[Federal Register Volume 89, Number 8 (Thursday, January 11, 2024)]
[Proposed Rules]
[Pages 2034-2076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28569]



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Vol. 89

Thursday,

No. 8

January 11, 2024

Part III





Federal Trade Commission





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16 CFR Part 312





Children's Online Privacy Protection Rule; Proposed Rule

  Federal Register / Vol. 89 , No. 8 / Thursday, January 11, 2024 / 
Proposed Rules  

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FEDERAL TRADE COMMISSION

16 CFR Part 312

RIN 3084-AB20


Children's Online Privacy Protection Rule

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission proposes to amend the Children's Online Privacy 
Protection Rule, consistent with the requirements of the Children's 
Online Privacy Protection Act. The proposed modifications are intended 
to respond to changes in technology and online practices, and where 
appropriate, to clarify and streamline the Rule. The proposed 
modifications, which are based on the FTC's review of public comments 
and its enforcement experience, are intended to clarify the scope of 
the Rule and/or strengthen its protection of personal information 
collected from children.

DATES: Comments must be received by March 11, 2024.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``COPPA Rule Review, 
Project No. P195404'' on your comment and file your comment online at 
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex E), 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Manmeet Dhindsa (202-326-2877) or 
James Trilling (202-326-3497), Division of Privacy and Identity 
Protection, Bureau of Consumer Protection, Federal Trade Commission.

SUPPLEMENTARY INFORMATION: 

I. Background

    Congress enacted the Children's Online Privacy Protection Act 
(``COPPA'' or ``COPPA statute''), 15 U.S.C. 6501 et seq., in 1998. The 
COPPA statute directed the Federal Trade Commission (``Commission'' or 
``FTC'') to promulgate regulations implementing COPPA's requirements. 
On November 3, 1999, the Commission issued its Children's Online 
Privacy Protection Rule, 16 CFR part 312 (``COPPA Rule'' or ``Rule''), 
which became effective on April 21, 2000.\1\ Section 6506 of the COPPA 
statute and Sec.  312.11 of the initial Rule required that the 
Commission initiate a review no later than five years after the initial 
Rule's effective date to evaluate the Rule's implementation. The 
Commission commenced this mandatory review on April 21, 2005.\2\ After 
receiving and considering extensive public comment, the Commission 
determined in March 2006 to retain the COPPA Rule without change.\3\ In 
2010, the Commission once again undertook a review of the COPPA Rule to 
determine whether the Rule was keeping pace with changing technology. 
After notice and comment, the Commission issued final amendments to the 
Rule, which became effective on July 1, 2013 (``2013 Amendments'').\4\
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    \1\ Children's Online Privacy Protection Rule, Statement of 
Basis and Purpose, 64 FR 59888 (Nov. 3, 1999), available at https://www.federalregister.gov/documents/1999/11/03/99-27740/childrens-online-privacy-protection-rule.
    \2\ Children's Online Privacy Protection Rule, Request for 
Public Comment, 70 FR 21107 (Apr. 22, 2005), available at https://www.federalregister.gov/documents/2005/04/22/05-8160/childrens-online-privacy-protection-rule-request-for-comments.
    \3\ Children's Online Privacy Protection Rule, Retention of Rule 
Without Modification, 71 FR 13247 (Mar. 15, 2006), available at 
https://www.federalregister.gov/documents/2006/03/15/06-2356/childrens-online-privacy-protection-rule.
    \4\ See Children's Online Privacy Protection Rule, Statement of 
Basis and Purpose, 78 FR 3972 (Jan. 17, 2013), available at https://www.federalregister.gov/documents/2013/01/17/2012-31341/childrens-online-privacy-protection-rule.
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    The COPPA Rule imposes certain requirements on operators of 
websites \5\ or online services directed to children under 13 years of 
age, and on operators of websites or online services that have actual 
knowledge that they are collecting personal information online from a 
child under 13 years of age (collectively, ``operators''). The Rule 
requires that operators provide notice to parents and obtain verifiable 
parental consent before collecting, using, or disclosing personal 
information from children under 13 years of age.\6\ Additionally, the 
Rule requires that operators must provide parents the opportunity to 
review the types or categories of personal information collected from 
their child, the opportunity to delete the collected information, and 
the opportunity to prevent further use or future collection of personal 
information from their child.\7\ The Rule also requires operators to 
keep personal information they collect from children secure, including 
by imposing retention and deletion requirements, and prohibits them 
from conditioning children's participation in activities on the 
collection of more personal information than is reasonably necessary to 
participate in such activities.\8\ The Rule contains a ``safe harbor'' 
provision enabling industry groups or others to submit to the 
Commission for approval self-regulatory guidelines that would implement 
the Rule's protections.\9\
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    \5\ See Part IV for further discussion of the Commission's 
proposal to change the term ``Web site'' to ``Web site'' throughout 
the Rule. This Notice of Proposed Rulemaking incorporates this 
proposed change in all instances in which the term ``Web site'' is 
used.
    \6\ 16 CFR 312.3, 312.4, and 312.5.
    \7\ 16 CFR 312.3 and 312.6.
    \8\ 16 CFR 312.3, 312.7, 312.8, and 312.10.
    \9\ 16 CFR 312.11.
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    The 2013 Amendments \10\ revised the COPPA Rule to address changes 
in the way children use and access the internet, including through the 
increased use of mobile devices and social networking. In particular, 
the 2013 Amendments:
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    \10\ 78 FR 3972.
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     Modified the definition of ``operator'' to make clear that 
the Rule covers an operator of a child-directed website or online 
service that integrates outside services--such as plug-ins or 
advertising networks--that collect personal information from the 
website's or online service's visitors, and expanded the definition of 
``website or online service directed to children'' to clarify that 
those outside services are subject to the Rule where they have actual 
knowledge that they are collecting personal information directly from 
users of a child-directed website or online service;
     Permitted a subset of child-directed websites or online 
services that do not target children as their primary audience to 
differentiate among users, requiring them to comply with the Rule's 
obligations only as to users who identify as under the age of 13;
     Expanded the definition of ``personal information'' to 
include geolocation information; photos, videos and audio files 
containing a child's image or voice; and persistent identifiers that 
can be used to recognize a user over time and across different websites 
or online services;
     Streamlined the direct notice requirements to ensure that 
key information is presented to parents in a succinct ``just-in-time'' 
notice;
     Expanded the non-exhaustive list of acceptable methods for 
obtaining prior verifiable parental consent;
     Created three new exceptions to the Rule's notice and 
consent requirements, including for the use of persistent identifiers 
for the support for the internal operations of a website or online 
service;

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     Strengthened data security protections by requiring 
operators to take reasonable steps to release children's personal 
information only to service providers and third parties who are capable 
of maintaining the confidentiality, security, and integrity of such 
information, and required reasonable data retention and deletion 
procedures; and
     Strengthened the Commission's oversight of self-regulatory 
safe harbor programs.\11\
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    \11\ Id.
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    On July 25, 2019, the FTC announced in the Federal Register that it 
was again undertaking a review of the COPPA Rule, noting that questions 
had arisen about the Rule's application to the educational technology 
(``ed tech'') sector, voice-enabled connected devices, and general 
audience platforms that host third-party child-directed content (``2019 
Rule Review Initiation'').\12\ The Commission sought public comment on 
these and other issues in its 2019 Rule Review Initiation. In addition 
to its standard regulatory review questions to determine whether the 
Commission should retain, eliminate, or modify the COPPA Rule, the 
Commission asked whether the 2013 Amendments have resulted in stronger 
protections for children and whether the revisions have had any 
negative consequences. The Commission also posed specific questions 
about the Rule's provisions, including the Rule's definitions, notice 
and consent requirements, access and deletion rights, security 
requirements, and safe harbor provisions.
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    \12\ See Children's Online Privacy Protection Rule, Request for 
Public Comment, 84 FR 35842 (July 25, 2019), available at https://www.federalregister.gov/documents/2019/07/25/2019-15754/request-for-public-comment-on-the-federal-trade-commissions-implementation-of-the-childrens-online.
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    During the comment period, the Commission held a public workshop on 
October 7, 2019, to discuss in detail several of the areas where it 
sought public comment (``COPPA Workshop'').\13\ Specific discussion 
included such topics as application of the COPPA Rule to the ed tech 
sector, how the development of new technologies and business models 
have affected children's privacy, and whether the 2013 Amendments have 
worked as intended.
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    \13\ See The Future of the COPPA Rule: An FTC Workshop (Oct. 7, 
2019), available at https://www.ftc.gov/news-events/events/2019/10/future-coppa-rule-ftc-workshop; 84 FR 35842.
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    In response to the 2019 Rule Review Initiation, the Commission 
received more than 175,000 comments from various stakeholders, 
including industry representatives, video content creators, consumer 
advocacy groups, academics, technologists, FTC-approved COPPA Safe 
Harbor programs, members of Congress, and individual members of the 
public. While many of these comments expressed overall support for 
COPPA,\14\ the comments identified a number of areas where the 
Commission could provide additional clarification or guidance about the 
COPPA Rule's requirements. The comments also proposed a number of 
potential changes to the Rule.
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    \14\ See, e.g., Joint Comment of the Attorneys General of New 
Mexico, Connecticut, Delaware, the District of Columbia, Idaho, 
Illinois, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, 
Michigan, Minnesota, Mississippi, Nebraska, Nevada, New York, North 
Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, and 
Washington (``Joint Attorneys General''), at 2 (``As more and more 
of our lives are lived online, and as digital tools make their way 
into our schools and into our lives at ever-earlier ages, rules like 
the COPPA Rule must continue not only to exist, but grow and adapt 
to ever-changing regulatory landscapes''); SuperAwesome Inc. 
(``SuperAwesome''), at 8 (``As a result of the rapid evolution of 
the [I]nternet economy and in particular services that rely on user 
data, the need for the COPPA Rule has never been greater''); Privacy 
Vaults Online, Inc. (``PRIVO''), at 2 (``In PRIVO's experience, both 
children and operators benefit when COPPA-compliant processes are in 
place to permit operators to offer relevant content to children and 
permit children to engage with that content in an appropriate and 
permissioned manner''); The LEGO Group (``Lego''), at 3 (``COPPA has 
played and continues to play an important role in raising awareness 
of the importance of protecting children's privacy online. COPPA has 
been effective because of its future-proof language, which has 
allowed it to protect against real harms today, that were not clear 
when the Rule was enacted in 1998''); Internet Association, at 1 
(``Nearly 20 years after its adoption, COPPA remains an important 
mechanism for preserving parental choice with respect to the privacy 
and security of personal information about children under 13''); 
Consumer Reports, at 5 (``Due to the increase in connected products 
generally, and children's products specifically, there is only 
heightened need for the COPPA rules in the coming years''); and 
Association of National Advertisers (``ANA''), at 3 (``The current 
COPPA Rule is protective of children's privacy interests and 
generally workable for businesses. The FTC has given parents the 
ability to protect children's privacy and entities clear `rules of 
the road' regarding how to comply with COPPA''). But see Committee 
for Justice, at 2 (``In addition to being ineffective at preventing 
the personal information of children from being collected without 
parental consent, [COPPA's] approach has the effect of burdening 
sites targeted towards children''); International Center for Law & 
Economics (``ICLE''), at 3 (regarding the aggregate costs and 
benefits of the Rule, ``[t]he benefits are unclear, but the costs--
in the form of restricting the ability of family-friendly content 
creators to monetize their products--are real''); Connected Camps, 
at 1-3 (stating that COPPA has resulted in a number of unintended 
consequences based on mistaken assumptions).
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    Following consideration of the submitted public comments, 
viewpoints expressed during the COPPA Workshop, and the Commission's 
experience enforcing the Rule, the Commission proposes modifying most 
provisions of the Rule. Part II of this notice of proposed rulemaking 
(``NPRM'') discusses commenters' calls to expand the COPPA Rule's 
coverage by amending the definition of ``website or online service 
directed to children'' or by changing the Rule's actual knowledge 
standard. Part III of this NPRM discusses commenters' viewpoints on 
whether the Commission should permit general audience platforms that 
allow third parties to upload content to the platform to rebut the 
presumption that all users of uploaded child-directed content are 
children. Part IV addresses the Commission's proposed modifications to 
the Rule. Parts V-X provide information about requests for comment, the 
Paperwork Reduction Act, the Regulatory Flexibility Act, communications 
by outside parties to the Commissioners or their advisors, questions 
for the proposed revisions to the Rule, a list of subjects in the Rule, 
and the amended text of the Rule.

II. Comments on Expanding the COPPA Rule's Coverage

    As part of its 2019 Rule Review Initiation, the Commission 
requested comment on questions regarding whether the Commission should 
revise the definition of ``website or online service directed to 
children.'' In response, the Commission received various comments 
regarding expanding the COPPA Rule's coverage by either amending the 
definition of ``website or online service directed to children'' or by 
changing the Rule's actual knowledge standard. This Part includes 
discussion of comments advocating for and against such expansions.

