FTC Updates COPPA FAQs Again – Revisions to Part H Gives App Developers and Parents Welcomed Clarification on Parental Consent

Continuing our Blog’s updates on the Federal Trade Commission’s Frequently Asked Questions (FAQs) to the updated Children’s Online Privacy Protection Act (COPPA) Rule, we highlight that the FTC revised three portions of “Part H” this week, which concern how entities seeking to comply with COPPA may obtain verifiable parental consent. COPPA requires that entities give notice to parents and obtain verifiable parental consent before collecting personal information from children under 13 years of age.  The FTC implements COPPA’s directives via its COPPA Rule, and has been issuing updates to the COPPA Rule FAQs intermittently over the past two years.  In April, the FTC made updates to Part M of the COPPA FAQs to clarify in what circumstances schools can consent to the disclosure of children’s personal information to third-party websites on behalf of their parents, when that information is used for the educational benefit of the students. With its recent changes to sections of Part H of the FAQs, the FTC seeks to expand how websites and mobile apps can obtain verifiable parental consent.  Importantly, the FAQs tentatively ratify the use of data from parents’ credit and debit cards and third parties such as app stores, while adding a brand-new FAQ concerning the liability considerations of a platform if it wants to assist app developers by including verifiable parental consent mechanisms. In its update to FAQ H.5, the FTC suggested that, in certain circumstances, collecting a parent’s credit or debit card number but without charging the parent’s card could satisfy the verifiable parental consent requirements of the COPPA Rule, as long as that collection was done “in conjunction with implementing other safeguards.”  Such other safeguards could include asking the parent additional security questions or having additional ways to contact the parent to verify identity.  Instead, the updated FAQ notes that, while the COPPA Rule lists several methods which automatically meet the verifiable parental consent standard – including collecting the parent’s credit or debit card in conjunction with a monetary transaction – “the listed methods aren’t exhaustive; you may use other methods as long as they are ‘reasonably calculated’” to ensure parental consent. An update to FAQ H.10 clarifies that apps directed to kids can use third parties – such as the app stores available – to get verifiable parental consent, as long as the app developer “ensure[s] that COPPA requirements are being met.”  For instance, the app developer must confirm that the third party used is obtaining parental consent “in a way that is reasonably calculated, in light of available technology, to ensure that the person providing consent is the child’s parent.”  In the FTC’s judgment, a mere username and password used to log into an app store is not enough to count as proper parental consent.  Additionally, app developers who create apps for kids must still give parents direct notice of the developer’s information collecting practices before obtaining parental consent. Finally, the newest FAQ, H.16, considers the COPPA liability of app stores who provide a verifiable parental consent mechanism to app developers using their platform.  The FTC clarified that since app stores are not considered “operators” under COPPA, an app store “will not be liable under COPPA for failing to investigate the privacy practices of the operators for whom you obtain consent.”  The FTC notes that in the COPPA Rule’s Statement of Basis and Purpose it had previously declared that the term “operator” does not include platforms “such as Google Play or the App Store, when such stores merely offer the public access to someone else’s child-directed content.”  However, the new FAQ notes that this doesn’t mean app stores are completely out of the woods, and cautions that they could be liable under Section 5 of the FTC Act if, for example, an app store misrepresents the oversight it provides for child-directed apps. The updates to Part H should be of great benefit to app developers, the online marketplaces they use, and parents in terms of clarifying how verifiable parental consent can be obtained for children-directed technology.  Indeed, ACT: The App Association praised the revisions to Part H as giving “platforms and app makers more guidance in areas where confusion has persisted.”  Moms with Apps meanwhile, applauded the updates as a “major win” for innovation and privacy, and offered that “making it easier for parents to give consent and reducing the burden on developers” are “exactly” what small businesses need to comply with COPPA.