A Trail of Clicks, Culminating in Conflict

Washington is pushing Silicon Valley on children’s privacy, and Silicon Valley is pushing back.
Apple, Facebook, Google, Microsoft and Twitter have all objected to portions of a federal effort to strengthen online privacy protections for children. In addition, media giants like Viacom and Disney, cable operators, marketing associations, technology groups and a trade group representing toy makers are arguing that the Federal Trade Commission’s proposed rule changes seem so onerous that, rather than enhance online protections for children, they threaten to deter companies from offering children’s Web sites and services altogether.
“If adopted, the effect of these new rules would be to slow the deployment of applications that provide tremendous benefits to children, and to slow the economic growth and job creation generated by the app economy,” Catherine A. Novelli, vice president of worldwide government affairs at Apple, wrote in comments to the agency.
But the underlying concern, for both the industry and regulators, is not so much about online products for children themselves. It is about the data collection and data mining mechanisms that facilitate digital marketing on apps and Web sites for children — and a debate over whether these practices could put children at greater risk.
In 1998, Congress passed the Children’s Online Privacy Protection Act in an effort to give parents control over the collection and dissemination of private information about their children online. The regulation, known as Coppa, requires Web site operators to obtain a parent’s consent before collecting personal details, like home addresses or e-mail addresses, from children under 13.
Now, federal regulators are preparing to update that rule, arguing that it has not kept pace with advances like online behavioral advertising, a practice that uses data mining to tailor ads to people’s online behavior. The F.T.C. wants to expand the types of data whose collection requires prior parental permission to include persistent ID systems, like unique device codes or customer code numbers stored in cookies, if those codes are used to track children online for advertising purposes.
The idea is to preclude companies from compiling dossiers on the online activities — and by extension the health, socioeconomic status, race or romantic concerns — of individual children across the Web over time.
“What children post online or search as part of their homework should not haunt them as they apply to colleges or for jobs,” Representative Edward J. Markey, Democrat of Massachusetts and co-chairman of the Bipartisan Congressional Privacy Caucus, said in a recent phone interview. “YouTube should not be turned into YouTracked.”
The agency’s proposals have provoked an intense reaction from some major online operators, television networks, social networks, app platforms and advertising trade groups. Some argue that the F.T.C. has overstepped its mandate in proposing to greatly expand the rule’s scope.
Others say that using ID systems like customer code numbers to track children “anonymously” online is benign — and that collecting information about children’s online activities is necessary to deliver the ads that finance free content and services for children.
“What is the harm we are trying to prevent here?” said Alan L. Friel, chairman of the media and technology practice at the law firm Edwards Wildman Palmer. “We risk losing a lot of the really good educational and entertaining content if we make things too difficult for people to operate the sites or generate revenue from the sites.”
The economic issue at stake is much bigger than just the narrow children’s audience. If the F.T.C. were to include customer code numbers among the information that requires a parent’s consent, industry analysts say, it might someday require companies to get similar consent for a practice that represents the backbone of digital marketing and advertising — using such code numbers to track the online activities of adults.
“Once you’ve said it’s personal information for children that requires consent, you’ve set the framework for a requirement of consent to be applied to another population,” Mr. Friel said. “If it is personal information for someone that’s 12, it doesn’t cease being personal information when they are 13.”
Indeed, many of the F.T.C.’s proposed rule revisions have vocal detractors.
 
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