <a href="https://www.ftc.gov/news-events/press-releases/2019/07/ftc-seeks-comments-childrens-online-privacy-protection-act-rule?utm_source=govdelivery" target="_blank" rel="noopener">here</a>.

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Back to School Early: FTC Seeks Comments to COPPA Rule Ahead of Schedule

Back to School Early: FTC Seeks Comments to COPPA Rule Ahead of Schedule

Advancements in technology appear to have spurred the Federal Trade Commission to initiate a review of its rule promulgated pursuant to the Children’s Online Pr

<a href="http://gothamist.com/2019/02/28/revenge_porn_ny_law.php" target="_blank" rel="noopener">New York is now one</a> of the <a href="https://www.cybercivilrights.org/revenge-porn-laws/" target="_blank" rel="noopener">43 states where “revenge porn,”</a> the posting of explicit photographs or videos to the Internet without the subject’s consent, is punishable by law. See how far the states have come – find out how many had criminalized revenge porn as of 2014, <a href="https://www.sociallyawareblog.com/2014/01/29/keeping-privates-private-the-legal-landscape-of-revenge-porn/" target="_blank" rel="noopener">when Socially Aware first covered the issue</a>.YouTube announced that it will not allow channels that promote anti-vaccination videos to run advertisements because such videos violate the platform’s policy, which, among other things, disallows the monetization of “dangerous content.” Many of the companies whose ads appeared alongside anti-vaccination content say they were not aware it was happening. <a href="https://www.buzzfeednews.com/article/carolineodonovan/youtube-just-demonetized-anti-vax-channels" target="_blank" rel="noopener">Find out how that could be possible</a>.Senator John Kennedy (R-LA) has introduced<a href="https://www.kennedy.senate.gov/public/_cache/files/9/f/9ff92982-1a58-4cf5-9bda-8530e5078224/2D6F1D231B87F5B281A01893CEAA75DF.sil19328-own-your-own-data-.pdf" target="_blank" rel="noopener"> a bill that would give Internet users considerably more control over their personal data</a> by mandating that social media companies inform registrants—in simple, easy-to-understand terms—that they are entering into an agreement licensing their personal data to the company. Coined the Own Your Own Data Act, the legislation would also require social media platforms to make it easy for their registrants to cancel the licensing agreement and obtain the collected data and any analysis of it.Another privacy bill, this one proposed by Senators Ed Markey (D-MA) and Josh Hawley (R-MO), would amend the <a href="https://www.sociallyawareblog.com/2019/03/08/thank-you-next-enforcement-music-video-app-violates-coppa-will-pay-5-7-million/" target="_blank" rel="noopener">Children’s Online Privacy Protection Act</a> (COPPA) to completely prohibit the running of targeted advertisements on websites targeted to children. Find out <a href="https://www.engadget.com/2019/03/12/senate-markey-hawley-children-privacy-bill/" target="_blank" rel="noopener">how else the bill would amend COPPA, and how long companies would have to comply</a> with the amendment if it became law.The debate over <a href="https://www.postandcourier.com/opinion/courts-right-to-side-with-free-speech/article_4d227fa0-45d6-11e9-9b21-cf4244cb43d3.html" target="_blank" rel="noopener">whether politicians have a right to block people on social media</a> rages on.The United States isn’t the only country whose <a href="https://www.economist.com/the-americas/2019/03/16/jair-bolsonaro-brazils-president-is-a-master-of-social-media" target="_blank" rel="noopener">president favors social media</a> as a vehicle for sharing his views.A <a href="https://abovethelaw.com/2019/03/twitterlaw/" target="_blank" rel="noopener">#TwitterLaw symposium</a> is being held at the University of Idaho College of Law next month. Road trip, anyone?Even the <a href="https://www.harpersbazaar.com/celebrity/latest/a26621439/royal-family-social-media-guidelines/" target="_blank" rel="noopener">British Royal Family has to contend with social media trolls</a>.

YouTube disallows ads on anti-vax content; privacy bills aim to extend children’s protections from Internet harm, secure users’ control over data

New York is now one of the 43 states where “revenge porn,” the posting of explicit photographs or videos to the Internet without the subject’s consent, is punis

YouTube disallows ads on anti-vax content; privacy bills aim to extend children’s protections from Internet harm, secure users’ control over data

