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

ssion to
provide information requested by the site.

Webmasters can sign-in at the same site to receive instructions for adding
the service to their Web sites. By linking forms to the ParentCheck site,
the Webmaster gets access to a third party process for obtaining a parent’s
permission.

Mark Burgess, Sandiego.com president, said the company had to take action
to take care of its clients and develop their sites to comply with the new law.

“We decided to make it easy for ourselves and everyone else faced with the
same problem,” Burgess said. “We’ll be publishing the largest database of
San Diego based web sites in the next couple of weeks and we’ll be using
ParentCheck’s ‘Over 18’ function to screen young users from listings of the
adult oriented sites operated by San Diegans.”

Sandiego.com developed and hosts the LEGOLAND California Web, Del Mar Fairgrounds, and San Diego Convention and Visitors Bureau Web
sites.

Privacy advocates acknowledge that enforcement of the law remains illusive
because there is no way to make sure children provide accurate information
about their age online. While the law was designed to protect the privacy
of preteens online, it will most likely be several weeks before the real
effects resonate through the world of children’s online content.

For the moment, everyone is watching the Web to see how well the law works
because its level of success will set the tone for future efforts to
protect the online privacy rights of all Americans, regardless of their age.

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