FTC Fine Teaches TikTok The Wrong Lesson

In another lifetime, I was the CMO of a virtual world for kids.

Sign up. Log on. Get your monkey avatar. Decorate your treehouse. Swim in the lagoon.

Within about 10 seconds of thinking about creating the site, we learned about COPPA: the Children’s Online Privacy Protection Act. Created in the year 2000, COPPA is designed to protect kids under the age of 13 from rapacious purveyors of online indulgences.

Any site marketing to young people is required to comply with COPPA, which includes restrictions like getting parental consent before collecting personal information, or not collecting more information than you need.

Two further thoughts on this market:

First, compliance can be difficult. It puts all sorts of friction into the process that UI/UX developers are trained to eliminate. You want sign-up to be as simple and intuitive as possible. You don’t want to interrupt the process to obtain things like verifiable parental consent.



Second, there can be a lot of value in the under-13 market. Plenty of brands would love to get in front of those eyeballs. And you definitely want to be already confirmed as the platform of choice by the time that 14th birthday rolls around.

The desirability of the tween-and-below market explains why Facebook created Messenger for Kids, and why it allegedly turns a blind eye to users under 13.

It’s also why ByteDance has a valuation of $75 billion dollars, in no small part based on the fact that the TikTok video app -- with its huge appeal to tweens and teenagers -- has more than 1 billion downloads.

Theoretically, TikTok isn’t meant to be an app for tweens. It just so happens that tweens love the app. And it just so happens that, up until now, TikTok hasn’t bothered to collect dates of birth on signup — meaning kids of any age had free rein on the site.

All that youth appeal finally landed TikTok in hot water with the Federal Trade Commission, which this week hit the seven-year-old company with the largest fine in COPPA history for illegally collecting personal information from children.

“Largest fine in COPPA history,” sounds pretty dramatic. But the fine was just $5.7 million dollars. Sure, it would be devastating to me to be hit with a $5.7 million fine, but, again, I’m not worth $75 billion dollars.

TikTok will pay. It will change some practices — and them move on. If there’s anything Facebook’s history has shown us, it’s that when you get to a certain size, you stop caring when the FTC hits you with fines, or when you have to make a public apology. You pay your fine or you say you’re sorry -- and then you laugh all the way to the bank.

TikTok may have learned a lesson here, but it’s not, “Beware the FTC.” It’s, “Go for growth at any cost. If you get big enough to get the FTC’s attention, the fine won’t be big enough to matter.”

Truth is, maybe none of it matters. I spoke to Harper Reed, CTO for the Obama campaign, about the TikTok story. Reed thought the whole thing was nonsense: old people making rules for a digital world we know nothing about and understand even less.

“If you show an adult who’s not familiar with TikTok one of these videos they’d be shocked and have a lot of judgment,” he said, “but if you show a young person they’d just be like, ‘Oh yeah, no big deal.’ Us making a big deal of this is like old people back in the day shouting about rock and roll.”

So yeah, that fine won’t hurt TikTok very much. But it’s not the FTC’s fault. Our system is completely unprepared for a mass uprising of content made by 12-year-olds for 12-year-olds.

Forget about the fine. It’s time to radically rehaul the system.

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