January 21, 2018

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The Young and the Wireless: COPPA and the Internet of Things

Senator Mark Warner of Virginia recently sent a letter to the Federal Trade Commission (FTC) expressing concern over the potential explosion of collection, storage, and usage of children’s personal information in connection with the Internet of Things (IoT), including mobile apps and so-called “smart toys.”

In the letter, Senator Warner noted that the scope and duration of data collection is expanding rapidly, enabled by the falling cost of digital storage and internet connectivity, and “more and more Internet-connected devices are making their way into children’s hands.” Thus, seemingly simple everyday purchases—such as toys—could raise complex privacy and safety issues that consumers may struggle with or not fully comprehend.

In 2013, the FTC revised its Children’s Online Privacy Protection Act (COPPA) rule and broadened the definition of “personal information” to include persistent identifiers, geolocation information, photos, videos, and audio recordings. The increasing functionality and integration of mobile apps and connected products—coupled with their widespread use by children—could result in the pervasive collection of data, which is utilized to identify child users and otherwise falls within the scope of personal information.

It will be important to monitor how the FTC interprets and enforces its COPPA rule during the dawn of the IoT age. Issues for the FTC to mull include

  • the extent of its regulatory authority in this area;

  • whether IoT-specific legislation is appropriate;

  • the extent of parental control and consent regarding connected products;

  • whether devices and applications can be easily identified as directed to children; and

  • whether, absent extensive regulation, market participants will implement sufficient privacy and security measures for products across price points and lifespans.

Copyright © 2018 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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Partner

Rahul Kapoor is a partner in Morgan Lewis's Business and Finance Practice, the firmwide hiring partner, and a member of the firm's Legal Personnel and Finance Committees. Mr. Kapoor has deep transactional experience in strategic alliances, joint ventures, corporate partnering transactions, standards body licensing structures, intellectual property strategic counseling, technology licensing, open source software strategy, electronic commerce and privacy, supply and distribution agreements, consignment agreements, spin-outs and core technology licenses, IT outsourcing...

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A. Benjamin Klaber, Morgan Lewis Law Firm, Finance Attorney
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A. Benjamin Klaber is an associate in Morgan Lewis’s Business and Finance Practice. The lawyers in our Business and Finance Practice focus on mergers and acquisitions (including joint ventures, spin-offs, and strategic alliances), finance and restructuring, securities (including public and private equity and debt offerings), and tax. Clients range from Fortune 500 companies to investment banks to emerging market companies.

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