A. Amending the Definition of ``Website or Online Service Directed to 
Children''

    In its 2019 Rule Review Initiation, the Commission asked for 
comment on various aspects of the Rule's definition of ``website or 
online service directed to children.'' Among other questions, the 
Commission asked whether it should amend the definition to address 
websites and online services that do not include traditionally child-
oriented activities but still have large numbers of child users.\15\
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    \15\ Other aspects of this definition are discussed in Part 
IV.A.5.
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    Some commenters argued that the definition of ``website or online 
service directed to children'' should be modified to include sites and 
services with large numbers of children, those with a certain 
percentage of child users, or those that include child-attractive

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content.\16\ For example, FTC-approved COPPA Safe Harbor program PRIVO 
asserted that general audience services with large numbers of children 
should be required to comply with COPPA, noting that ``[s]ervices not 
targeted to children that have large numbers of children must be 
addressed as it can result in online harm to the child due to inherent 
privacy and safety risks.'' \17\ PRIVO further argued that the 
Commission should define thresholds for the number of child users at 
which COPPA's protections must be provided.\18\ Similarly, Common Sense 
Media encouraged the Commission to interpret the definition of 
``website or online service directed to children'' to include ``sites 
and services that attract, or are likely to be accessed by, 
disproportionate numbers of children.'' \19\
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    \16\ See, e.g., Children's Advertising Review Unit (``CARU''), 
at 6-7; PRIVO, at 7; Common Sense Media, at 12.
    \17\ PRIVO, at 7.
    \18\ Id.
    \19\ Common Sense Media, at 12, 15-17.
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    However, other commenters opposed expanding the definition of 
``website or online service directed to children'' in such ways.\20\ 
For example, The Toy Association opposed the adoption of a numerical or 
percentage audience threshold as a determinative factor in identifying 
child-directed websites or online services.\21\ Similarly, panelists 
during the COPPA Workshop noted that ``[a]ttractive to children is very 
different from targeted to children,'' \22\ and that COPPA's statutory 
language is ``child-directed'' and not ``child-attractive.'' \23\ 
Commenters raised additional concerns with expanding the definition to 
include sites and services that do not include child-oriented 
activities but have large numbers of children, including because such a 
change would be inconsistent with the statute,\24\ decrease online 
offerings for children,\25\ be unduly burdensome to operators of non-
child-directed websites or online services,\26\ and lead to regulatory 
uncertainty.\27\ Some commenters also noted that this amendment would 
be unnecessary since the definition already includes ``competent and 
reliable empirical evidence regarding audience composition'' as a 
factor to consider in determining whether a site or service is directed 
to children.\28\
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    \20\ See, e.g., Computer & Communications Industry Association 
(``CCIA''), at 6-7; U.S. Chamber of Commerce, at 3-4; ANA, at 6-7; 
Network Advertising Initiative (``NAI''), at 3-5; ViacomCBS Inc. 
(``Viacom''), at 5-6; Internet Association, at 9; Entertainment 
Software Association (``ESA''), at 8-12; TechFreedom, at 18.
    \21\ The Toy Association, at 9-10 (adding that ``[d]oing so is 
inconsistent with traditional norms for advertising and risks 
undermining the intent of the statute by elevating a single factor 
over others. Such an approach is also entirely inconsistent with how 
the FTC and advertising self-regulatory bodies handle 
advertising'').
    \22\ P. Aftab, Remarks from the Scope of the COPPA Rule panel at 
The Future of the COPPA Rule: An FTC Workshop 52 (Oct. 7, 2019), 
available at https://www.ftc.gov/news-events/events/2019/10/future-coppa-rule-ftc-workshop.
    \23\ See D. McGowan, Remarks from the Scope of the COPPA Rule 
panel at The Future of the COPPA Rule: An FTC Workshop 48 (Oct. 7, 
2019), available at https://www.ftc.gov/news-events/events/2019/10/future-coppa-rule-ftc-workshop.
    \24\ See, e.g., CCIA, at 6; NAI, at 3; ANA, at 6; Viacom, at 5-
6; U.S. Chamber of Commerce, at 3-4.
    \25\ See, e.g., ANA, at 7 (noting that ``[b]roadening the Rule's 
scope by making it applicable to websites or online services that do 
not include traditionally child-oriented activities, but that have 
large numbers of child users, would negatively impact consumers and 
children because operators would be disincentivized from producing 
content, products, and online services that, while not directed to 
them, have the potential to attract child users'').
    \26\ See, e.g., CCIA, at 7 (noting that ``[a]udience metrics 
alone are a poor basis for determining COPPA applicability because 
they can shift over time, may be highly responsive to fads, cannot 
necessarily be predicted by an operator at the outset of (launching 
a website or online service, and cannot be reliably calculated'').
    \27\ See, e.g., ESA, at 8.
    \28\ See, e.g., CCIA, at 6-7; ANA, at 6-7.
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    During the Rule review that resulted in the 2013 Amendments, the 
Commission considered amending the definition of ``website or online 
service directed to children'' to cover sites or services that 
``[b]ased on the overall content of the website or online service, 
[are] likely to attract an audience that includes a disproportionately 
large percentage of children under age 13 as compared to the percentage 
of such children in the general population. . . .'' \29\ In response, 
the Commission received numerous comments raising concerns that such a 
standard was vague, potentially unconstitutional, and unduly expansive, 
and could lead to widespread age-screening and more intensive age 
verification across all websites and online services.\30\ In ultimately 
declining to adopt this standard, the Commission stated it did not 
intend to expand the reach of the Rule to include additional sites and 
services.
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    \29\ Children's Online Privacy Protection Rule, Supplemental 
Notice of Proposed Rulemaking; Request for Comment, 77 FR 46643, 
46646 (Aug. 6, 2012), available at https://www.federalregister.gov/documents/2012/08/06/2012-19115/childrens-online-privacy-protection-rule.
    \30\ See 78 FR 3972 at 3983-3984.
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    The Commission again declines to modify the Rule in this manner. 
The definition of ``website or online service directed to children'' 
includes a number of factors the Commission will consider in 
determining whether a particular website or online service is child-
directed, including consideration of ``competent and reliable empirical 
evidence regarding audience composition.'' Because the Commission 
already considers the demographics of a website's or online service's 
user base in its determination, the Commission does not believe it is 
necessary to modify the definition.
    Similarly, the Commission also previously considered amending the 
Rule to set forth that websites and online services with a specified 
percentage of child users would be considered directed to children. As 
part of the Rule review that led to the 2013 Amendments, the Institute 
for Public Representation recommended that the Commission amend the 
Rule so that a website per se should be deemed ``directed to children'' 
if audience demographics show that 20% or more of its visitors are 
children under age 13.\31\ The Commission determined not to adopt this 
as a per se legal standard, in part because the Commission noted that 
the definition of ``website or online service directed to children'' 
already positions the Commission to consider empirical evidence of the 
number of child users on a site.
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    \31\ Children's Online Privacy Protection Rule, Proposed Rule; 
Request for Comment, 76 FR 59804, 59814 (Sept. 27, 2011), available 
at https://www.federalregister.gov/documents/2011/09/27/2011-24314/childrens-online-privacy-protection-rule.
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    While the Commission continues to believe that there are good 
reasons not to ground COPPA liability simply on an assessment of the 
percentage of a site's or service's audience that is under 13, the 
Commission would like to obtain additional comment on whether it should 
provide an exemption under which an operator's site or service would 
not be deemed child-directed if the operator undertakes an analysis of 
the site's or service's audience composition and determines that no 
more than a specific percentage of its users are likely to be children 
under 13. In particular, the Commission seeks comment on (1) whether 
the Rule should provide an exemption or other incentive to encourage 
operators to conduct an analysis of their sites' or services' user 
bases; (2) what the reliable means are by which operators can determine 
the likely ages of a site's or service's users; (3) whether and how the 
COPPA Rule should identify such means; (4) what the appropriate 
percentage of users should be to qualify for this potential exemption; 
\32\ and (5)

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whether such an exemption would be inconsistent with the COPPA Rule's 
multi-factor test for determining whether a website or online service, 
or a portion thereof, is directed to children.
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    \32\ Because this exemption would rely on a single factor (i.e., 
audience composition) to exempt sites or services from being deemed 
child-directed, the Commission anticipates that the appropriate 
percentage to qualify for this exemption would be very low.
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B. Changing the COPPA Rule's ``Actual Knowledge'' Standard

