Advertising Platform OpenX will Pay $2 Million for Collecting Personal Information from Children in Violation of Children’s Privacy Law

California-based online advertising platform OpenX Technologies, Inc. will be required to pay $2 million to settle Federal Trade Commission allegations that the company collected personal information from children under 13 without parental consent, a direct violation of a federal children’s privacy protection law. The Federal Trade Commission (“FTC”) also alleged that despite offering an opt-out option, OpenX collected geolocation information from users who specifically asked not to be tracked.

The FTC’s investigation found that OpenX reviewed hundreds of child-directed apps with terms that identified the intended audience as “for toddlers,” “for kids,” “kids games,” or “preschool learning,” and included age ratings for the apps indicating they were directed to children under 13.

These apps and their data were not flagged as child-directed and participated in the OpenX ad exchange, according to the FTC. Because OpenX had knowledge that apps in the ad exchange were child-directed and that the company was collecting personal information from children under 13, the FTC alleged that it had violated the COPPA Rule.

In addition to violating the FTC’s COPPA Rule, OpenX violated the FTC Act by falsely claiming that the company did not collect geolocation from users who opted out of such data collection, according to the complaint.

In addition to the $2 million settlement, the order requires OpenX to delete all ad request data it collected to serve targeted ads and implement a comprehensive privacy program to ensure it complies with COPPA and stops collection and retention of personal data of children under 13.

You can find the full text here.

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