In addition, media giants like Viacom and Disney, cable operators, marketing associations, technology groups and a trade group representing toy makers are arguing that the Federal Trade Commission’s proposed rule changes seem so onerous that, rather than enhance online protections for children, they threaten to deter companies from offering children’s Web sites and services altogether.
The underlying concern, for both industry and regulators, is not so much about online products for children themselves. It is about the data collection and data mining mechanisms that facilitate digital marketing on applications and Web sites for children — and a debate over whether these practices could put children at greater risk.
In 1998, Congress passed the Children’s Online Privacy Protection Act in an effort to give parents control over the collection and dissemination of private information about their children online. The regulation requires Web site operators to obtain a parent’s consent before collecting personal details, like home addresses or e-mail addresses, from children under 13.
Now, federal regulators are preparing to update that rule, arguing that it has not kept pace with advances like online behavioral advertising, a practice that uses data mining to tailor ads to people’s online behavior. The F.T.C. wants to expand the types of data whose collection requires prior parental permission to include persistent ID systems, like unique device codes or customer code numbers stored in cookies, if those codes are used to track children online for advertising purposes. The idea is to preclude companies from compiling dossiers on the online activities — and by extension the health, socioeconomic status, race or romantic concerns — of individual children across the Web over time.
But the economic issue at stake is much bigger than just the narrow children’s audience. If the F.T.C. were to include customer code numbers among the information that requires a parent’s consent, industry analysts say, it might someday require companies to get similar consent for a practice that represents the backbone of digital marketing and advertising — using such code numbers to track the online activities of adults.