    In responding to the Commission's request for comment on the 
definition of ``website or online service directed to children,'' a 
number of commenters recommended that the Commission revise COPPA's 
actual knowledge standard by moving to a constructive knowledge 
standard.\33\ Namely, these commenters sought to bring within COPPA's 
jurisdiction those operators that have reason to know they may be 
collecting information from a child and those operators that willfully 
avoid gaining actual knowledge that they are collecting information 
from a child. Common Sense Media, for example, encouraged the 
Commission to broaden its view of ``actual knowledge'' to prevent the 
``willful disregard that children's personal[ ] information is being 
collected.'' \34\ Other commenters, referencing the California Consumer 
Privacy Act, similarly recommended that COPPA's actual knowledge 
standard should cover operators of general audience sites and services 
that ignore or willfully disregard the age of their users.\35\ 
Children's privacy advocate 5Rights Foundation further recommended that 
the Commission should consider current and historic audience 
composition evidence of both the specific service and similar services 
in determining whether an operator has met the actual knowledge 
standard.\36\
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    \33\ See, e.g., London School of Economics and Political 
Science, at 9 (noting that the FTC should re-examine its definition 
of child-directed websites and online services to include 
```constructive knowledge' i.e., what an operator ought to know 
about its users if they have carried their work in due diligence'') 
(bold typeface omitted); S. Egelman, at 3-4 (asserting that ``actual 
knowledge'' should include third-party recipients of data from a 
mobile app that can be identified as child-directed); Color of 
Change, at 4-5 (advocating that the FTC should move from an actual 
knowledge standard to a constructive knowledge standard); 
SuperAwesome, at 18 (recommending the Commission amend the 
definition of ``website or online service directed to children'' to 
include situations where an operator has, or should be reasonably 
expected to have, actual knowledge that it is collecting information 
from children or from users of a child-directed website or online 
service).
    \34\ Common Sense Media, at 12.
    \35\ 5Rights Foundation, at 3-4; Consumer Reports, at 8-9.
    \36\ 5Rights Foundation, at 4.
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    A number of industry commenters opposed the Commission adopting a 
constructive knowledge standard. Several of these commenters pointed to 
the COPPA statute's language \37\ and argued that the Commission lacks 
authority to change the actual knowledge standard.\38\ Others asserted 
that a constructive knowledge standard would result in operators 
collecting additional data from all users, including children, and 
might lead to a reduction in available online content because operators 
may decide to withdraw content intended for teenagers and young adults 
to avoid the risk of interacting with children.\39\ Additionally, the 
Association of National Advertisers stated that a constructive 
knowledge standard would conflict with the Commission's long-
established position that operators are not obligated to investigate 
the age of their users \40\ and would increase uncertainty about 
companies' potential COPPA obligations.\41\ Similarly, Engine, a non-
profit policy organization, noted that moving from the ``bright-line'' 
standard of actual knowledge to a less clear constructive knowledge 
standard could disproportionately burden small companies and start-
ups.\42\
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    \37\ 15 U.S.C. 6502(a)(1) (providing that ``[i]t is unlawful for 
an operator of a website or online service directed to children, or 
any operator that has actual knowledge that it is collecting 
personal information from a child, to collect personal information 
from a child in a manner that violates the regulations prescribed 
under subsection (b)'').
    \38\ See, e.g., ANA, at 4-5; Interactive Advertising Bureau 
(``IAB''), at 4-5; internet Association, at 19; Software & 
Information Industry Association (``SIIA''), at 4; The Toy 
Association, at 3, 8, 10, 16.
    \39\ See, e.g., Family Online Safety Institute (``FOSI''), at 6 
(noting that ``[i]f a constructive knowledge standard were imposed, 
it is likely that all general audience sites and services would 
start treating all users as children, or turn off any services that 
might benefit minors clearly older than 13. This would have serious 
implications for free speech, or could lead to an increase in age 
gating, which is ineffective and often results--paradoxically--in 
increased collection of data from all users, including children''); 
Digital Content Next, at 1 (stating that ``[w]e believe that 
expanding the actual knowledge standard might inadvertently harm the 
privacy of children in two ways. First, if COPPA were expanded to 
apply in situations where a company has no actual knowledge that the 
consumer is under 13 years of age or when the company is not 
providing services directed to children, companies would need to 
collect significantly more data from children and their parents or 
guardians to meet the obligations of COPPA including obtaining 
consent. Second, in order to avoid COPPA compliance, some companies 
may decide to withdraw content that is intended for teenagers or 
young adults in order to avoid the risk of interacting with 
children'').
    \40\ See, e.g., 64 FR 59888 at 59892 (noting that ``COPPA does 
not require operators of general audience sites to investigate the 
ages of their site's visitors . . .'').
    \41\ See ANA, at 5.
    \42\ Engine, at 5.
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    The Commission declines to change the Rule to bring operators of 
general audience sites and services under COPPA's jurisdiction based on 
constructive knowledge. As the Commission noted in 2011, Congress has 
already rejected a constructive knowledge approach with respect to 
COPPA. Specifically, the legislative history indicates that Congress 
originally drafted COPPA to apply to operators that ``knowingly'' 
collect personal information from children, a standard which would 
include actual, implied, or constructive knowledge.\43\ After 
consideration of witness testimony, however, Congress modified the 
knowledge standard in the final legislation to require ``actual 
knowledge.'' \44\ This deliberate decision to reject the more expansive 
approach makes clear that Congress did not intend for the ``actual 
knowledge'' standard to be read to include the concept of constructive 
knowledge. The Commission rejected calls for a move to a lesser 
knowledge standard for general audience operators while considering the 
2013 Amendments,\45\ and the Commission again declines to do so.\46\
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    \43\ See 76 FR 59804 at 59806, n. 26 (citing Senate and House 
bills), noting that ``Under federal case law, the term `knowingly' 
encompasses actual, implied, and constructive knowledge.''
    \44\ Id. (citing internet Privacy Hearing: Hearing on S. 2326 
Before the Subcomm. On Commc'ns of the S. Comm. On Commerce, 
Science, & Transp., 105th Cong. 1069 (1998)).
    \45\ See 76 FR 59804 at 59806.
    \46\ As noted above, various commenters recommended that the 
Rule's actual knowledge standard cover operators of general audience 
sites and services that ignore or willfully disregard the age of 
their users. See, e.g., Common Sense Media, at 12; 5Rights 
Foundation, at 3-4; Consumer Reports, at 8-9.
    The concept of actual knowledge includes willful disregard. See, 
e.g., Glob.-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766 
(2011) (noting that ``[i]t is also said that persons who know enough 
to blind themselves to direct proof of critical facts in effect have 
actual knowledge of those facts''). Therefore, the Rule already 
applies to instances in which an operator of a general audience site 
or service willfully disregards the fact that a particular user is a 
child.
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III. Comments on the Rebuttable Presumption

    Operators of websites or online services directed to children that 
collect personal information from their users must comply with COPPA 
regardless of whether they have actual knowledge that a particular user 
is, in fact, a child. Accordingly, as a practical matter, operators of 
child-directed sites and services must presume that all users are 
children.\47\
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    \47\ See, e.g., 78 FR 3972 at 3984 (``The Commission retains its 
longstanding position that child-directed sites or services whose 
primary target audience is children must continue to presume all 
users are children and to provide COPPA protections accordingly'').
---------------------------------------------------------------------------

    Through the 2013 Amendments, the Commission extended COPPA 
liability to operators that have actual knowledge

[[Page 2038]]

they are collecting personal information directly from the users of 
another website or online service that is child-directed.\48\ Under the 
Rule, such an operator ``has effectively adopted that child-directed 
content as its own and that portion of its service may appropriately be 
deemed to be directed to children.'' \49\
---------------------------------------------------------------------------

    \48\ See 16 CFR 312.2, definition of ``website or online service 
directed to children,'' paragraph 2.
    \49\ 78 FR 3972 at 3978.
---------------------------------------------------------------------------

    The Commission sought comments in its 2019 Rule Review Initiation 
on whether it should permit general audience platforms that allow third 
parties to upload content to the platform to rebut the presumption that 
all users of uploaded child-directed content are in fact children. In 
seeking comment on this issue, the Commission stated that absent actual 
knowledge that the uploaded content is child-directed, the platform 
operator is not responsible for complying with the Rule. Therefore, the 
FTC noted that the platform operator may have an incentive to avoid 
gaining knowledge about the nature of the uploaded content.\50\ The 
Commission asked whether allowing general audience platform operators 
to rebut this presumption, thereby allowing them to treat users under 
age 13 differently from older users, would incentivize platform 
operators to take affirmative steps to identify child-directed content 
and treat users of that content in accordance with the Rule. The 
Commission also asked about the types of steps platforms could take to 
overcome the presumption that all users of child-directed content are 
children.
---------------------------------------------------------------------------

    \50\ 84 FR 35842 at 35845-35846. In extending liability to 
operators of general audience sites and services with actual 
knowledge, the Commission discussed, but expressly rejected, 
imposing a ``reason to know'' standard. 78 FR 3972 at 3977-78. 
Accordingly, the 2013 Amendments do not impose a duty on operators 
of general audience websites and online services to investigate 
whether they are collecting personal information from users of 
child-directed sites or services.
---------------------------------------------------------------------------

    Relying on a variety of arguments, many consumer and privacy 
advocates opposed the notion of modifying the Rule to allow operators 
of general audience platforms to rebut the presumption that users of 
child-directed content uploaded to the platform by third parties are 
children. For example, a coalition of consumer organizations argued 
against allowing general audience platforms to rebut the presumption, 
pointing to the fact that families often share devices, accounts, and 
apps and that, as a result, many children likely access child-directed 
content while logged into a parent's account. Because of this, they 
argued that if the FTC modifies the presumption, ``it would lead to 
widespread mislabeling of children as adults and large numbers of 
under-protected children.'' \51\ Other commenters echoed the concern 
that because users in a household may share devices that are 
persistently signed in, operators may incorrectly determine that a user 
is an adult.\52\
---------------------------------------------------------------------------

    \51\ Georgetown University Law Center's Institute for Public 
Representation submitted a joint comment on behalf of the following 
nineteen consumer groups: Campaign for a Commercial-Free Childhood; 
The Center for Digital Democracy; Alana Institute; American Academy 
of Pediatrics; Badass Teachers Association; Berkeley Media Studies 
Group; Consumer Action; Consumer Watchdog; Defending the Early 
Years; Electronic Frontier Foundation; Obligation, Inc.; P.E.A.C.E 
(Peace Educators Allied for Children Everywhere); Parent Coalition 
for Student Privacy; Parents Across America; Parents Television 
Council; Public Citizen; Story of Stuff; TRUCE (Teachers Resisting 
Unhealthy Childhood Entertainment); and U.S. PIRG (``Joint Consumer 
Groups''), at iii, 35-36.
    \52\ See, e.g., Consumer Reports, at 19 (``[B]rowsers and other 
connected services are increasingly using always-logged-in features 
in order to make the browsing experience more seamless across 
devices . . . Although this allows the company to easily sync data 
across devices, it means that if a child then uses that device to go 
to YouTube [K]ids or another service it will appear that an adult is 
logged on and viewing the content''); SuperAwesome, at 28 (``Given 
the prevalence of shared devices, the only current method to safely 
detect whether a child or an adult is viewing particular content is 
by virtue of the type of content. E.g., preschool content is mostly 
likely viewed by preschoolers. We are particularly concerned about 
logged-in parents on kids' content, where there is a presumption 
that the adult is enjoying the kids' content. In our experience, 
this is rarely the case. In the vast majority of situations it is a 
child using an adult's device. For this reason, the only safe 
approach is to default to considering the user a child based on a 
subjective assessment of the content'') (bold typeface omitted).
---------------------------------------------------------------------------

    Another commenter, while acknowledging the ``perverse incentive'' 
operators have to avoid gaining actual knowledge, raised concern about 
operators' ability to effectively establish which of their users are 
children.\53\ The commenter argued that, until operators are 
transparent about methods used to determine which users are children 
and such methods are deemed effective, permitting operators to rebut 
the presumption may result in children being treated as adults.\54\
---------------------------------------------------------------------------

    \53\ 5Rights Foundation, at 4 (also arguing that that the most 
privacy-protective way of addressing the incentive is to make it 
more difficult for operators to avoid gaining actual knowledge). See 
also Consumer Reports, at 18-19 (raising concern about the lack of 
transparency as to how general audience services determine the 
population of children that use the service).
    \54\ 5Rights Foundation, at 4.
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    One commenter argued that, ``in the vast majority of cases,'' users 
of child-directed content are, in fact, children.\55\ This commenter 
further stated that allowing operators to rebut the presumption would 
prioritize allowing companies to engage in targeted advertising over 
ensuring that general audience platforms comply with COPPA.\56\ Another 
commenter noted that, despite the alleged existence of subcultures of 
adult viewership of kids' content, the adult viewership of such content 
is likely very small.\57\ The commenter further argued that protecting 
those adults' right to receive personalized advertising does not 
outweigh the risk of collecting personal data from children and 
tracking them online.\58\
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    \55\ Consumer Reports, at 19.
    \56\ Id.
    \57\ SuperAwesome, at 27.
    \58\ Id. See also P. Aftab, at 15 (arguing that the convenience 
of adults accessing child-directed material should not outweigh 
children's privacy).
---------------------------------------------------------------------------

    A number of State Attorneys General argued that modifying the Rule 
to allow rebuttal is unlikely to incentivize platforms to identify and 
police child-directed content.\59\ These commenters claimed that, even 
with the ability to rebut the presumption, platforms would have a 
greater incentive not to know about the presence of child-directed 
content because this would allow them to collect data for targeted ads 
from all users.\60\ Additionally, an FTC-approved COPPA Safe Harbor 
program argued that allowing rebuttal would ``be complex and unfairly 
benefit large tech companies who may be the only companies with the 
wherewithal, rich customer data, and back-end infrastructure to meet 
the criteria for rebuttal.'' \61\
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    \59\ Joint Attorneys General, at 13-14 (adding that they do not 
support permitting a rebuttable presumption absent robust measures--
beyond logged in status or periodic reauthorization--to confirm a 
user is 13 or older, stating that such measures can include 
requiring operators to ask during the account creation process 
whether a child ever uses the account holder's device).
    \60\ Id. At 13.
    \61\ kidSAFE, at 13 (also suggesting that the Rule's existing 
mixed audience category could potentially serve the underlying 
purpose of not treating child-directed content audiences as 
exclusively under 13).
---------------------------------------------------------------------------

    On the other hand, a number of industry commenters supported 
allowing general audience platforms to rebut the presumption that all 
users of child-directed content are necessarily children. Google argued 
that rebuttal ``with the appropriate safeguards, would allow those 
users to benefit from social engagement with the content and would 
allow content creators to benefit from increased monetization options, 
supporting continued investment in such content.'' \62\ Without the 
ability to rebut the presumption, Google argued that platforms must 
degrade adults' user

[[Page 2039]]

experience, including by preventing interactivity with other adults. 
Google also distinguished general audience platforms with third-party 
content from ``static'' child-directed websites intended for a single 
