Big COPPA problems for TinyCo

TinyCo just settled a Federal Trade Commission lawsuit alleging the company violated the Children’s Online Privacy Protection Act (COPPA) Rule.

One interesting allegation: In exchange for in-app currency to buy game enhancements, TinyCo encouraged kids to turn over their email addresses, but the company didn't get parental permission as required by COPPA. TinyCo offers a number of kid-directed apps through popular app stores. For example, users of Tiny Pets could “Help your best friend Sully the Dog save the pets of TinyLand from the evil Duke Spendington. Hide them in your tree house by building homes for them.” (Darn that Duke Spendington!) The apps are free and have been downloaded millions of times, but users can make in-app purchases to enhance game play. TinyCo didn’t live up to its legal responsibilities, illegally collecting children’s addresses without their parents’ permission in exchange for game goodies. Users of TinyCo apps were encouraged to turn over their email “for information and promotions,” a practice the FTC says also violated COPPA. As a result, TinyCo collected tens of thousands of email addresses. In addition to a $300,000 civil penalty, the settlement mandates a major COPPA clean-up and the destruction of all information TinyCo collected from kids under 13.