Jolly Time Web Site Fined $10,000 for Violating Children's Privacy

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WASHINGTON, Feb. 14, 2002 -- American Pop Corn Company (APC) will pay $10,000 to settle Federal Trade Commission charges that it violated the Children's Online Privacy Protection Rule (COPPA) by collecting personal information from children on its "Jolly Time" Web site without obtaining parental consent. The settlement also will bar future violations of the COPPA Rule.

"The civil penalty of $10,000 reflects the relatively small number of violations in this case. But we hope it sends a strong message to operators of Web sites directed to children: We intend to enforce COPPA rigorously," said J. Howard Beales III, Director of the FTC's Bureau of Consumer Protection.

The COPPA Rule applies to operators of commercial Web sites and online services directed to children under the age of 13, and to general audience Web sites and online services that knowingly collect personal information from children.

Among other things, the Rule requires that Web sites get verifiable consent from a parent or guardian before they collect personal information from children. It also prohibits sites from conditioning a child's participation in an activity on the child's disclosing more personal information than is reasonably necessary to participate in such activity.

In its complaint, the FTC alleges that APC maintains a Web site, www.jollytime.com, with a "Kids Club" section that features games, crafts, contests, and jokes directed to children under the age of 13. Without obtaining parental consent, the company collected personal information, including names, e-mail addresses, and home addresses, from children who went to the "Kids Club" section. It also conditioned participation in certain prize offers on children's providing more information than was necessary to participate in the activity, the FTC alleges. Both practices violate the COPPA Rule.

In addition, APC posted a privacy policy statement on its Web site stating that it would notify parents or guardians by e-mail whenever "guests" under the age of 18 registered at its site. It stated that parents or guardians would be given the option to invalidate the registration. But APC did not contact the parents of children who registered and provided personal information, and therefore the privacy policy statements were false, in violation of the FTC Act, the agency alleges.

The settlement bars APC from future violations of the COPPA Rule and from misrepresenting its policies about collecting, disclosing, or using children's personal information. It also calls for a civil penalty of $10,000.

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