audience, noting that such platforms ``have significant adult user 
bases that engage with traditionally child-directed content.'' \63\
---------------------------------------------------------------------------

    \62\ Google, at 7-8, 11-12 (also arguing that allowing rebuttal 
does not require a Rule modification because the presumption is not 
codified in the COPPA statute or Rule).
    \63\ Id. At 8.
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    Other commenters made similar arguments. One trade association 
stated that some general audience platforms ``have significant adult 
user bases'' and feature child-directed content that may appeal to 
users of varying ages, such as crafting or science education 
content.\64\ It claimed that the audience presumption harms adult users 
of child-directed content by denying them the ability ``to find 
community, learn, and discover new content.'' \65\ Another trade 
association noted that adults might want ``to interact with child-
directed content for a variety of reasons, including nostalgia or to 
find content suitable for their children or students.'' \66\
---------------------------------------------------------------------------

    \64\ SIIA, at 5.
    \65\ Id.
    \66\ CCIA, at 13.
---------------------------------------------------------------------------

    A majority of the commenters that support modifying the Rule to 
permit rebuttal also recommended against the Commission proscribing 
specific means by which a general audience platform could rebut the 
presumption, calling instead for a flexible, standards-based approach 
that would allow platforms to employ a variety of measures to overcome 
the presumption. For example, citing ``advancements in technology and 
age-screening,'' one trade association recommended allowing rebuttal 
through reliance on a neutral age gate combined with additional steps 
to confirm identity, such as re-entry of a password.\67\ The commenter 
also suggested that the Commission allow industry to explore 
alternative methods such as fingerprint, voiceprint, or device PIN.\68\ 
Other commenters recommended similar flexibility in approach.\69\
---------------------------------------------------------------------------

    \67\ internet Association, at 18-19.
    \68\ Id. At 19.
    \69\ See Centre for Information Policy Leadership (``CIPL''), at 
7 (supporting rebuttal where platforms take reasonable steps such as 
a neutral age gate plus additional verification, adding that the 
Commission should permit companies to adopt their own approach as 
long as they meet certain standards set by FTC); CCIA, at 14 
(recommending the FTC adopt an ``adaptable standards-based 
approach'' for permitting general audience services to treat adult 
users interacting with child-directed content as adults, including 
the use of neutral age screening in conjunction with periodic 
password reauthorization and ``verification methods that may be 
appropriate in additional contexts, such as submitting a voiceprint 
or device PIN''); Google, at 10-11 (recommending the FTC adopt a 
``reasonably calculated'' standard similar to the parental consent 
standard that provides reasonable assurance that the person engaging 
with the content is an adult, and further suggesting use of a 
neutral age gate in combination with such mechanisms as password re-
authentication, fingerprint, or device PINs); SIIA, at 5 (supporting 
a ``standards-based approach to rebut presumption relying on neutral 
age gates plus additional steps like password authorization or 
alternative verification methods''); U.S. Chamber of Commerce, at 7 
(supporting an adaptable standards-based approach rather than 
prescriptive measures); Yoti, at 16 (supporting the various 
mechanisms suggested in the Commission's 2019 Rule Review 
Initiation, but adding that because some may not work in certain 
circumstances, they should be options as opposed to a mandatory 
list).
---------------------------------------------------------------------------

    Many of the comments supporting rebuttal of the presumption also 
argued against tying rebuttal to a requirement that the platform 
investigate and identify child-directed content on the platform. These 
commenters asserted that such a requirement would change the Rule's 
actual knowledge standard to a constructive knowledge standard, which 
would ``contravene [c]ongressional intent'' \70\ and impose an 
unreasonable burden on platforms that would chill investment into the 
production of child-directed content.\71\ One commenter cautioned that 
requiring the platform operators to identify whether uploaded content 
is child-directed could raise First Amendment concerns.\72\
---------------------------------------------------------------------------

    \70\ CCIA, at 14.
    \71\ See U.S. Chamber of Commerce, at 7; ANA, at 5-6; Google, at 
11.
    \72\ Center for Democracy & Technology (``CDT''), at 9 (further 
adding that the Commission should not consider costs and benefits 
unrelated to privacy (e.g., exposure to age-inappropriate content) 
as such concerns fall outside COPPA's statutory focus). But see 
SuperAwesome, at 29 (recommending the Commission consider costs and 
benefits unrelated to privacy, noting that allowing a rebuttal 
``will significantly increase the risk of exposing children to 
inappropriate content, including inappropriate advertising, and 
potentially dangerous user-generated content'').
---------------------------------------------------------------------------

    After reviewing the submitted comments, the Commission does not 
propose modifying the Rule to permit general audience platforms to 
rebut the presumption that all users of child-directed content are 
children. The Commission finds persuasive the concerns raised in the 
comments about the practicality of allowing operators of such platforms 
to rebut this presumption. In particular, the Commission believes that 
the reality of parents and children sharing devices, along with account 
holders remaining perpetually logged into their accounts, could make it 
difficult for an operator to distinguish reliably between those users 
who are children and those who are not.
    The Commission recognizes that allowing platforms to rebut the 
presumption would permit additional forms of monetization and, in some 
instances, provide additional functionality and convenience for adults 
interacting with child-directed content. Such benefits, however, simply 
do not outweigh the important goal of protecting children's privacy. 
Moreover, as set forth in the Commission's 2019 Rule Review Initiation, 
the reason for considering whether to allow platforms to rebut the 
audience presumption was to create an incentive for them to ``identify 
and police child-directed content uploaded by others.'' \73\ Many 
commenters supporting the addition of this rebuttal expressed strong 
opposition to such a duty, thereby undercutting the rationale for 
modifying the Rule.
---------------------------------------------------------------------------

    \73\ 84 FR 35842 at 35846.
---------------------------------------------------------------------------

    Finally, through its recognition of the ``mixed audience'' category 
of websites and online services, the Commission essentially allows 
operators to rebut the presumption as to the users of a subset of 
child-directed sites and services that do not target children as their 
primary audience. For example, where third-party content on a platform 
is child-directed under the Rule's multi-factor test but the platform 
does not target children as its primary audience, the operator can 
request age information and provide COPPA protections only to those 
users who are under 13. The Commission believes the mixed audience 
category affords operators an appropriate degree of flexibility.\74\
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    \74\ While it is possible that the sharing of devices between 
parents and children can lead to complexities in determining the 
``mixed audience'' nature of a website or online service, the 
Commission believes on balance that there is value in continuing to 
allow for a mixed audience designation.
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IV. Proposed Modifications to the Rule

    As discussed in Part I, comments reflect overall support for COPPA 
and a recognition that it is an important and helpful tool for 
protecting children's online privacy. Additionally, many comments 
indicate support for the 2013 Amendments.\75\
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    \75\ See, e.g., SuperAwesome; PRIVO; ESA; Electronic Privacy 
Information Center (``EPIC''); and Joint Consumer Groups. But see, 
e.g., Skyship Entertainment; J. Johnston (J House Vlogs); H. and S. 
Jho (Sockeye Media LLC); and ICLE. These commenters, many of whom 
are content creators on YouTube, opposed the Rule changes and/or the 
FTC's 2019 enforcement action against Google LLC and its subsidiary 
YouTube, LLC (``YouTube Case''), Federal Trade Commission & People 
of the State of New York v. Google LLC & YouTube, LLC, Case No. 
1:19-cv-2642 (D.D.C. 2019), available at https://www.ftc.gov/legal-library/browse/cases-proceedings/172-3083-google-llc-youtube-llc. 
These commenters asserted that the 2013 Amendments and the YouTube 
Case have affected the availability of children's content on YouTube 
due to creators' inability to monetize through personalized 
advertisements. Additional commenters criticized the 2013 Amendments 
for other reasons, such as purported negative consequences to 
industry or beliefs that the 2013 Amendments strayed from the 
purpose of the COPPA statute. See, e.g., Committee for Justice; 
TechFreedom; and Competitive Enterprise Institute.

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[[Page 2040]]

    Despite this overall support, the Commission believes it is 
appropriate to modify a number of the Rule's provisions in light of the 
record developed through the 2019 Rule Review Initiation--including the 
COPPA Workshop and the large number of public comments received--as 
well as the FTC's two decades of experience enforcing the Rule. The 
Commission intends these modifications to update certain aspects of the 
Rule, taking into account technological and other relevant 
developments, and to provide additional clarity to operators on the 
Rule's existing requirements. Specifically, the Commission proposes 
modifying most provisions of the Rule, namely the following areas: 
Definitions; Notice; Parental Consent; Parental Right to Review; 
Confidentiality, Security, and Integrity of Children's Personal 
Information; Data Retention and Deletion; and Safe Harbor Programs. In 
addition, the Commission proposes minor modifications to the sections 
on Scope of Regulations and Voluntary Commission Approval Processes to 
address technical corrections.
    Additionally, the Commission proposes some revisions to the Rule to 
address spelling, grammatical, and punctuation issues. For example, as 
noted above, the Commission proposes to modify Sec.  312.1 regarding 
the scope of regulations, specifically to change the location of 
commas. Similarly, the Commission proposes amending the Rule to change 
the term ``Web site'' to ``website'' throughout the Rule, including in 
various definitions that use this term. This construction aligns with 
the COPPA statute's use of the term, as well as how that term is 
currently used in today's marketplace. This NPRM incorporates this 
proposed change in all instances in which the term ``Web site'' is 
used. The Commission does not intend for these proposed modifications 
to alter existing obligations or create new obligations under the Rule.

A. Definitions (16 CFR 312.2)

    The Commission proposes to modify a number of the Rule's 
definitions in order to update the Rule's coverage and functionality 
and, in certain areas, to provide greater clarity regarding the Rule's 
intended application. The Commission proposes modifications to the 
definitions of ``online contact information'' and ``personal 
information.'' The Commission also proposes modifications to the 
definition of ``website or online service directed to children,'' 
including by adding a stand-alone definition for ``mixed audience 
website or online service.'' Additionally, the Commission proposes 
adding definitions for ``school'' and ``school-authorized education 
purpose.'' These two new definitions relate to the Rule's proposed new 
parental consent exception--a codification of longstanding Commission 
guidance by which operators rely on school authorization to collect 
personal information in limited circumstances rather than on parental 
consent. Finally, the Commission proposes modifications to the second 
paragraph of the definition of ``support for the internal operations of 
the website or online service.''
1. Online Contact Information
    Section 312.2 of the Rule defines ``online contact information'' as 
``an email address or any other substantially similar identifier that 
permits direct contact with a person online, including but not limited 
to, an instant messaging user identifier, a voice over internet 
protocol (VOIP) identifier, or a video chat user identifier.'' Online 
contact information is considered ``personal information'' under the 
Rule. Under certain parental consent exceptions, the Rule permits 
operators to collect online contact information from a child for 
certain purposes, such as initiating the process of obtaining 
verifiable parental consent, without first obtaining verifiable 
parental consent.
    To improve the Rule's functionality, the Commission proposes 
amending this definition by adding ``an identifier such as a mobile 
telephone number provided the operator uses it only to send a text 
message'' to the non-exhaustive list of identifiers that constitute 
``online contact information.'' As discussed later in this Part, this 
modification would allow operators to collect and use a parent's or 
child's mobile phone number in certain circumstances, including in 
connection with obtaining parental consent through a text message.
    Although the Commission did not raise the issue of adding mobile 
telephone numbers to the online contact information definition in its 
2019 Rule Review Initiation, some commenters supported such a 
modification in discussing the Rule's parental consent requirement.\76\ 
One commenter noted that parents increasingly rely on telephone and 
cloud-based text messaging services,\77\ and another similarly noted 
that permitting parents to utilize text messages to provide consent 
would be more in sync with current technology and parental 
expectations.\78\ Commenters also stated that mobile communication 
mechanisms are more likely to result in operators reaching parents for 
the desired purpose of providing notice and obtaining consent, and that 
sending a text message may be one of the most direct and easily 
verifiable methods of contacting a parent.\79\ Further, one commenter 
posited that the chance of a child submitting his or her own mobile 
number in order to circumvent a valid consent mechanism is no greater 
than, for instance, a child submitting his or her own email 
address.\80\
---------------------------------------------------------------------------

    \76\ See, e.g., kidSAFE, at 3-4. More generally, several other 
commenters recommended modifying the Rule to allow the use of text 
messaging in connection with obtaining parental consent. See The Toy 
Association, at 4; ESA, at 24-26; ANA, at 12; Entertainment Software 
Rating Board (``ESRB''), at 8.
    \77\ kidSAFE, at 4.
    \78\ ESA, at 24-25.
    \79\ kidSAFE, at 3-4; ANA, at 12.
    \80\ kidSAFE, at 4.
---------------------------------------------------------------------------

    The Commission agrees that permitting parents to provide consent 
via text message would offer them significant convenience and utility. 
The Commission also recognizes that consumers are likely accustomed to 
using mobile telephone numbers for account creation or log-in purposes. 
For these reasons, the Commission is persuaded that operators should be 
able to collect parents' mobile telephone numbers as a method to obtain 
consent from the parent. Therefore, the Commission proposes adding 
mobile telephone numbers to the definition of ``online contact 
information.''
    Modifying the definition in this way, however, will also enable 
operators to collect and use a child's mobile telephone number to 
communicate with the child, including--under various parental consent 
exceptions--prior to the operator obtaining parental consent.\81\ The 
Commission does not seek to allow operators to use children's mobile 
telephone numbers to call them prior to the operator obtaining parental 
consent. Therefore, the Commission proposes including the qualifier 
``provided the operator uses it only to send a text message'' to ensure 
that operators cannot call the child using the mobile telephone number, 
unless and until the operator seeks and obtains a parent's verifiable 
parental consent to do so.\82\
---------------------------------------------------------------------------

    \81\ 16 CFR 312.5(c)(1), (3), (4), (5), and (6).
    \82\ Because various parental consent exceptions allow operators 
to collect a child's ``online contact information'' without first 
obtaining verifiable parental consent, the Commission proposes 
limiting operators from using such information to call a child. 
However, this proposal does not prevent an operator from making 
telephone calls after the operator has obtained consent. Indeed, the 
definition of ``personal information'' includes a telephone number 
under COPPA and the COPPA Rule, and neither the statute nor the Rule 
includes a prohibition on using that information to make telephone 
calls.

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[[Page 2041]]

    This proposed modification is a departure from the position the 
Commission previously took when it declined to include mobile telephone 
numbers within the definition of ``online contact information.'' In 
discussing the 2013 Amendments, the Commission stated that the COPPA 
statute did not contemplate adding mobile telephone numbers as a form 
of online contact information, and therefore it determined not to 
include mobile telephone numbers within the definition.\83\ However, 
the Commission also stated at that time that the list of identifiers 
constituting online contact information was non-exhaustive and would 
encompass other substantially similar identifiers that permit direct 
contact with a person online.\84\ As part of the 2013 Amendments, the 
Commission revised the definition to include examples of such 
identifiers, and the Commission now believes that adding mobile 
telephone numbers to this list is appropriate.
---------------------------------------------------------------------------

    \83\ See 78 FR 3972 at 3975. At that time, the Commission also 
