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'Broken code' costs Yelp half a mil in child privacy dust-up with FTC

Busted age block in app is no excuse, says US watchdog

The US Federal Trade Commission (FTC) has fined Yelp after accusing the reviews website of inappropriately gathering personal data on children.

The FTC said Yelp and games maker TinyCo each allowed under-13s to register accounts without the explicit permission from their parents. The watchdog accused the pair of violating the US Children's Online Privacy Protection Act (COPPA) that forbids the collection of kids' personal information without parental consent. Also, parents weren't given a chance to verify the gathered records were accurate, the commission added.

In Yelp's case, the FTC said pre-teens could create profiles and submit reviews thanks to broken age verification code in the mobile app. As a result, youngsters were not detected and blocked from the service, and the company ended up storing data on underage users.

TinyCo, meanwhile, was accused of placing features in its mobile games that asked for kids' email addresses in exchange for in-game currency. Because the company's games were largely aimed at children, the practice fell afoul of COPPA rules on collecting data from users under 13.

As a result, Yelp has agreed to pay a "civil penalty" of $450,000 as an out-of-court settlement, while TinyCo will pay $300,000. As part of the deal, the companies will neither admit nor deny any of the charges, and will also waive all rights to appeal the fines. They'll also change their software and delete any data they shouldn't have.

TinyCo must also draw up a report in a year's time on how well it's complying with the law, as must Yelp.

The FTC said it hopes the penalties will underscore to other developers the importance of not just paying lip service to parental permission requirements, but also making sure their verification tools are functioning as intended.

"As people – especially children – move more of their lives onto mobile devices, it's important that they have the same consumer protections when they're using an app that they have when they're on a website," FTC bureau of consumer protection director Jessica Rich said in announcing the settlements today.

"Companies should take steps as they build and test their apps to make sure that children's information won't be collected without a parent's consent."

This isn't the first time the FTC has gone after mobile developers over issues with underage users. The commission has extracted dosh from Apple and Google over claims that the companies allowed children to rack up massive in-app purchase bills without the knowledge or permission of their parents.

"When this problem was brought to our attention, we fixed it immediately and closed the affected users’ accounts," Yelp's communications veep Vince Sollitto said in a statement today.

"Yelp doesn’t promote itself as a place for children, and we certainly don’t expect or encourage them to write reviews about their plumbers, dentists, or latest gastronomic discoveries."

And TinyCo added: "We apologize to anyone affected by this issue, and want to be unequivocal in stating that TinyCo is fully committed to protecting user privacy, particularly when children are involved." ®

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