OpenX Faces 2 Million FTC Settlement for Breaching Children’s Data Privacy Law

Laws and regulations guiding how companies are allowed to collect personal information from their customers have become increasingly strict over the past few years. However, laws regarding the collection of personal data from children under the age of 13 are even more stringent. Now, advertising platform OpenX is being forced to pay a $2 million settlement to the Federal Trade Commission (FTC) after being accused of collecting personal information from children under 13 without first acquiring parental consent.

The FTC’s Children’s Online Privacy Protection Act Rule (COPPA Rule) requires that any apps, websites, or online services that are directed toward children or knowingly collect information from children must first notify parents and get their consent before they are able to collect, use, or disclose personal information from children under 13. In a complaint filed by the Department of Justice, OpenX has been accused of violating this law by knowingly and secretly collecting information from underage users without parental consent.

“OpenX secretly collected location data and opened the door to privacy violations on a massive scale, including against children,” said Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection. “Digital advertising gatekeepers may operate behind the scenes, but they are not above the law.”

In addition to being found in violation of the FTC’s COPPA Rule, OpenX has also been found to have violated the FTC Act by falsely informing users that their geolocation data would not be collected without consent and continuing to collect such data even after users specifically opted out of having this data collected. Now, OpenX will be required to pay a $2 million settlement for these violations as well as implement a comprehensive privacy program in order to ensure future compliance with the COPPA Rule.