questioned whether adding mobile telephone numbers would result in 
greater convenience for parents in providing consent, noting that 
children might have difficulty distinguishing between a parent's 
mobile number and a landline number. See 78 FR 3972 at 3975. This 
concern seems less significant today given that many more consumers 
now rely exclusively on their mobile phone.
    \84\ 78 FR 3972 at 3975, citing 76 FR 59804 at 59810.
---------------------------------------------------------------------------

    Specifically, consumers today widely use over-the-top messaging 
platforms, which are platforms that utilize the internet instead of a 
carrier's mobile network to exchange messages. These platforms include 
Wi-Fi messaging applications, voice over internet protocol applications 
that have messaging features, and other messaging applications. Because 
a consumer's mobile telephone number is often used as the unique 
identifier through which a consumer can exchange messages through these 
over-the- top platforms, mobile telephone numbers permit direct contact 
with a person online, thereby meeting the statutory requirements for 
this definition.\85\
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 6501(12) (providing that ``the term `online 
contact information' means an email address or another substantially 
similar identifier that permits direct contact with a person 
online'' (emphasis added)).
---------------------------------------------------------------------------

    When the Commission enacted the 2013 Amendments, the use of over-
the-top messaging platforms was more nascent and growing in adoption. 
Today, the prevalent and widespread adoption of such messaging 
platforms allows consumers to use these platforms as their primary form 
of text messaging. Therefore, the Commission finds it appropriate to 
propose amending the definition of ``online contact information'' to 
include ``an identifier such as a mobile telephone number provided the 
operator uses it only to send a text message.'' The Commission welcomes 
comment on this proposed modification. In particular, the Commission is 
interested in understanding whether allowing operators to contact 
parents through a text message to obtain verifiable parental consent 
presents security risks to the recipient of the text message, 
especially if the parent would need to click on a link provided in the 
text message.
2. Personal Information
    The COPPA statute defines ``personal information'' as individually 
identifiable information about an individual collected online, 
including, for example, a first and last name, an email address, or a 
Social Security number.\86\ The COPPA statute also includes within the 
definition ``any other identifier that the Commission determines 
permits the physical or online contacting of a specific individual.'' 
\87\
---------------------------------------------------------------------------

    \86\ See 15 U.S.C. 6501(8).
    \87\ 15 U.S.C. 6501(8)(F). As part of the 2013 Amendments, the 
Commission used this statutory authority to add several new 
identifiers to the COPPA Rule's definition of ``personal 
information.'' See 78 FR 3972 at 3978-83. For example, the 
Commission added a photograph, video, or audio file containing a 
child's image or voice, and it also included geolocation information 
sufficient to identify street name and name of a city or town. 
Additionally, the Commission added persistent identifiers that can 
be used to recognize a user over time and across different websites 
or online services, which the Rule had previously only covered when 
associated with individually identifiable information. See 64 FR 
59888 at 59912.
---------------------------------------------------------------------------

a. Biometric Data
    The Commission proposes using its statutory authority to expand the 
Rule's coverage by modifying the Rule's definition of ``personal 
information'' to include ``[a] biometric identifier that can be used 
for the automated or semi-automated recognition of an individual, 
including fingerprints or handprints; retina and iris patterns; genetic 
data, including a DNA sequence; or data derived from voice data, gait 
data, or facial data.'' \88\ The Commission believes this proposed 
modification is necessary to ensure that the Rule is keeping pace with 
technological developments that facilitate increasingly sophisticated 
means of identification.
---------------------------------------------------------------------------

    \88\ Given that the Rule's definition of ``personal 
information'' currently includes ``a photograph, video, or audio 
file where such file contains a child's image or voice,'' the 
Commission believes facial features, voice, and gait are already 
covered under the Rule. 16 CFR 312.2, definition of ``personal 
information,'' paragraph 8. However, in light of the inherently 
personal and sensitive nature of data derived from voice data, gait 
data, and facial data, the Commission proposes to cover this data 
within the proposed list of biometric identifiers.
---------------------------------------------------------------------------

    The majority of comments addressing the question of whether to 
expand the Rule's definition of ``personal information'' supported the 
addition of biometric data.\89\ These commenters asserted that 
different types of biometric data can be used to contact specific 
individuals. For example, a coalition of consumer groups recommended 
adding biometric data, including genetic data, fingerprints, and 
retinal patterns, to the Rule's enumerated list of ``personal 
information.'' \90\ These commenters cited consumer products' current 
use of biometrics to identify and authenticate users through such 
mechanisms as fingerprints and face scans.\91\ They also noted that 
while some types of personal information may be altered to protect 
privacy, biometric data collected today may be used to identify and 
contact specific children for the rest of their lives.\92\ Several 
other commenters also argued that the permanent and unalterable nature 
of biometric data makes it particularly sensitive.\93\ Additional 
commenters noted that many states have expanded the definition of 
personally identifiable information to include biometric data as have 
other federal laws and regulations, such as the Department of 
Education's Family Educational Rights and Privacy Act (``FERPA'') 
Regulations, 34 CFR 99.3.\94\
---------------------------------------------------------------------------

    \89\ See, e.g., Attorney General of Arizona, at 2; Joint 
Attorneys General, at 7; Consumer Reports, at 14; SuperAwesome, at 
12; CARU, at 3-5; ESRB, at 5; and kidSAFE, at 6.
    \90\ Joint Consumer Groups, at 52-53.
    \91\ Id. at 53 (citing Heather Kelly, Fingerprints and Face 
Scans Are the Future of Smartphones. These Holdouts Refuse to Use 
Them, Wash. Post (Nov. 15, 2019)).
    \92\ Joint Consumer Groups, at 53.
    \93\ CARU, at 4; H. Adams, at 3; Joint Attorneys General, at 7, 
11-12.
    \94\ Future of Privacy Forum (``FPF''), at 4-5; D. Derigiotis 
Burns Wilcox, at 1-2.
---------------------------------------------------------------------------

    A small number of commenters urged the Commission to proceed 
cautiously with respect to adding biometric data to the Rule's personal 
information definition. These commenters suggested that such an 
expansion could stifle innovation \95\ or questioned whether biometric 
data allows the physical or online contacting of a specific 
individual.\96\ Some commenters also

[[Page 2042]]

recommended that, if the Commission does define biometric data as 
personal information, it should consider appropriate exceptions, for 
example, where the data enhances the security of a child-directed 
service \97\ or the operator promptly deletes the data.\98\
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    \95\ The App Association (``ACT''), at 4.
    \96\ CCIA, at 4; The Toy Association, at 3, 17.
    \97\ The Toy Association, at 3, 17.
    \98\ kidSAFE, at 6.
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    The Commission believes that, as with a photograph, video, or audio 
file containing a child's image or voice, biometric data is inherently 
personal in nature. Indeed, the Commission agrees with the many 
commenters \99\ who argued that the personal, permanent, and unique 
nature of biometric data makes it sensitive, and the Commission 
believes that the privacy interest in protecting such data is a strong 
one.
---------------------------------------------------------------------------

    \99\ See, e.g., Joint Consumer Groups, at 53; CARU, at 3-5; H. 
Adams, at 3; Joint Attorneys General, at 11-12.
---------------------------------------------------------------------------

    And, as with some facial and voice recognition technologies, the 
Commission believes that biometric recognition systems are sufficiently 
sophisticated to permit the use of identifiers such as fingerprints and 
handprints; retina and iris patterns; genetic data, including a DNA 
sequence; and data derived from voice data, gait data, or facial data 
to identify and contact a specific individual either physically or 
online.
    The Commission notes that the specific biometric identifiers that 
it proposes adding to the Rule's personal information definition are 
examples and not an exhaustive list. The Commission welcomes further 
comment on this proposed modification, including whether it should 
consider additional biometric identifier examples and whether there are 
appropriate exceptions to any of the Rule's requirements that it should 
consider applying to biometric data, such as exceptions for biometric 
data that has been promptly deleted.
b. Inferred and Other Data
    In addition to biometric data, the Commission also asked for 
comment on whether it should expand the Rule's definition of ``personal 
information'' to include data that is inferred about, but not directly 
collected from, children, or other data that serves as a proxy for 
``personal information.'' Several commenters recommended such an 
expansion.\100\ For example, one commenter stated that inferred data, 
including predictive behavior, is often incredibly sensitive and that 
even when it is supplied in the aggregate, can be easily re-
identified.\101\ The commenter also noted that certain State laws 
include inferred data in their definitions of personally identifiable 
information.\102\ Another pointed to the ability of analysts to infer 
personal information that the Rule covers, such as an individual's 
geolocation, from data that currently falls outside the Rule's 
scope.\103\
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    \100\ See, e.g., Joint Consumer Groups, at 53-54 (supporting the 
inclusion of inferred data); London School of Economics, at 1, 9 
(supporting the inclusion of inferred data from profiling and other 
data analytics); SuperAwesome, at 18 (supporting the inclusion of 
inferred data, health and activity information derived from fitness 
trackers, and household viewing data from automated content 
recognition systems in televisions and video streaming devices); C. 
Frascella, at 2-3 (supporting the inclusion of personal information 
collected from children through digital reproduction technology); 
Parent Coalition for Student Privacy, at 5-8 (supporting, among 
other things, the inclusion of inferred data and proxy data, such as 
the language spoken at home and the length of time the child has 
lived in the United States); UnidosUS (``Unidos''), at 5 (urging the 
Commission to study the use of ``cultural cues'' as personal 
information). See also, e.g., National Center on Sexual 
Exploitation, at 2 (expressing general support for expanding the 
definition of ``personal information'' to protect children).
    \101\ Parent Coalition for Student Privacy, at 5.
    \102\ Id. (citing Colorado's Student Data Transparency and 
Security Act and California's Consumer Privacy Act).
    \103\ Joint Consumer Groups, at 54 (``For example, non-
geolocation ambient data collected by a mobile device operating 
system does not constitute an independently enumerated category of 
personal information under the current iteration of the COPPA Rule. 
But a savvy analyst could use data collected by a mobile device to 
infer specific geolocation or other details that clearly would fall 
under the COPPA Rule definition of personal information'') (emphasis 
in original).
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    Commenters opposed to including inferred data stated that such an 
expansion would not be in accordance with the COPPA statute, which 
covers data collected ``from'' a child.\104\ Some commenters opposed to 
the inclusion of inferred data argued that inferred data does not 
permit the physical or online contacting of the child.\105\ Some 
commenters also expressed concern that adding inferred data would 
create ambiguity and hamper companies' abilities to provide websites 
and online services to children, would stifle new products and 
services, and may prohibit the practice of contextual advertising.\106\
---------------------------------------------------------------------------

    \104\ See, e.g., IAB, at 4; NCTA--The internet and Television 
Association (``NCTA''), at 5-7; U.S. Chamber of Commerce, at 3. See 
also CCIA, at 4 (asserting that the COPPA Rule already covers the 
processing of personal information to derive inferences about a 
specific user and that the use of aggregated data that does not 
relate to a specific user is outside the scope of the COPPA 
statute's definition of ``personal information'').
    \105\ See, e.g., IAB, at 4; The Toy Association, at 16-17.
    \106\ See CIPL, at 2; U.S. Chamber of Commerce, at 3; IAB, at 4; 
internet Association, at 5-6; PRIVO, at 8.
---------------------------------------------------------------------------

    The Commission has decided not to propose including inferred data 
or data that may serve as a proxy for ``personal information'' within 
the definition. As several commenters correctly note, the COPPA statute 
expressly pertains to the collection of personal information from a 
child.\107\ Therefore, to the extent data is collected from a source 
other than the child, such information is outside the scope of the 
COPPA statute and such an expansion would exceed the Commission's 
authority. Inferred data or data that may serve as a proxy for 
``personal information'' could fall within COPPA's scope, however, if 
it is combined with additional data that would meet the Rule's current 
definition of ``personal information.'' In such a case, the existing 
``catch-all'' provision of that definition would apply.\108\
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    \107\ 15 U.S.C. 6502(a)(1).
    \108\ See 16 CFR 312.2, definition of ``personal information,'' 
paragraph 10 (defining ``personal information'' to include 
``[i]nformation concerning the child or the parents of that child 
that the operator collects online from the child and combines with 
an identifier described in this definition'').
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c. Persistent Identifiers
    In 2013, the Commission used its authority under 15 U.S.C. 
6501(8)(F) to modify the Rule's definition of ``personal information'' 
to include persistent identifiers that can be used to recognize a user 
over time and across different websites or online services. Prior to 
that change, the Rule covered persistent identifiers only when they 
were combined with certain types of identifying information.\109\ As 
part of the 2019 Rule Review Initiation, the Commission asked for 
comment on whether this modification has resulted in stronger privacy 
protections for children. The Commission also asked whether the 
modification has had any negative consequences.
---------------------------------------------------------------------------

    \109\ See 64 FR 59888 at 59912.
---------------------------------------------------------------------------

    A number of commenters, citing a variety of reasons, argued that 
the amendment to include ``stand-alone'' persistent identifiers as 
personal information was incorrect or had caused harm. Several 
commenters claimed that persistent identifiers alone do not allow for 
the physical or online contacting of a child, and thus should not be 
included unless linked to other forms of personal information.\110\ 
Commenters also argued

[[Page 2043]]

that the persistent identifier modification harmed both operators and 
children. Specifically, some commenters pointed to operators' lost 
revenue from targeted advertising, which requires collection of 
persistent identifiers, and the resulting reduction of available child-
appropriate content online due to operators' inability to monetize such 
content.\111\ One commenter stated that while the 2013 modification 
``served the widely held goal of excluding children from interest-based 
advertising,'' it created uncertainty for operators' use of data for 
internal operations.\112\ The commenter suggested that the Commission 
consider exempting persistent identifiers used for internal operations 
from the Rule's deletion requirements.\113\
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    \110\ See, e.g., TechFreedom, at 8 (``[P]ersistent identifiers 
on their own can only identify a device, not a `specific person' as 
the COPPA statute requires''); Competitive Enterprise Institute, at 
2 (``[P]ersistent online identifiers do not `permit[] the physical 
or online contacting of a specific individual' in the sense that 
Congress contemplated when it enacted COPPA in 1998''); ICLE, at 6 
(``Neither IP addresses nor device identifiers alone `permit the 
physical or online contacting of a specific individual' as required 
by 15 U.S.C. 6501(8)(F)''); NetChoice, at 3 (``Persistent 
identifiers, like cookies, only identify devices--not a person'').
    \111\ See, e.g., ICLE, at 7-12. These commenters also included 
content creators on YouTube. See, e.g., Skyship Entertainment; J. 
Johnston (J House Vlogs); H. and S. Jho (Sockeye Media LLC). See 
also CARU, at 1 (noting that ``[t]he addition of `persistent 
identifier' to the definition of `Personal Information' has resulted 
in improved privacy protections for children but has had negative 
consequences for industry, specifically the lack of robust and 
creative child-directed content''); IAB, at 4 (noting that this 
modification may have had the unintended effect of reducing the 
availability of children's online content).
    \112\ CCIA, at 3.
    \113\ Id.
---------------------------------------------------------------------------

    In contrast, other commenters expressed strong support for the 2013 
persistent identifier modification. For example, while acknowledging 
that it took time for the digital advertising industry to adapt to the 
new definition, one commenter described the 2013 modification as 