The cost for violating the Children’s Online Privacy Protection Act (COPPA) has been steadily rising, and companies subject to the law should take heed. Last week, the Federal Trade Commission (FTC) announced a record-setting $5.7 million settlement with the mobile app company Musical.ly for a myriad of COPPA violations, exceeding even the December 2018 $4.95 million COPPA settlement by the New York Attorney General. Notably, two Commissioners issued a statement accompanying the settlement, arguing that the FTC should prioritize holding executives personally responsible for their roles in deliberate violations of the law in the future.COPPA is intended to ensure parents are informed about, and can control, the online collection of personal information (PI) from their children under age thirteen. Musical.ly (now operating as “TikTok”) is a popular social media application that allows users to create and share lip-sync videos to popular songs. The FTC cited the Shanghai-based company for numerous violations of COPPA, including failure to obtain parental consent and failure to properly delete children’s PI upon a parent’s request.COPPA Clearly Applied to the Musical.ly AppCOPPA applies to an operator of a website, mobile application, or other online service that either (1) is directed to children under thirteen, or (2) has actual knowledge that it collects PI from children under thirteen. According to the <a href="https://www.ftc.gov/system/files/documents/cases/musical.ly_complaint_ecf_2-27-19.pdf" target="_blank" rel="noopener">FTC complaint</a>, Musical.ly satisfied both prongs. First, citing the factors set forth in the FTC’s COPPA Rule for determining whether an online service is directed to children, the FTC charged that the Musical.ly app was “directed to children” because it targeted children “as one audience.”  Specifically, a large portion of users were underage, the app had song categories like “Disney” and “School,” and the app was used by celebrities who are popular with tweens. The FTC further stated that the “core activity of the app” – creating lip-sync videos – is a “child-oriented activity.”That final point may arguably be a stretch. (Who doesn’t love karaoke?) But the FTC also accused Musical.ly of having actual knowledge of its users’ ages. The company received thousands of complaints from parents whose children used the app without their consent, and merely perusing the user profile pages and photos (many of which featured a user’s self-reported age, birthdate, or school) would reveal that many users were underage.  Finally, in 2016, the company was made aware that many of its most “followed” users were under thirteen.What Not to Do When You’re Subject to COPPAThe FTC complaint details the myriad ways in which Musical.ly allegedly failed to comply with COPPA, and companies should take care not to mirror any of its mistakes.The company allegedly failed to both obtain parental consent before collecting PI from children and post appropriate notices of its practices with respect to its collection of PI from children. Thousands of parents complained to the company that they were never asked for consent before their children signed up. From the app’s launch in 2014 until July 2017, Musical.ly did not request the age of its users, but it did require users to enter a short bio and submit their email, phone number, first and last names, and a photo.  After July 2017, the company screened new users for age, but it did not confirm the age of existing users, nor did it seek parental consent for profiles clearly belonging to children under thirteen.As reflected in complaints received by the company, the lack of parental notice and consent appalled many parents, particularly given how the application permitted the disclosure of PI.  In addition to enabling children to publicly share videos of themselves, all user profiles were by default set to “public,” while “private” profiles hid only a user’s uploaded videos (that is, the “private” user’s profile and contact information were still viewable). By default, any user could directly message any other user, leading to reports of adults contacting minors. Moreover, up until 2016, the app collected geolocation, which it used to display a list of other users within a 50-mile radius of the user (with whom the user could then interact).The company also allegedly violated COPPA’s data deletion and retention obligations: if a parent contacted Musical.ly to close his or her child’s account, Musical.ly would close the account but not delete the child’s videos or profile information from its servers. As the <a href="https://classdismissed.mofo.com/ftc/dont-forget-to-hit-delete-ftc-blog-post-clarifies-coppa-information-deletion-requirement/" target="_blank" rel="noopener">FTC recently reminded businesses</a>, COPPA requires deletion of children’s PI if the information no longer serves the purpose for which it was collected.A Record-Setting Settlement Means “Think Twice About COPPA”Given the number of missteps by Musical.ly, it may not be surprising that the company ultimately agreed to a record-setting $5.7 million <a href="https://www.ftc.gov/system/files/documents/cases/musical.ly_proposed_order_ecf_2-27-19.pdf" target="_blank" rel="noopener">settlement with the FTC</a>. The company agreed to delete the PI of children under thirteen lacking the required parental consent, and it is now subject to a multi-year consent order that imposes a variety of compliance, reporting, and recordkeeping obligations on it.In the FTC’s own <a href="https://www.ftc.gov/news-events/blogs/business-blog/2019/02/largest-ftc-coppa-settlement-requires-musically-change-its?utm_source=govdelivery" target="_blank" rel="noopener">blog post describing the settlement</a>, companies were warned to “think twice before concluding ‘We’re not covered by COPPA.’” Indeed, the Musical.ly case highlights the many ways in which a consumer-facing service might be subject to the law. The settlement also closely follows on a $4.95 million COPPA settlement from the New York Attorney General, potentially signaling an upwards trend in COPPA settlement appetite by regulators. Even the $5.7 million settlement with Musical.ly likely represents a mere fraction of the company’s total potential liability under COPPA: the FTC is authorized to seek up to approximately $40,000 per violation (i.e., per child) in civil penalties (in addition to injunctive relief) for violations of COPPA.The two Democrat Commissioners also <a href="https://www.ftc.gov/enforcement/cases-proceedings/172-3004/musically-inc" target="_blank" rel="noopener">issued a public statement </a>suggesting that the Musical.ly settlement should have gone even further. Commissioners Slaughter and Chopra argue that the FTC should move away from the status quo, where individuals at companies largely avoid personal liability for grievous violations of the law, and hold individuals personally liable if they “made or ratified decisions to knowingly violate the law.” The statement was not specifically limited to COPPA.  While such an expansion of enforcement may be unlikely to occur during the administration of the current Republican-led FTC, the Commissioners’ statement serves as a useful reminder to all companies: effective privacy compliance starts at the top of any organization.

Thank You, Next Enforcement: Music Video App Violates COPPA, Will Pay $5.7 Million