Lina Khan-led FTC proposes new rules to curb monetisation of kids’ data

The Federal Trade Commission (FTC) in the US has proposed sweeping changes to regulations to further limit the collection and use of children’s data by tech companies for monetisation, especially for targeted advertising.

The FTC proposed changes to the Children’s Online Privacy Protection Rule (COPPA Rule) that would place new restrictions on the use and disclosure of children’s personal information and further limit the ability of companies to condition access to services on monetizing children’s data.

The proposal aims to shift the burden from parents to providers to ensure that digital services are safe and secure for children.

“Kids must be able to play and learn online without being endlessly tracked by companies looking to hoard and monetize their personal data,” said FTC Chair Lina Khan.

"By requiring firms to better safeguard kids’ data, our proposal places affirmative obligations on service providers and prohibits them from outsourcing their responsibilities to parents,” she added.

The FTC is seeking comment on proposed changes to the COPPA Rule aimed at addressing the evolving ways personal information is being collected, used, and disclosed, including to monetise children’s data, and clarifying and streamlining the rule.

The proposal reinforces the current rule’s prohibition on conditioning participation in an activity on the collection of personal data to make clear that it serves as an outright ban on collecting more personal information than is reasonably necessary for a child to participate in a game, offering of a prize, or another activity.

“Operators would be prohibited from using online contact information and persistent identifiers collected under COPPA’s multiple contact and support for the internal operations exceptions to send push notifications to children to prompt or encourage them to use their service more,” the proposal noted.

The FTC has proposed codifying its current guidance related to the use of education technology to prohibit the commercial use of children’s information and implement additional safeguards.

The public will have 60 days to submit a comment on the proposed changes to the COPPA Rule after the notice is published.