``wholly positive.'' \114\ The commenter also noted that the change 
recognized that unique technical identifiers might be just as personal 
as traditional identifiers such as name or address when used to 
contact, track, or profile users.\115\ The commenter stated that this 
change ``laid the groundwork for many countries adopting this expanded 
definition of personal information in their updated privacy laws.'' 
\116\
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    \114\ SuperAwesome, at 18.
    \115\ Id. See also Princeton University Center for Information 
Technology Policy (``Princeton University''), at 4 (``In the most 
recent COPPA Rule revision, the FTC recognized that `persistent 
identifiers' are a form of `personal information,' because they 
enable singling out a specific user through their device for 
contact. This makes sense; we see no basis in computer science for 
treating persistent identifiers any differently from other means of 
directing communications, such as telephone numbers or email 
addresses. While the technical details differ, the use of the 
information is the same'').
    \116\ SuperAwesome, at 18. This commenter also recommended that 
the Commission expand the ``personal information'' definition's non-
exhaustive list of persistent identifiers to include ``device ID, 
[a]dvertising ID or similar'' IDs and a ``user agent or other device 
information which, when combined, can be used to create a unique 
fingerprint of the device.'' SuperAwesome, at 17. Because the Rule 
provides examples of persistent identifiers rather than an 
exhaustive list, the Commission does not find it necessary to 
include these elements within the definition.
---------------------------------------------------------------------------

    After reviewing the comments relevant to this issue, the Commission 
has decided to retain the 2013 modification including stand-alone 
persistent identifiers as ``personal information.'' The Commission is 
not persuaded by the argument that persistent identifiers must be 
associated with other individually identifiable information to permit 
the physical or online contacting of a specific individual. The 
Commission specifically addressed, and rejected, this argument during 
its discussion of the 2013 Amendments. There, the Commission rejected 
the claim that persistent identifiers only permit contact with a 
device. Instead, the Commission pointed to the reality that at any 
given moment a specific individual is using that device, noting that 
this reality underlies the very premise behind behavioral 
advertising.\117\ The Commission also reasoned that while multiple 
people in a single home often use the same phone number, home address, 
and email address, Congress nevertheless defined these identifiers as 
``individually identifiable information'' in the COPPA statute.\118\ 
The adoption of similar approaches in other legal regimes enacted since 
the 2013 Amendments further supports the Commission's position.\119\
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    \117\ 78 FR 3972 at 3980.
    \118\ Id. (citing 15 U.S.C. 6501(8)).
    \119\ See The European Union's General Data Protection 
Regulation (``GDPR''), which defines ``personal data'' as ``any 
information relating to an identified or identifiable natural person 
. . . [A]n identifiable natural person is one who can be identified, 
directly or indirectly, in particular by reference to an identifier 
such as . . . an online identifier.'' GDPR, Article 4, available at 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02016R0679-20160504&qid=1532348683434. Recital 30 of 
the GDPR notes that ``natural persons may be associated with online 
identifiers provided by their devices, applications, tools and 
protocols, such as [I]nternet [P]rotocol addresses, cookie 
identifiers or other identifiers such as radio frequency 
identification tags.'' Recital 30, available at https://eur-lex.europa.eu/eli/reg/2016/679. The California Privacy Rights Act 
similarly defines ``personal information'' as ``information that 
identifies, relates to, describes, is reasonably capable of being 
associated with, or could reasonably be linked, directly or 
indirectly, with a particular consumer or household,'' and includes 
identifiers such as online identifiers. Section 3, Title 1.81.5 of 
the CCPA, added to Part 4 of Division 3 of the California Civil Code 
Sec.  1798.140(v). This approach is also consistent with the FTC's 
own precedent. See Protecting Consumer Privacy in an Era of Rapid 
Change, Federal Trade Commission (March 2012), available at https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-report-protecting-consumer-privacy-era-rapid-change-recommendations/120326bprivacybreport.pdf; FTC Staff Report: Self-
Regulatory Principles For Online Behavioral Advertising (February 
2009), available at https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-staff-report-self-regulatory-principles-online-behavioral-advertising/p085400behavadreport.pdf.
---------------------------------------------------------------------------

    Nor does the Commission find compelling the argument that the 2013 
persistent identifier modification has caused harm by hindering the 
ability of operators to monetize online content through targeted 
advertising. One of the stated goals of including persistent 
identifiers within the definition of ``personal information'' was to 
prevent the collection of personal information from children for 
behavioral advertising without parental consent.\120\ After reviewing 
the comments, the Commission has determined that the privacy benefits 
of such an approach outweigh the potential harm, including the 
purported harm created by requiring operators to provide notice and 
seek verifiable parental consent in order to contact children through 
targeted advertising.\121\
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    \120\ 78 FR 3972 at 3979-3981.
    \121\ The Commission received comments from content creators who 
indicated that the 2013 Amendments resulted in the loss of the 
ability to monetize content through targeted advertising. See 
Skyship Entertainment; J. Johnston (J House Vlogs); H. and S. Jho 
(Sockeye Media LLC). As discussed in Part IV.A.2.c., the 2013 
Amendments permit monetization through other avenues, such as 
contextual advertising, or through providing notice and seeking 
parental consent for the use of personal information for targeted 
advertising.
---------------------------------------------------------------------------

    Moreover, it bears noting, as the Commission did in 2013, that the 
expansion of the personal information definition was coupled with a 
newly created exception that allows operators to collect persistent 
identifiers from children to provide support for the internal 
operations of the website or online service without providing notice or 
obtaining parental consent. One of these purposes is serving contextual 
advertising, which provides operators another avenue for monetizing 
online content. The Commission continues to believe that it struck the 
proper balance in 2013 when it expanded the personal information 
definition while also creating a new exception to the Rule's 
requirements.
3. School and School-Authorized Education Purpose
    As discussed in Part IV.C.3.a., the Commission proposes codifying 
current guidance on ed tech \122\ by adding an

[[Page 2044]]

exception for parental consent in certain, limited situations in which 
a school authorizes an operator to collect personal information from a 
child. The Commission also proposes adding definitions for ``school'' 
and ``school-authorized education purpose,'' terms that are 
incorporated into the functioning of the proposed exception and 
necessary to cabin its scope. Part IV.C.3.a. provides further 
discussion about these definitions.
---------------------------------------------------------------------------

    \122\ Policy Statement of the Federal Trade Commission on 
Education Technology and the Children's Online Privacy Protection 
Act, Federal Trade Commission (May 19, 2022), available at https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-education-technology-childrens-online-privacy-protection;ComplyingwithCOPPA:FrequentlyAskedQuestions (``COPPA 
FAQs''), FAQ Section N, available at https://www.ftc.gov/business-guidance/resources/complying-coppa-frequently-asked-questions.
---------------------------------------------------------------------------

4. Support for the Internal Operations of the Website or Online Service
    As discussed in Part IV.A.2.c., the 2013 Amendments expanded the 
definition of ``personal information'' to include stand-alone 
persistent identifiers ``that can be used to recognize a user over time 
and across different websites or online services.'' \123\ The 2013 
Amendments balanced this expansion by creating an exception to the 
Rule's notice and consent requirements for operators that collect a 
persistent identifier for the ``sole purpose of providing support for 
the internal operations of the website or online service.'' \124\ The 
Rule defines ``support for the internal operations of the website or 
online service'' to include a number of specified activities and 
provides that the information collected to perform those activities 
cannot be used or disclosed ``to contact a specific individual, 
including through behavioral advertising, to amass a profile on a 
specific individual, or for any other purpose.'' \125\
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    \123\ 16 CFR 312.2, definition of ``personal information,'' 
paragraph 7.
    \124\ 16 CFR 312.5(c)(7).
    \125\ 16 CFR 312.2, definition of ``support for the internal 
operations of the website or online service.'' The definition 
includes activities such as those necessary to maintain or analyze 
the functioning of a site or service; personalize content; serve 
contextual advertising or cap the frequency of advertising; and 
protect the security or integrity of the user, site, or service.
---------------------------------------------------------------------------

    A variety of commenters recommended modifying the definition of 
``support for the internal operations of the website or online 
service.'' Multiple consumer and privacy advocates, academics, and one 
advertising platform called for the Commission to define ``support for 
the internal operations'' narrowly and thereby restrict the exception's 
use.\126\ For example, a coalition of consumer groups argued that the 
current definition is overly broad, too vague, and allows operators to 
avoid or minimize their COPPA obligations.\127\ These commenters cited 
the lack of clarity between data collection for permissible content 
personalization versus collection for impermissible behavioral 
advertising.\128\ To prevent operators from applying the exception too 
broadly, the coalition recommended a number of modifications to the 
definition, including limiting ``personalization'' to user-driven 
actions and to exclude methods designed to maximize user 
engagement.\129\
---------------------------------------------------------------------------

    \126\ Joint Consumer Groups, at 48-52; S. Egelman, at 5-6 
(stating that, from a technical standpoint, persistent identifiers 
are not needed to carry out the activities listed in the support for 
the internal operations of the website or online service 
definition); Princeton University, at 5-7 (expressing reservations 
about the scope of the internal operations exception); SuperAwesome, 
at 5-7 and 19-20 (noting that the industry-standard persistent 
identifiers are not needed for most internal operations and that the 
support for the internal operations exception should be 
significantly narrowed, if not eliminated).
    \127\ Joint Consumer Groups, at 48-52.
    \128\ Id. at 48-49.
    \129\ Id. at 50-52.
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    Several commenters specifically recommended that the Commission 
exclude the practice of ``ad attribution''--which allows the advertiser 
to associate a consumer's action with a particular ad--from the support 
for the internal operations definition.\130\ A group of State Attorneys 
General argued that ad attribution is unrelated to the activities 
enumerated in the definition and that the practice ``necessarily 
involves `recogniz[ing] a user over time and across different 
[websites] or online services.' '' \131\ Another commenter argued that 
companies should not be able to track children across online services 
to determine which ads are effective because the harm to privacy 
outweighs the practice's negligible benefit.\132\
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    \130\ Joint Attorneys General, at 8; Joint Consumer Groups, at 
51-52; Consumer Reports, at 14-15.
    \131\ Joint Attorneys General, at 8.
    \132\ Consumer Reports, at 14-15 (noting that it is unclear 
whether companies are following COPPA's existing restraints on 
operators' use of the support for the internal operations 
exception).
---------------------------------------------------------------------------

    In contrast, many industry commenters recommended that the 
Commission expand the list of activities that fall under the support 
for the internal operations definition. With respect to ad attribution, 
these commenters generally cited the practical need of websites and 
online services that monetize through advertising to evaluate the 
effectiveness of ad campaigns or to measure conversion in order to 
calculate compensation for advertising partners.\133\ Some commenters 
characterized the practice as common and expected, and they argued that 
reducing the ability to monetize would result in the development of 
fewer apps and online experiences for children.\134\
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    \133\ ESA, at 17-18; CARU, at 5; The Toy Association, at 14-15; 
NCTA, at 10. See also Committee for Justice, at 4.
    \134\ See, e.g., kidSAFE, at 6.
---------------------------------------------------------------------------

    Several commenters stated that ad attribution already falls within 
the definition but supported a Rule modification to make this 
clear.\135\ One argued that the definition's prohibition on the 
collection of persistent identifiers for behavioral advertising 
``serves as a safeguard to assure that [attribution] is appropriately 
limited.'' \136\
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    \135\ See, e.g., The Toy Association, at 14-15; NCTA, at 10; 
ESA, at 18; CARU, at 5. See also PRIVO, at 8 (noting that ``the 
Commission should make clear whether attribution and remarketing can 
be claimed to be support for internal operations'').
    \136\ The Toy Association, at 15.
---------------------------------------------------------------------------

    Commenters also recommended that a number of other practices should 
fall within the definition of ``support for the internal operations of 
the website or online service.'' These include additional ad measuring 
techniques,\137\ different types of personalization activities,\138\ 
product improvement,\139\ and fraud detection.\140\
---------------------------------------------------------------------------

    \137\ See, e.g., ANA, at 11 (recommending including click/
conversion tracking, ad modeling, and A/B testing, practices that 
provide operators with information about the value of their ads, 
reduce the need for behavioral targeted ads, and allow operators to 
determine the most ``user-friendly'' version of a site); Google, at 
17 (recommending adding conversion tracking and ad modeling, which 
allow measuring the relevance and appropriateness of ads); IAB, at 3 
(recommending including conversion tracking and advertising modeling 
because they ``are fundamental activities that improve the customer 
and business experience without creating additional privacy risks to 
children''); internet Association, at 6-7 (recommending including 
click/conversion tracking and ad modeling support because they 
``support child-centered content creation and, in each case, can be 
undertaken without focusing on a specific child's behavior over time 
for targeting purposes'').
    \138\ See, e.g., NCTA, at 9-10 (recommending including user-
driven and user-engagement personalization to allow, for example, 
``activities to tailor users' experiences based on their prior 
interactions with a site or service (whether derived from predictive 
analytics, real-time behaviors, or both)''); Viacom, at 3 
(requesting the Commission clarify that the definition includes 
``enhanced personalization techniques based on operator-driven 
first-party metrics and inferences about user interaction''); CCIA, 
at 5-6 (recommending including personalization to a user, such as 
``the recommendation of content based on prior activity on the 
website or online service'').
    \139\ See, e.g., ANA, at 11; kidSAFE, at 7; Khan Academy, at 2-3 
(noting that it is important to preserve the operator's ability to 
use data for educational research, product development, and to 
analyze the functioning of a product).
    \140\ See, e.g., SIIA, at 5 (recommending amending (1)(v) of the 
definition to ``[p]rotect the security or integrity of the user, 
[website], or online service of the operator or its service 
providers''). See also kidSAFE, at 7 (recommending expanding the 
definition to include customer or technical support, market research 
and user surveys, demographic analysis, ``or any other function that 
helps operate internal features and activities offered by a site or 
app'').

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[[Page 2045]]

    By expanding the definition of ``personal information'' to include 
stand-alone persistent identifiers, while at the same time creating an 
exception that allowed operators to collect such identifiers without 
providing notice and obtaining consent for a set of prescribed internal 
operations, the Commission struck an important balance between privacy 
and practicality in the 2013 Amendments.\141\ After careful 
consideration of the comments that addressed the Rule's support for the 
internal operations definition, the Commission does not believe that 
significant modifications to either narrow or expand the definition are 
necessary.
---------------------------------------------------------------------------

    \141\ See 78 FR 3972 at 3980 (noting that ``the Commission 
recognizes that persistent identifiers are also used for a host of 
functions that have little or nothing to do with contacting a 
specific individual, and that these uses are fundamental to the 
smooth functioning of the internet, the quality of the site or 
service, and the individual user's experience'').
---------------------------------------------------------------------------

    With respect to ad attribution, which generated significant 
commentary, the Commission believes the practice currently falls within 
