The US Federal Trade Commission imposed a fine of $2 million on OpenX Ad Exchange for violating the rules of the Children’s Online Privacy Protection Act (COPPA rules), which requires parental consent before collecting, using, or disclosing children’s personal information.
OpenX was found to violate FTC’s COPPA rules by deliberately selling personal data collected from toddlers and other children under 13 years of age.
American government FTC Commissioner wrote:
“OpenX misrepresented its data collection practices in two ways: collecting and transmitting location data when consumers did not agree or explicitly refused consent; and misrepresenting its COPPA-related activities and practices.
The complaint further claims that OpenX also violated COPPA itself by collecting personal information from users of child property without notifying their parents and then obtaining their consent.
…Part XI of the prescribed order requires OpenX to send emails to all its “demand-side” customers and notify them that OpenX …failed to fully comply with COPPA, allowing some child-oriented applications to participate in its Ad Exchange, despite its policy prohibition Child-participatory orientation app.
Due to this so-called failure, targeted advertisements were provided to some children without parental notification and consent. “
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The fact that exposed OpenX to this discovery was that they advertised that their advertising transactions were performed by human reviewers to perform traffic quality checks.
“According to OpenX, it has the only traffic quality team in the industry to manually review each attribute to ensure compliance with OpenX policies, and accurately classify the topics of all websites and applications so that the demand side can benefit partners. .”
OpenX
OpenX is a programmatic advertising trading company that provides advertising service technology to place advertisements on websites and bid for these advertisements in real time.
One of the founders of OpenX is Tim Cadogan, Former senior vice president of global advertising marketing at Yahoo, and currently CEO of GoFundMe.
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The Children’s Online Privacy Protection Act aims to give parents control over the type of data collected about their children.
These rules apply to children-oriented sites and sites that know they are collecting information about children.
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Sites for toddlers and children under 13 must obtain parental permission.
The FTC lists the complete COPPA requirements.
FTC accuses OpenX of selling ads to children
According to the FTC, OpenX deliberately sold advertising space on children’s apps to advertisers without marking that these ads were displayed on apps aimed at toddlers and other children.
The FTC pointed out that the reason OpenX deliberately sold ads to children was because OpenX marketed their advertising transactions as manual comments in addition to automatic comments.
According to the announcement of the US Federal Trade Commission:
“The FTC survey found that OpenX reviewed hundreds of child-oriented apps that identified the target audience as “toddler-oriented”, “child-oriented”, “children’s games” or “preschool learning” and included apps The age ratings of the programs indicate that they are for children under 13 years of age.
According to the FTC, these applications and their data are not marked as child-oriented, nor are they participating in OpenX advertising transactions.
Since OpenX knows that the application in the advertising transaction is child-oriented, and the company is collecting personal information from children under 13, the FTC claims that it violates COPPA rules.
OpenX passes this personal data to third parties, who use this data to target advertisements to users of child-oriented apps. “
OpenX violates user location preference
In addition to selling ads to young children, OpenX also sells ads based on the geographic location of site visitors, even if they opt out of geo-targeting.
According to the FTC, the violation of users who opted out of geolocation tracking occurred on Android phones.
The Federal Trade Commission stated:
“According to the complaint, OpenX falsely claimed that the company did not collect geographic locations from users who had opted out of this type of data collection, thus violating the FTC Act.
In fact, the US Federal Trade Commission claims that even if some Android phone users explicitly choose not to collect such location tracking data, OpenX does continue to collect geographic location data from them. “
Citation
Read the FTC OpenX fine announcement
Read children’s online privacy protection rules
https://www.ecfr.gov/current/title-16/part-312
Read FTC Commissioner Phillips’ consent statement
Statement of Consent from Commissioner Noah Joshua Phillips (PDF)
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