The FTC (Federal Trade Commission) announced a $2 million settlement with OpenX, a programmatic advertising platform, for allegedly gathering personal information from children under the age of 13 without parental consent.
The Department of Justice accused the California-based corporation of acquiring geolocation data from consumers who expressly asked not to be followed through the opt-out option, according to the complaint filed on behalf of the FTC.
According to the lawsuit, OpenX, which runs a real-time bidding platform for providing ad space on websites and mobile applications, violated the FTC’s Children’s Online Privacy Protection Act Rule (COPPA).
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Before collecting, using, or disclosing personal information from children under the age of 13, websites, apps, and other online services that are child-directed or intentionally gather personal information from children must warn parents and obtain their consent.
Hundreds of child-directed applications were inspected by the FTC, and it was discovered that these apps engaged in the OpenX ad exchange, which gathered personal information from children under the age of 13, in violation of the COPPA Rule. The FTC claims that OpenX collected personal data and then passed it on to third parties who used it to serve advertising to these app users.
While OpenX said via a blog post that “to put it plainly, it was a mistake”, FTC commented on the issue –
“OpenX has received millions, if not billions, of ad requests directly or indirectly from child-directed Apps, and transmitted millions, if not billions, of bid requests containing personal information of children to OpenX’s demand-side partners. These requests included location information and persistent identifiers used for online behavioral advertising.”
This agreement demonstrates how US regulators are actively scanning and monitoring digital ad marketplaces, data collecting, and privacy issues on the internet.
- Neha Shah
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