the support for the internal operations definition. When it amended the 
definition in 2013, the Commission declined to enumerate certain 
categories of uses, including payment and delivery functions, 
optimization, and statistical reporting, in the Rule, stating that the 
definitional language sufficiently covered such functions as activities 
necessary to `` `maintain or analyze' the functions'' of the website or 
service.\142\ The Commission believes that ad attribution, where a 
persistent identifier is used to determine whether a particular 
advertisement led a user to take a particular action, falls within 
various categories, such as the concept of ``payment and delivery 
functions'' and ``optimization and statistical reporting.'' When used 
as a tool against click fraud, ad attribution also falls within the 
category of ``protecting against fraud or theft,'' an activity that 
served as a basis for the Commission's creation of the support for the 
internal operations exception.\143\ That said, as the definition makes 
clear, the Commission would not treat ad attribution as support for the 
internal operations of the website or online service if the information 
collected to perform the activity is used or disclosed ``to contact a 
specific individual, including through behavioral advertising, to amass 
a profile on a specific individual, or for any other purpose.'' \144\
---------------------------------------------------------------------------

    \142\ Id. at 3981.
    \143\ 76 FR 59804 at 59812; 77 FR 46643 at 46647-46648.
    \144\ 16 CFR 312.2, definition of ``support for the internal 
operations of the website or online service,'' paragraph 2. This 
restriction applies to each of the activities enumerated in the 
definition.
---------------------------------------------------------------------------

    The definition's use restriction is an important safeguard to help 
ensure that operators do not misuse the exception that allows them to 
collect a persistent identifier in order to provide support for the 
internal operations without providing notice and obtaining 
consent.\145\ The Commission appreciates the concerns expressed by some 
commenters that there is a lack of clarity in how operators implement 
the support for the internal operations exception and that certain 
operators may not comply with the use restriction. To increase 
transparency and to help ensure that operators follow the use 
restriction, the Commission proposes modifying the online notice 
requirements in Sec.  312.4(d) to require any operator using the 
support for the internal operations exception to specifically identify 
the practices for which the operator has collected a persistent 
identifier and the means the operator uses to comply with the 
definition's use restriction.\146\
---------------------------------------------------------------------------

    \145\ 16 CFR 312.5(c)(7).
    \146\ See Part IV.B.3. for further discussion of these proposed 
changes.
---------------------------------------------------------------------------

    With respect to the other proposed additions, the Commission does 
not believe additional enumerated activities are necessary. Other 
proposed additions--such as personalization, product improvement, and 
fraud prevention--are already covered.\147\ As the Commission noted in 
developing the 2013 Amendments, the Commission is cognizant that future 
technical innovation may result in additional activities that websites 
or online services find necessary to support their internal 
operations.\148\ Therefore, the Commission reminds interested parties 
that they may utilize the process permitted under Sec.  312.12(b) of 
the Rule, which allows parties to request Commission approval of 
additional activities to be included within the support for the 
internal operations definition based on a detailed justification and an 
analysis of the activities' potential effects on children's online 
privacy.
---------------------------------------------------------------------------

    \147\ See, e.g., 77 FR 46643 at 46647 (noting that ``[b]y 
carving out exceptions for support for internal operations, the 
Commission stated it intended to exempt from COPPA's coverage the 
collection and use of identifiers for authenticating users, 
improving site navigation, maintaining user preferences, serving 
contextual advertisements, protecting against fraud or theft, or 
otherwise personalizing, improving upon, or securing a [website] or 
online service'').
    \148\ 78 FR 3972 at 3981.
---------------------------------------------------------------------------

    Although the Commission does not find it necessary to modify the 
definition's enumerated activities, it does propose modifications to 
the definition's use restriction. Currently, the use restriction 
applies to each of the seven enumerated activities in the definition, 
and it states that information collected for those enumerated 
activities may not be used or disclosed to contact a specific 
individual, including through behavioral advertising, to amass a 
profile on a specific individual, or for any other purpose.\149\ 
However, certain of these activities likely necessarily require an 
operator to contact an individual, for example in order to ``[f]ulfill 
a request of a child as permitted by Sec. Sec.  312.5(c)(3) and (4).'' 
\150\ Therefore, the Commission proposes clarifying language to 
indicate that the information collected for these enumerated activities 
may be used or disclosed to carry out the activities permitted under 
the support for the internal operations exception.
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    \149\ 16 CFR 312.2, definition of ``support for the internal 
operations of the website or online service,'' paragraph 2.
    \150\ 16 CFR 312.2, definition of ``support for the internal 
operations of the website or online service,'' paragraph (1)(vii). 
For example, Sec.  312.5(c)(3) allows an operator to ``respond 
directly on a one-time basis to a specific request from the child.'' 
The Commission notes that the exceptions set forth in Sec. Sec.  
312.5(c)(3) and (4) are limited to responding to a child's specific 
request. Such a response would not include contacting an individual 
for another purpose, including through behavioral advertising, 
amassing a profile on a specific individual, or for any other 
purpose.
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    In addition, the Commission proposes expanding its non-exhaustive 
list of use restrictions. The Commission agrees with commenters who 
argued that the support for the internal operations exception should 
not be used to allow operators to maximize children's engagement 
without verifiable parental consent. Therefore, the Commission proposes 
prohibiting operators that use this exception from using or disclosing 
personal information in connection with processes, including machine 
learning processes, that encourage or prompt use of a website or online 
service. This proposed addition prohibits operators from using or 
disclosing persistent identifiers to optimize user attention or 
maximize user engagement with the website or online service, including 
by sending notifications to prompt the child to engage with the site or 
service, without verifiable parental consent.
    The Commission welcomes comment on whether there are other 
engagement

[[Page 2046]]

techniques the Rule should address. The Commission also welcomes 
comment on whether and how the Rule should differentiate between 
techniques used solely to promote a child's engagement with the website 
or online service and those techniques that provide other functions, 
such as to personalize the child's experience on the website or online 
service.
5. Website or Online Service Directed to Children
    The Commission proposes a number of changes to the definition of 
``website or online service directed to children.'' Overall, the 
Commission does not intend these proposed changes to alter the 
definition substantively; rather, the changes will provide additional 
insight into and clarity regarding how the Commission currently 
interprets and applies the definition.
a. Multi-Factor Test
    The first paragraph of the definition sets forth a list of factors 
the Commission will consider in determining whether a particular 
website or online service is child-directed. The Commission received a 
significant number of comments regarding the Rule's multi-factor test. 
Several industry commenters encouraged the FTC to continue relying on a 
multi-factor test to determine whether a site or service is directed to 
children, balancing both context (e.g., intent to target children, 
promoted to children, and empirical evidence of audience) and content 
(e.g., subject matter, animation, and child-oriented activities) 
factors.\151\ These commenters discouraged the FTC from relying on a 
single factor taken alone, arguing that a multi-factor evaluation 
allows flexibility and takes into account that some factors may be more 
or less indicative than others.\152\
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    \151\ See, e.g., Google, at 15 (``By equally balancing both 
content and context factors in applying the multi-factor test, 
operators--including creators, developers and platforms--are less 
likely to be over- or under-inclusive in making determinations about 
child-directed services, particularly when decisions are being made 
at the margins. We are concerned that pulling out a single factor as 
a litmus test for child-directedness can lead to bad outcomes, 
resulting in the application of COPPA obligations to general 
audience content where it doesn't make sense to apply the same 
protections we'd apply to children's services''); internet 
Association, at 9 (``The Commission should continue to consider 
these factors holistically, with no single factor taking precedence 
over others. Reliance on a comprehensive multi-factor test that 
includes audience composition as one of many factors balances both 
content and context inputs and provides the flexibility needed to 
apply the Rule in the context of new technology and evolving 
platforms such as interactive media'').
    \152\ See, e.g., internet Association, at 9; CIPL, at 3-4; 
Google, at 15-16; Pok[eacute]mon Company International, Inc. 
(``Pok[eacute]mon''), at 1-2; ESA, at 3-8. See also TechFreedom, at 
19 (``The FTC should reinforce its prior decision to apply a 
`totality of circumstances' test in determining whether content is 
child-directed'').
---------------------------------------------------------------------------

    At the same time, commenters also recommended that the Commission 
reevaluate the test's existing factors, claiming that some are outdated 
and no longer seem indicative of child-directed websites or online 
services. For example, several industry members noted that content 
styles such as animation are not necessarily determinative of whether a 
service is child-directed.\153\ In addition, several industry members 
recommended that the FTC consider giving more weight to particular 
factors when determining whether a website or online service is 
directed to children or that it create a sliding scale for existing 
factors to provide more guidance for operators.\154\ For example, a 
number of commenters recommended that the Commission weigh more heavily 
operators' intended audience as opposed to empirical evidence of 
audience composition.\155\
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    \153\ See, e.g., ANA, at 8 (noting that animated content is 
often adult-oriented rather than child-oriented); Pok[eacute]mon, at 
2 (noting that popular adult animated content such as ``Family Guy'' 
or ``South Park'' illustrates that the use of animation is no longer 
a clear indicator that the use of animated characters is targeted to 
children); ESA, at 6 (asserting that the use of animated characters 
should not be given weight in video game and similar media contexts 
because video games are computer-generated media and therefore 
inherently utilize animated characters).
    \154\ See, e.g., Pok[eacute]mon, at 2 (suggesting ``weighting'' 
the factors); TRUSTe, LLC (``TRUSTe''), at 2 (noting that, while not 
dispositive, audience composition and target market factors will 
have a higher likelihood of determining that the service is child-
directed); SuperAwesome, at 11 (suggesting the establishment of a 
roadmap for the Rule's scope to evolve from ``content-based'' to 
``user-based'' factors, noting that ``[t]oday, the best (and highly 
imperfect) method for determining whether a user is a child is by 
categori[z]ing the content being accessed, e.g. is it child-directed 
or not. In the near future, new technologies will make it possible 
to identify whether a user is a child on any website or app, and 
without collecting more personal information to verify age'').
    \155\ See, e.g., ANA, at 8; J. Johnston (J House Vlogs), at 14; 
The Toy Association, at 10. See also generally Screen Actors Guild-
American Federation of Television and Radio Artists (``SAG-AFTRA''), 
at 4-5 (asserting that, when applying the COPPA Rule to content 
creators who distribute their content on general audience platforms, 
the Commission should consider the content creators' knowledge and 
intent).
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    Several FTC-approved COPPA Safe Harbor programs suggested adding 
new factors to the Rule to help guide operators, including by adding an 
operator's self-categorization to third parties. One such program, for 
example, recommended considering marketing materials directed to third-
party partners or advertisers, claiming that such materials can provide 
insights on the operator's target and users.\156\ Another supported 
consideration of ``whether an operator self-categorizes its website or 
online service as child-directed on third[-]party platforms.'' \157\ A 
third FTC-approved COPPA Safe Harbor program recommended requiring 
operators to periodically analyze the demographics of their audience or 
users and to consider consumer inquiries and complaints.\158\
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    \156\ TRUSTe, at 1-2.
    \157\ kidSAFE, at 7 (also recommending the addition of ``video 
content'' to the existing factor of ``music or other audio 
content'').
    \158\ CARU, at 6-7 (suggesting that such factors would be 
particularly relevant to sites or services that were not originally 
directed to children, but where the audience has reached a threshold 
level such that COPPA protections should apply).
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    Some commenters cautioned against relying on an operator's internal 
rating system or a third party's rating system as a factor.\159\ One 
such commenter argued that relying on operators' internal rating 
systems would potentially punish those that engage in good faith, 
responsible review activities and might violate section 230 of the 
Communications Decency Act.\160\ The commenter also argued that a third 
party's ratings do not constitute competent and empirical evidence 
regarding audience composition or evidence regarding the intended 
audience, and further argued that relying on such ratings increases an 
operator's risk of unexpected liability, particularly if the rating 
system may have been developed for a purpose unrelated to the COPPA 
Rule's factors.\161\
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    \159\ See, e.g., ANA, at 8; ESRB, at 7.
    \160\ ANA, at 8 (stating that ``Section 230 of the 
Communications Decency Act explicitly states that no provider of an 
interactive computer service shall be held liable for `any action 
voluntarily taken in good faith to restrict access to or 
availability of material that the provider or user considers to be 
obscene, lewd, lascivious, filthy, excessively violent, harassing, 
or otherwise objectionable.' As such, considering content moderation 
actions taken by companies to oversee content on their platforms as 
a basis for liability may be impermissible pursuant to the 
Communications Decency Act'').
    \161\ ANA, at 8-9.
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    The Commission continues to believe that the Rule's multi-factor 
test, which applies a ``totality of the circumstances'' standard, is 
the most practical and effective means for determining whether a 
website or online service is directed to children. The determination of 
whether a given site or service is child-directed is necessarily fact-
based and requires flexibility as individual factors may be more or 
less relevant depending on the context. Moreover, a requirement that 
the Commission, in all cases, weigh more heavily certain factors could 
unduly hamper the Commission's law enforcement efforts. For example, it 
is

[[Page 2047]]

not hard to envision operators circumventing the Rule by claiming an 
``intended'' adult audience despite the attributes and overall look and 
feel of the site or service appearing to be directed to children.\162\ 
Additionally, a rigid approach that prioritizes specific factors is 
unlikely to be nimble enough to address a site or service that changes 
its characteristics over time.
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    \162\ Indeed, the Commission has previously acknowledged that a 
website or online service with the attributes, look, and feel of a 
property targeted to children would be deemed directed to children 
even if an operator claims that was not the intent. 78 FR 3972 at 
3983.
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    The Commission does not propose eliminating any of the existing 
factors or modifying how it applies the multi-factor test.\163\ 
However, the Commission proposes modifications to clarify the evidence 
the Commission will consider regarding audience composition and 
intended audience.
---------------------------------------------------------------------------

    \163\ With respect to animation as a factor, the Commission 
recognizes that a variety of adult content uses animated characters. 
By the same token, animation can be an important characteristic of 
child-directed sites and services. Accordingly, as with the other 
enumerated factors, animation continues to be one of several 
potentially relevant considerations the Commission will take into 
account in determining whether a specific site or service is 
directed to children.
---------------------------------------------------------------------------

    Specifically, the Commission proposes adding a non-exhaustive list 
of examples of evidence the Commission will consider in analyzing 
audience composition and intended audience. The Commission agrees with 
those commenters that argued that an operator's marketing materials and 
own representations about the nature of its site or service are 
relevant. Such materials and representations can provide insight into 
