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FTC Reaches Settlement With Firm Over Use Of Children's Data FTC Reaches Settlement With Firm Over Use Of Children's Data

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Congress

FTC Reaches Settlement With Firm Over Use Of Children's Data

November 30, 2010

The Federal Trade Commission Tuesday said it has reached a settlement with a firm over charges that it failed to inform parents that information it was collecting about their children would be disclosed to third-party marketers.

The FTC claimed that EchoMatrix did not adequately disclose to parents that information it collected from its Sentry software program allowing parents to monitor their children's online activities also was being shared with marketers through EchoMatrix's Pulse marketing research program. The pulse program promoted itself as allowing marketers to see "unbiased, unfiltered, anonymous" content from social media websites, blogs, forums, chats and message boards. The FTC said one source of information available to Pulse users was data from the online activity of children recorded by the Sentry software.

The FTC alleged that EchoMatrix violated federal law by failing to notify parents who subscribed to Sentry that information about their children's online activities would be shared with third-party marketers. "The only disclosure made to parents about this practice was a vague statement approximately 30 paragraphs into a multi-page end user license agreement," the FTC said in a news release.

As part of the settlement, EchoMatrix has agreed not to share or use information it has obtained from its Sentry program or any other program for purposes other than allowing registered users to access their accounts. It also requires the company to destroy information it has transferred from the Sentry program to its Pulse database.

"Companies need to make clear disclosures about how they are going to use and share personal information they collect online - even more so when that information relates to children," FTC Bureau of Consumer Protection Director David Vladeck said in a statement.

The FTC is currently reviewing its rules related to the Children's Online Privacy Protection Act to see if they need to be updated to reflect changes in technology. The act requires websites to obtain parental approval before collecting information from children under 13.

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