RealTime IT News

First U.S. Online Privacy Law Goes Live

The Federal Trade Commission surfed the Web Friday in search of commercial Web sites that collect personal information from children under 13 years old without the consent of their parents.

The Online Privacy Protection Act (COPPA) is a new law that could impose a $10,000 per-violation fine on marketers who do not comply with the federal statute and collect personal information from children.

Robert Pitofsky, FTC chairman, said the federal law provides important new protections for kids who surf the net and for their parents.

"The Act puts parents back in charge of their children's personal information online." Pitofsky said. "It gives them the tools to control who collects personal information from their kids, how that information is used, and whether it is shared with third parties."

Besides inspecting commercial Web sites, the FTC has said it would rely on tips and complaints from the general online public, companies and consumer groups.

America Online Inc. (AOL) reported that it deleted the profiles of anyone who listed their age as under 13 in their online identities. San Francisco-based eCRUSH.com Inc., a Web site that matches teens with mutual crushes, simply opted to close down the accounts of members under 13 rather than attempt to obtain parental consent.

Other online entities are spending big bucks to comply with the federal law. FreeZone, a portal site for kids between 8 and 14, estimates it will spend about $100,000 to comply with the new law. The company already requires parental consent, but now it must beef up its privacy area and install clearer, larger links to it.

Alloy Online Inc. produces Alloy.com, a site catering to teens. The firm said it would spend about $200,000 to comply with COPPA. Other online entertainment sites, like Walt Disney Co. (DIS) Disney.com must completely revamp their information collection policies could end up spending as much as $500,000 to comply with the law.

As a result of COPPA, Disney's GO.com requires that parents provide credit card authorization in order for their children to participate in any activities that involve external communications, such as message board posting, open chats, and holding an e-mail account. The requirement will be practiced across the GO.com (GO) family of Web sites, including ESPN.com, ABCNEWS.com, and ABC.com.

Larry Shapiro, GO.com executive vice president, said Disney has always put its guests first and that the initiative was a part of its online expansion plan.

"Beginning with Disney Online and now with GO.com, we strive to be leaders in the area of safety and privacy on the Internet and encourage others to devise innovative online safety solutions," Shapiro said.

Since January 1999, GO.com and Disney Online have required parents to provide e-mail verification for the children to participate in online activities requiring parental permission on Disney.com.

Sandiego.com Inc. Thursday introduced a free online service for webmasters and parents to help everyone understand COPPA compliance.

Parents can obtain a ParentCheck ID for each of their children that shows whether or not a child has permi