COPPA: Protecting Children's Privacy Could Protect Your Business

Making money in the glutted app world is a difficult undertaking.  It’s hard enough combating piracy, and to compete in the App store you need to utilize every tool in order to ensure your app has a competitive edge.  Analytics to better streamline your product and tailor it to suit your customers’ desires. Smartly priced in app-purchases, because consumers don’t buy the way they used to. Social marketing, to leverage the proselytizing power of a generation connected to a vast social grid.

You need to know your consumer inside and out. You need to know what they’re buying and why they’re buying it. You need to know who their friends are, what kind stuff they like to do, and how much they like to do it. But if it’s your business to know your customer, you better make it your business to protect their privacy; particular the privacy of children, or all that useful information you culled could be your company’s undoing.

We’ve all heard the horror story, right? Little Danny gets a hold of mum’s iPad and racks up £1,700 (roughly $2,800) of in-app purchases due to inadequate child-proofing. But developers aren’t off the hook for these pre-pubescent spending sprees. Just a few weeks ago, Apple got slammed for $32.5 million for failing to prevent children from buying without parental consent. Path, a social media application, found itself $800,000 poorer for collecting personal information on users under age 13.  And they are not the only companies whose lax privacy policies have gotten them in trouble with the Federal Trade Commission.

If your app is intended for children’s use, it’s not enough to create a great experience and market it well if you want to be successful: your app must also be compatible with the latest privacy laws. COPPA, the Children’s Online Privacy Protection Act regulates how the personal information of children under the age of 13 can be handled in applications and websites designed for their, or general audience use. That means if you want to collect analytics, include social elements to your app, and monetize using in-app purchases, it’s imperative that the app complies with COPPA. Failure to do so means your company could end up paying $16,000 per violation, and if the judge wants to be tough, per-violation could mean “per download.”

Luckily, there are numerous resources out there to ensure that your app jives with COPPA, including several legal safe harbors, which, if utilized, protect you from COPPA violations and a hefty fine.

While $32.5 million is barely a dent in Apple’s coffers, it could break a smaller developer. If you aren’t serious about privacy, ask yourself if you can afford that risk. Be smart: protect your business, and protect your users’ privacy.

TL;DR: If you’re a general use website/web service (that includes things like apps) intended for children or a general audience, it’s imperative that you understand COPPA and whether its guidelines apply to you.

Sources:

http://bit.ly/1f2kAH5
http://bit.ly/M52zOq/
http://wapo.st/1cBhZ34
http://1.usa.gov/L2A4zX/
http://1.usa.gov/KlnD1P