Facebook Inc. (NASDAQ:FB) has been actively pursuing some clarification of rules surrounding the federal Children’s Online Privacy Protection Act (COPPA) that was passed in 2000. The Federal Trade Commission has followed through on Facebook’s request, recently sending some specific guidelines and some changes to the rules in the Act – and these changes and clarifications may actually help Facebook reach out to young users under the age of 13.
Yes, the same Facebook Inc. (NASDAQ:FB) that officialy bans underage children from accessing the site – though many young’uns get on the site through their parents.
It is reported recently that the FTC has announced some “updates” to COPPA to bring the law up to date with the highly evolved Internet compared to the Web in 2000. There were several changes announced Wednesday morning, and perhaps one in particular may open the door for sites like Facebook Inc. (NASDAQ:FB) to be able to advertise to young users – thanks to a clarification that Facebook itself reportedly lobbied to receive. The most noteworthy rule change under COPPA is that parental consent will not be required as long as a web site (like Facbook) uses user data of children “for the sole purpose of supporting the website or online service’s internal operations, such as contextual advertising, frequency capping, legal compliance, site analysis, and network communications” (emphasis mine).
The concept of contextual advertising means that web sites like Facebook Inc. (NASDAQ:FB) can allow users under age 13 without parental consent as long as the sites provide advertising that is relevant to the content on a given page. Behavioral advertising – which is based on user data and browsing behavior and preferences – is still expressly forbidden without parental approval.
Among other changes in the law that keep up with modern Internet technology (including mobile devices, which were not conceived in 2000) are the following points (continue to next page).
* Parents much give approval for a mobile app to collect children’s location, photos, videos or other identifying data – including IP addresses and mobile device identifiers.
* A loophole will be closed that had previously allowed third parties to collect data through web site plug-ins and mobile apps. In some cases now, those third parties will have to abide by all parts of COPPA as if they were web sites that are accessed by children directly. However, the new rules don’t prohibit web sites from releasing children’s data to other parties, but the web sites were directed to take “reasonable steps” to ensure that the information was being shared with third parties that are trusted to keep such information secure and private.
While Facebook Inc. (NASDAQ:FB) has taken steps to eliminate underage profiles on its site, do these updated and clarified rules give Facebook an opportunity to improve is advertising success among a younger demographic? What do you think about children’s privacy and how web sites approach this? Can and will Facebook Inc. (NASDAQ:FB) take advantage of the opportunity, or pass on it? How do you think investors in Facebook, like billionaire Paul Tudor Jones of Tudor Investment Corporation?
