What Viacom, Mattel and JumpStart’s ad-tracking fine really means

Digital ad experts like Dylan Collins see big changes afoot in the kids online space following the companies' US$835,000 fine for ad-tracking infringements.
September 15, 2016

Viacom, Hasbro, Mattel and JumpStart Games have reached a US$835,000 settlement with New York attorney general Eric Schneiderman over information tracking on children’s websites.

An investigation by Schneiderman found that websites for a number of children’s brands—including Barbie and Dora the Explorer—were hosting technology that illegally enabled third-party vendors to track users’ online activity. This type of ad tracking is forbidden for sites directed at children under 13 by the Children’s Online Privacy Protection Rule (COPPA), which was enacted by US Congress in 1998 to protect the safety and privacy of young children online.

While the fine isn’t necessarily going to change the bottom line for these large kids entertainment companies, its message is certainly more indelible.

“The whole thing reflects just how much the internet is changing, at a very mainstream level, in its regard for under-13 data privacy,” says Dylan Collins, CEO of UK-based digital kids engagement platform Super Awesome. His company allows brands like Hasbro, Mattel and Lego to reach 300 million kids per month across mobile, web, virtual worlds and online video in a manner that adheres to COPPA-approved data-privacy regulations. 

“What we’re really starting to see emerge, right now, is the internet for kids—and the internet for everyone else. The internet for everyone else is very much focused on capturing as much data as possible, whereas the internet for kids under 13 has to be the opposite of that. It has to be a zero-data environment. Laws like COPPA have been around for many years, but they’re starting to be enforced much more aggressively.”

The affected online properties included Dora the Explorer, SpongeBob SquarePants and Teenage Mutant Ninja Turtles (Viacom); Barbie, Hot Wheels and American Girl (Mattel); Neopets (JumpStart); and My Little Pony and Transformers (Hasbro). As part of the settlement, Viacom will pay US$500,000, while Mattel forks over US$250,000 and JumpStart remits US$85,000. Hasbro participated in an FTC-approved “safe harbor” program and as a result will not pay any penalties.

The companies will also be required to implement a number of reforms, including regular electronic scans to monitor for third-party tracking technologies and procedures for vetting third parties’ data-collection practices to ensure they are COPPA-compliant.

According to Collins, kid-specific technology is required to be truly COPPA-compliant. The majority of companies operating today, however, are using technology designed for adults and attempting to make it work for children.

“Today, in the US alone, there are more than 50 million kids under 13. They’re one of the fastest-growing internet audiences on the planet, and yet the vast majority of the internet is not built for them,” Collins says. “The data privacy laws that are being pushed out are not going away. They’re only going to get bigger. In four or five years’ time it’s very easy to imagine that every major app or service will have an over-13 mode and an under-13 mode, just out of legal requirement. That’s where it’s going.”

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