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US FTC Imposes $4 Million Fine on Children’s App That Violated COPPA

Publications / Jun 30, 2020

Article written by Haim Ravia, Dotan Hammer and Adi Shoval

The U.S. Federal Trade Commission (the “FTC”) announced that it reached a settlement agreement with HyperBeard Inc., a company developing apps that are popular with children. The company will pay a $4 million fine for violations of the Children’s Online Privacy Protection Act (“COPPA”) by not obtaining parental consent before processing children’s personal information for targeted advertising.

COPPA requires that child-directed websites, apps, and online services provide notice of their information practices and obtain parental consent before collecting personal information from children under 13, including the use of persistent identifiers for targeted advertising.

The FTC alleged that HyperBeard’s apps are clearly directed to children, containing brightly colored, animated characters, and are described in child-friendly terms. The FTC also alleged that HyperBeard was aware that children were using its kids’ apps and actively promoted the apps among children.

In addition to the fine, HyperBeard is also required to obtain parental consent for any child-directed app or website they offer that collects personal information from children under 13. It is further prohibited from using or benefitting from personal data collected from children under 13 in violation of COPPA and must destroy that data.

CLICK HERE to read the FTC’s press release regarding HyperBeard Inc.