Resolving the FTC’s first complaint against a mobile app developer under the Children’s Online Privacy Protection Act (“COPPA”), W3 Innovations, LLC, a developer of children’s games for the iPhone and iPod touch, has agreed to pay $50,000 to settle allegations that it collected and disclosed the personal information of thousands of children under the age of 13 without first providing parents notice of their children’s privacy practices or obtaining parental consent.

The FTC alleged that several of the mobile apps operated by W3 Innovations, including the Emily’s Girl World app, Emily’s Dress Up app, Emily’s Dress Up & Shop app, and Emily’s Runway High Fashion app, are directed to children under the age of 13.  In addition to collecting and maintaining children’s email addresses, the FTC claimed that the defendants also allowed children to publicly post personal information, including their full names, on message boards in violation of COPPA.

The settlement provides industry guidance on a few of the issues that the FTC raised as part of its 2010 COPPA Rule review and is a reminder that the FTC may decide to resolve some of these issues through enforcement actions rather than through the rulemaking process.  For example, the FTC’s 2010 Notice of Inquiry on COPPA asked for comment on how the definition of “Internet” applies to mobile communications.  The FTC’s complaint clarifies that the FTC believes COPPA is broad enough to cover mobile applications.  The complaint also clearly defined the term “online service” for the first time, stating that W3 Innovations’ mobile apps are “online services” covered by the COPPA rule because they “send and receive information via the Internet.” 

As we blogged about here, the FTC has told industry to expect more enforcement actions against mobile app developers under Section 5 of the FTC Act.  This settlement suggests that the FTC also plans to use its enforcement authority under COPPA to help ensure that mobile app developers fulfill their obligations to protect children’s privacy.