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FTC Slaps Apps Allowing Collection of Info on Kids

LOS ANGELES (CN) - Two Southern California companies that make computer apps aimed at children - such as "My Cake Shop" and "Ice Cream Jump" - must stop letting third parties collect personal information from the kids for targeted ads.

The Federal Trade Commission filed settlements with LAI Systems, of Los Angeles, and Retro Dreamer, of Upland, on Dec. 17 in Federal Court. It accused both of them of violating the Children's Online Privacy Protection Act, or COPPA.

LAI did not tell advertisers that its apps - such as My Cake Shop, My Pizza Shop, Hair Salon Makeover, Friday Night Makeover, Marley the Talking Dog and Animal Sounds - were directed at children, "and did not instruct or contractually require the advertising networks to refrain from targeted advertising," the FTC said.

The FTC in 1998 was tasked with enforcing COPPA, "to protect the safety and privacy of children online by prohibiting the unauthorized or unnecessary collection of children's personal information online by operators of Internet websites or online services."

LAI, which does business as TapBlaze, also violated COPPA by failing to provide notice or get parental consent to allow advertisers to target their children, according to the FTC. Nor did it provide notice of what information it collects online from children or how the information is used.

"It's vital that companies understand the rules of the road when it comes to handling children's personal information online," said Jessica Rich, director of the FTC's Bureau of Consumer Protection, in a statement. "These cases make it clear that we're closely watching this space to ensure children's privacy online is being protected."

LAI did not admit it had done anything wrong, but to stop doing what the FTC said it had done, and to pay a $60,000 fine.

LAI officials could not be reached for comment.

Retro Dreamer cut a similar deal with the FTC. Its president Craig E. Sharpe and Gavin S. Bowman also were defendants, also in Federal Court.

- following similar allegations.

Retro Dreamer's apps include Ice Cream Jump, Happy Pudding Jump, Ice Cream Drop, Sneezies, Wash the Dishes, Cat Basket and Tappy Pop.

"Today's settlement does not constitute an admission by Retro Dreamer that it violated COPPA," Retro Dreamer said in a statement. "But as a small independent developer, Retro Dreamer hopes that its settlement will educate app developers, particularly other small independent developers, regarding their obligations under COPPA."

Retro Dreamer was fined $300,000.

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