Yelp has agreed to pay $450,000 to settle charges that its mobile app collected personal information from children younger than 13, the FTC announced on Wednesday.
The review site also promised to delete data collected from children under 13, as part of the settlement. The FTC accused the company of violating the Children's Online Privacy Protection Act, which prohibits Web site operators from knowingly collecting personal information from minors under 13 without their parents' permission.
Regulators allege that Yelp's mobile app, released in 2009, allowed users to provide a birth date. Yelp's app included a screening mechanism designed to ban users under 13, but the technology didn't work, according to the FTC.
The result was that Yelp collected data from “several thousand” children between April of 2009 and April of 2013, according to the FTC. Yelp said in a blog post that that 0.02% of registered users said they were under 13. Those minors were then able to post information about where they lived, upload photos, “check-in” at local businesses and comment about businesses, per the agency.
The enforcement action demonstrates why businesses need to make sure their technology works as intended, says Gregory Boyd, a partner in the law firm Frankfurt Kurnit Klein & Selz. “It's not enough to have an age-gate,” he says. “You need a functional age-gate.”
Hudson Kingston, legal director at the privacy organization Center for Digital Democracy, added that the case shows that even large companies “are rushing to make mobile apps without building in appropriate safeguards for children.”
He also called it “troubling” that Yelp's fine was only $450,000, given that federal law provides for fines of up to $16,000 per violation. “Yelp not only collected information from children, it published their reviews to anyone who checked the site -- potentially putting child users at further risk in terms of privacy and safety harms,” he said in a statement emailed to Online Media Daily.
The FTC also announced on Wednesday that another company, TinyCo, agreed to pay $300,000 to settle charges that its apps collected email addresses of “tens of thousands” of children. TinyCo develops children's gaming apps like Tiny Village (a game where players raise dinosaurs) and Tiny Monsters (players hatch eggs to breed monsters). One of TinyCo's apps encouraged users to provide email addresses in exchange for free in-game currency, according to the FTC.
Like Yelp, TinyCo also agreed to delete the information it collected from children.