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GeoCities Settles with FTC on Kids' Data Complaint

If you're advertising or marketing to children, you might want to review your data collection practices and policies because the FTC may be watching.

The feds were certainly looking at GeoCities, which now has agreed to settle federal charges that the company improperly collected and used personal information about children visiting its Web sites.

The agreement with the Federal Trade Commission would mark the first time the agency has used its power to police "unfair and deceptive" trade practices in a case about the use of information gathered from children on the Web, according to Bloomberg News.

GeoCities disclosed the settlement in a filing with the Securities and Exchange Commission, in which it announced plans for an initial public offering.

The company reportedly signed a preliminary settlement with the FTC, the filing said, but it still must be approved by the commissioners.

"This tells us two things: One, the FTC is watching, and two, one of the largest sites on the Web is responding," Deirdre Mulligan, staff counsel at the Center for Democracy and Technology, a civil liberties policy group, was quoted as saying. "I'm very pleased that the FTC is moving to use their existing power to police the Internet and protect children."

Under the proposed settlement, GeoCities would agree to adopt policies for the use of personal information that address the FTC's concerns. The company would not be fined, and would not admit wrongdoing, Bloomberg said.

Earlier this month, the FTC asked Congress to pass a law requiring parental consent before children under 13 can enter Web sites that solicit addresses, phone numbers, or other personal information.

In a draft complaint against GeoCities, the FTC charged that the company engaged in "unfair and deceptive practices" by disclosing information to third parties without telling children or their parents, the company's SEC filing said.

Under the proposed agreement, GeoCities would have to seek parental permission before using information from children under the age of 13, would be required to more clearly explain how that data would be used, and must give consumers the ability to delete personal information from GeoCities' database, Bloomberg said.

Last week, the FTC issued a report to Congress criticizing the high-tech industry's efforts at self-regulation as a means of protecting privacy online. The study found only 54% of some 212 children's Internet sites disclose that they're collecting information and less than 10% give parents control over this practice.