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FTC Settles With Three Sites on Kid Privacy

The Federal Trade Commission said operators of three Web sites have signed settlement agreements in a suit that charged they violated the Children's Online Privacy Protection Act.

The settlements came on the first anniversary of the effective date of the law.

The FTC charged Monarch Services Inc. and Girls Life Inc., operators of www.girlslife.com; Bigmailbox.com Inc. and Nolan Quan, operators of www.bigmailbox.com; and Looksmart Ltd., operator of www.insidetheweb.com, with illegally collecting personally identifying information from children under 13 without parental consent.

Although the agreements with the FTC state that the companies do not admit to any wrongdoing, they have said they will collectively pay a total of $100,000 in civil penalties. The settlements require the operators to cease and desist, as well as to delete all personally identifying information collected from children online, at any time since the law's effective date.

These cases mark the first civil penalty cases the FTC has brought under the rule.

The FTC alleged that each of the defendants collected personal information from children, including such things as full names and home addresses, e-mail addresses and telephone numbers. None of the Web sites posted privacy policies that complied with the Act or obtained the required consent from parents.

The Children's Online Privacy Protection Act applies to operators of commercial Web sites and online services directed to children under 13, and to general audience sites that knowingly collect personal information from children.

The law requires that Web sites post a complete privacy policy, and directly notify parents of their information collection practices and get verifiable parental consent before they collect children's personal information or share that information with others.

The FTC, which maintains a Web site devoted to privacy and children, says that 91 percent of children's Web sites now post a privacy policy, compared to just 24 percent in 1998.