Business Implications of the FTC’s Tougher Privacy Protections

The Federal Trade Commission (FTC) has finalized significant updates to the Children’s Online Privacy Protection Rule (COPPA), reinforcing protections for children’s data and empowering parents with new tools to control their children’s online privacy.  

These changes address how companies collect, use, and share children’s personal information, adding a layer of accountability in today’s rapidly evolving digital landscape.  

If your business operates in technology, advertising, or any sector that collects data from children under 13 years old, here’s what you need to know about the new rule and how it impacts your operations. Contact your intellectual property attorney if you need help interpreting or complying with the rules.  

Key Changes to COPPA

• Opt-In Consent for Targeted Advertising: Businesses need to obtain verifiable parental consent before sharing children’s data for targeting advertising or for third-party purposes. This opt-in model ensures parents actively approve how their child’s information is used, preventing platforms from monetizing data without oversight.

• Stronger Data Retention Limits: Companies cannot keep children’s personal information indefinitely. The updated rule mandates that the data must be kept only  as long as necessary to fulfill the original purpose of collection.

• Transparency in Safe Harbor Programs: COPPA-approved Safe Harbor programs, which self-regulate compliance, must now publicly disclose membership lists and submit additional reports to the FTC.

• Expanded Definitions of Personal Information: The rule now includes biometric and government-issued identifiers in its definition of personal information. This broadens the scope of protections to reflect how children’s data is increasingly collected through emerging technologies.

COPPA Obligations for Business Owners

The FTC’s updated rule will take effect 60 days after publication in the Federal Register, with a one-year compliance window for most amendments. Business owners should seek caution when complying with these new regulations as this can open a myriad of legal penalties and reputational damage.  

Here’s how your business can adapt seamlessly.  

Adopt Transparent Data Collection Policies

Communicate clearly with parents about your data collection and sharing practices. Transparency builds trust and can differentiate your brand in a competitive market.  

Implement Robust Parental Consent Mechanisms

Ensure your parental consent process meets verifiable standards, particularly for targeted advertising and data sharing.  

Conduct Regular Privacy Audits

Audit your data collection, storage, and sharing practices regularly to stay ahead of compliance issues. Update policies and systems as privacy laws evolve.  

Invest in Data Minimization Practices

Collect only the data you need and securely delete it once it’s no longer needed.  

Read Our Blog: FTC’s New Ban on Fake Reviews 

The Bigger Picture: Privacy and Innovation

The FTC’s COPPA update is a more significant shift toward greater accountability in data privacy laws. For example, states like Texas and California set benchmarks with comprehensive privacy legislation, placing businesses under increased scrutiny. 

Startups and companies can learn valuable lessons from past legal challenges faced by tech giants like TikTok. As highlighted in our blog, “What Can Startups Learn from TikTok’s Legal Turmoil?”, robust privacy practices, transparency, and proactive regulatory engagement are essential for scaling responsibly. 

By adapting to these changes, you not only comply with regulations but also establish yourself as a trusted steward of children’s data. This value resonates with parents and regulators alike.  

Stay informed, stay compliant, and build trust; privacy is no longer optional. If you’d like to discuss the new rules with one of our intellectual property attorneys, contact us. We’d be delighted to help.