the operator's understanding of its intended or actual audience and are 
thus relevant to the Commission's analysis. Additionally, the 
Commission believes that other factors can help elucidate the intended 
or actual audience of a site or service, including user or third-party 
reviews and the age of users on similar websites or services. 
Therefore, the Commission proposes adding ``marketing or promotional 
materials or plans, representations to consumers or to third parties, 
reviews by users or third parties, and the age of users on similar 
websites or services'' as examples of evidence the Commission will 
consider. Because many of these examples can provide evidence as to 
both audience composition and intended audience, the Commission also 
proposes a technical fix to remove the comma between ``competent and 
reliable empirical evidence regarding audience composition'' and 
``evidence regarding the intended audience.''
b. Operators Collecting Personal Information From Other Websites and 
Online Services Directed to Children
    The second paragraph of the definition of ``website or online 
service directed to children'' states ``[a] website or online service 
shall be deemed directed to children when it has actual knowledge that 
it is collecting personal information directly from users of another 
website or online service directed to children.'' \164\ The Commission 
added this language in 2013, along with parallel changes to the 
definition of ``operator,'' in order ``to allocate and clarify the 
responsibilities under COPPA'' of third parties that collect 
information from users of child-directed sites and services.\165\ The 
changes clarified that the child-directed content provider is strictly 
liable when a third party collects personal information through its 
site or service, while the third party is liable only if it had actual 
knowledge that the site or service from which it was collecting 
personal information was child-directed.\166\
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    \164\ 16 CFR 312.2, definition of ``website or online service 
directed to children,'' paragraph 2.
    \165\ 78 FR 3972 at 3975. The 2013 Amendments added a proviso to 
the definition of ``operator'' discussing the circumstances under 
which personal information is collected or maintained on behalf of 
an operator. See 16 CFR 312.2, definition of ``operator.''
    \166\ The Commission stated that ``for purposes of the [COPPA] 
statute'' the third party ``has effectively adopted that child-
directed content as its own and that portion of its service may 
appropriately be deemed to be directed to children.'' 78 FR 3972 at 
3978.
---------------------------------------------------------------------------

    Because the second paragraph of this definition specifies that the 
operator must have actual knowledge that it is collecting personal 
information ``directly'' from users of another site or service, the 
Commission is concerned that entities with actual knowledge that they 
receive large amounts of children's data from another site or service 
that is directed to children, without collecting it directly from the 
users of such site or service, may avoid COPPA's requirements. For 
example, the online advertising ecosystem involves ad exchanges that 
receive data from an ad network that has collected information from 
users of a child-directed site or service. In the same spirit of 
avoiding a loophole that led the Commission to amend the Rule in 2013, 
the Commission proposes modifying the current language by deleting the 
word ``directly.'' The Commission did not seek comment in the 2019 Rule 
Review Initiation on this aspect of the Rule's definition of ``website 
or online service directed to children'' and therefore welcomes comment 
on this proposed modification.
c. Mixed Audience
    The 2013 Amendments established a distinction between child-
directed sites and services that target children as a ``primary 
audience'' and those for which children are one of multiple audiences--
so called ``mixed audience'' sites or services. Specifically, the Rule 
provides that a website or online service that meets the multi-factor 
test for being child-directed ``but that does not target children as 
its primary audience, shall not be deemed directed to children'' so 
long as the operator first collects age information and then prevents 
the collection, use, or disclosure of information from users who 
identify as younger than 13 before providing notice and obtaining 
verifiable parental consent.\167\ This allows operators of mixed 
audience sites or services to use an age-screen and apply COPPA 
protections only to those users who are under 13.
---------------------------------------------------------------------------

    \167\ 16 CFR 312.2, definition of ``website or online service 
directed to children,'' paragraph 3.
---------------------------------------------------------------------------

    Although there appears to be general support for the mixed audience 
classification, a number of commenters cited confusion regarding its 
application and called on the Commission to provide additional clarity 
on where to draw the line between general audience, primarily child-
directed, and mixed audience categories of sites and services.\168\ One 
commenter noted that the mixed audience definition is confusing and the 
language ``shall not be deemed directed to children''

[[Page 2048]]

suggests that such sites or services are not within the definition of 
child-directed websites or online services.\169\ Others recommended the 
Commission use a specific threshold for making the determination or 
provide additional guidance based on the Rule's multi-factor test.\170\
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    \168\ See, e.g., ANA, at 9 (``Although the ability to age screen 
users has helped businesses ascertain those users to which COPPA 
applies, children could benefit from the FTC providing additional 
guidance on the threshold for determining whether a website or 
online service is primarily directed to children''); Google, at 13 
(``We support the retention of the mixed audience category, which 
appropriately recognizes that it is reasonable to treat age screened 
users as adults when the underlying child-directed content is also 
directed to adult audiences . . . At the same time, we believe that 
the definition of mixed audience as currently drafted requires 
significant clarification, especially with respect to its 
distinction from primarily child-directed and general audience 
content''); Lego, at 7 (``[F]urther clarity on how content for mixed 
audience and adults could be interpreted by regulatory and self-
regulatory authorities would increase our ability to provide clearer 
direction internally on content development''); The Toy Association, 
at 9 (suggesting the Commission amend the Rule ``to establish that a 
mixed audience site or service, including apps or platforms, is one 
that offers content directed to children, but whose target audience 
likely includes a significant number of tweens, teens or adults'') 
(bold typeface omitted); Internet Association, at 7 (``While it can 
be fairly straightforward to identify sites and services that are 
directed primarily to children, the concept of mixed audience sites 
is not clearly defined and the implications of this concept are 
unclear and unpredictable'').
    \169\ kidSAFE, at 7-8 (``How can a site or service be `directed 
to children' for purposes of the factors' test, yet not be `deemed 
directed to children' for purposes of compliance?'').
    \170\ See, e.g., The Toy Association, at 9 (``[The Toy 
Association] suggests that the FTC consider revising the Rule to 
establish that a mixed audience site or service, including apps or 
platforms, is one that offers content directed to children, but 
whose target audience likely includes a significant number of 
tweens, teens or adults, even if segments other than children do not 
comprise 50% or more of the audience'') (bold typeface omitted); 
CIPL, at 3-4 (``In its application of the COPPA Rule, the Commission 
has increasingly blurred the lines between services that are 
`primarily directed to children,' services that target children as 
one but not the primary audience (`mixed audience'), and general 
audience sites that don't target children as an audience. The FTC 
should issue guidance based upon the multi-factor test in COPPA to 
ensure that content creators, app developers and platforms 
understand how the rules apply to their products and services''); 
SIIA, at 4 (``As the way people consume content online continues to 
evolve, additional guidance is needed on the line between child-
directed and mixed audience services''); ESRB, at 6-7 (recommending 
the Commission provide clarity on the ``directed to children'' 
analysis through rulemaking or guidance); and J. Johnston (J House 
Vlogs), at 16 (requesting an ``[e]mergency [e]nforcement [s]tatement 
from the FTC providing . . . [c]larity on the lines between child-
directed, mixed-audience, and general audience content'').
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    Commenters also questioned the effectiveness of age screening, with 
some arguing that children have been conditioned to lie about their age 
in order to circumvent age gates.\171\ Others expressed support for the 
current approach,\172\ and some warned against specifying proscriptive 
methods for age screening, as it could prevent companies from 
innovating new methods.\173\
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    \171\ See, e.g., SuperAwesome, at 21; PRIVO, at 7-8; Joint 
Attorneys General, at 9; CARU, at 8.
    \172\ See, e.g., CCIA, at 7-8; U.S. Chamber of Commerce, at 4-5; 
ANA, at 9; Internet Association, at 9.
    \173\ See, e.g., CCIA, at 8; ANA, at 9.
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    Through the 2013 Amendments, the Commission intended mixed audience 
sites and services to be a subset of the ``child-directed'' category of 
websites or online services to which COPPA applies. A website or online 
service falls under the mixed audience designation if it: (1) meets the 
Rule's multi-factor test for being child-directed; and (2) does not 
target children as its primary audience. Unlike other child-directed 
sites and services, mixed audience sites and services may collect age 
information and need only apply COPPA's protections to those users who 
identify as under 13. An operator falling under this mixed audience 
designation may not collect personal information from any visitor until 
it collects age information from the visitor. To the extent the visitor 
identifies themselves as under age 13, the operator must provide notice 
and obtain verifiable parental consent before collecting, using, and 
disclosing personal information from the visitor.\174\
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    \174\ 16 CFR 312.2, definition of ``website or online service 
directed to children,'' paragraph 3.
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    To make its position clearer, the Commission proposes adding to the 
Rule a separate, stand-alone definition for ``mixed audience website or 
online service.'' This definition provides that a mixed audience site 
or service is one that meets the criteria of the Rule's multi-factor 
test but does not target children as the primary audience.\175\
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    \175\ Current staff guidance notes that operators should 
carefully analyze the intended audience, actual audience, and, in 
many instances, the likely audience for the website or online 
service in determining whether children are the primary audience or 
not. COPPA FAQs, FAQ D.5.
---------------------------------------------------------------------------

    The proposed definition also provides additional clarity on the 
means by which an operator of a mixed audience site or service can 
determine whether a user is a child. First, the Commission agrees with 
the comments that recommend it allow operators flexibility in 
determining whether a user is a child. To that end, the proposed 
definition allows operators to collect age information or use ``another 
means that is reasonably calculated, in light of available technology, 
to determine whether the visitor is a child,'' reflecting a standard 
used elsewhere in the Rule.\176\ Although currently collecting age 
information may be the most practical means for determining that a user 
is a child, the proposed definition allows operators to innovate and 
develop additional mechanisms that do not rely on a user's self-
declaration.\177\
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    \176\ Compare proposed definition of ``mixed audience website or 
online service'' (as quoted in the text accompanying this footnote) 
with 16 CFR 312.5(b)(1) (``Any method to obtain verifiable parental 
consent must be reasonably calculated, in light of available 
technology, to ensure that the person providing consent is the 
child's parent.'').
    \177\ Indeed, the Commission supports the development of other 
means and mechanisms to determine whether the user is a child. Other 
jurisdictions, such as the United Kingdom, have conducted research 
that indicates that mechanisms other than self-declaration may be a 
more effective means of age assurance. Specifically, the research 
states that parents found the self-declaration method ``easy to 
circumvent,'' with many parents ``open about themselves and their 
children lying about their ages.'' Families' attitudes towards age 
assurance, Research commissioned by the United Kingdom's Information 
Commissioner's Office and Ofcom (Oct. 11, 2022), at 19, available at 
https://www.gov.uk/government/publications/families-attitudes-towards-age-assurance-research-commissioned-by-the-ico-and-ofcom.
---------------------------------------------------------------------------

    Additionally, consistent with long-standing staff guidance,\178\ 
the proposed mixed audience definition specifically requires that the 
means used for determining whether a visitor is a child ``be done in a 
neutral manner that does not default to a set age or encourage visitors 
to falsify age information.'' This, for instance, would prevent 
operators from suggesting to users that certain features will not be 
available for users who identify as younger than 13.
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    \178\ COPPA FAQs, FAQ D.7.
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    To further clarify the obligations of an operator of a mixed 
audience site or service, the Commission also proposes amending 
paragraph (3) of the definition of ``website or online service directed 
to children'' by stating that such operators shall not be deemed 
directed to children with regard to any visitor not identified as under 
13.

B. Notice (16 CFR 312.4)

    The Commission proposes a number of modifications to the Rule's 
direct notice and online notice provisions.
1. Direct Notice to the Parent (Paragraph (b))
    Section 312.4(b) requires operators to make reasonable efforts to 
ensure that parents receive direct notice of an operator's practices 
with respect to the collection, use, or disclosure of children's 
information. The Commission proposes adding references to ``school'' in 
Sec.  312.4(b) to cover the situation in which an operator relies on 
authorization from a school to collect information from a child and 
provides the direct notice to the school rather than to the child's 
parent. As discussed in Part IV.C.3.a., the Commission is proposing to 
add an exception to the Rule's parental consent requirement where an 
operator, in limited contexts, obtains authorization from a school to 
collect a child's personal information. For purposes of authorization, 
``school'' includes individual schools as well as local educational 
agencies and State educational agencies, as those terms are defined 
under Federal law.\179\
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    \179\ See Part IV.C.3.a. for further discussion on the proposed 
school authorization exception. This proposed definition is intended 
to preserve the ability of local and State educational agencies to 
contract on behalf of multiple schools and school districts. This 
definition aligns with current staff guidance providing that ``[a]s 
a best practice, we recommend that schools or school districts 
decide whether a particular site's or service's information 
practices are appropriate, rather than delegating that decision to 
the teacher.'' COPPA FAQs, FAQ N.3.
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    Just as notice is necessary for a parent to provide informed and 
meaningful consent, a school must also obtain information about an 
operator's data

[[Page 2049]]

collection and use practices before authorizing collection. Therefore, 
as part of the proposed school authorization exception, an operator 
must make reasonable efforts to ensure that the school receives the 
notice that the operator would otherwise provide to a child's parent.
2. Content of the Direct Notice (Paragraph (c))
    Section 312.4(c) details the content of the direct notice required 
where an operator avails itself of one of the Rule's exceptions to 
prior parental consent set forth in Sec.  312.5(c)(1)-(8). The 
Commission proposes several modifications to Sec.  312.4(c). The first 
is to delete the reference to ``parent'' in the Sec.  312.4(c) heading. 
This modification is to accommodate the proposed new Sec.  312.4(c)(5), 
which specifies the content of the direct notice where an operator 
relies on school authorization to collect personal information.
    Next, the Commission proposes modifying language in Sec.  
312.4(c)(1) and a number of its paragraphs. As currently drafted, this 
section sets forth the required content of direct notice when an 
operator collects personal information in order to initiate parental 
consent under the parental consent exception listed in Sec.  
312.5(c)(1). The Commission proposes revising the heading of Sec.  
312.4(c)(1) by adding the phrase ``for purposes of obtaining consent, 
including . . .'' after ``[c]ontent of the direct notice to the 
parent'' and before ``under Sec.  312.5(c)(1).'' This change would 
clarify that this direct notice requirement applies to all instances in 
which the operator provides direct notice to a parent for the purposes 
of obtaining consent, including under Sec.  312.5(c)(1).
    In its current form, Sec.  312.4(c)(1) presumes that an operator 
has collected a parent's online contact information and, potentially, 
the name of the child or parent. However, operators are free to use 
other means to initiate parental consent, including those that do not 
require collecting online contact information. For example, an operator 
could use an in-app pop-up message that directs the child to hand a 
device to the parent and then instructs a parent to call a toll-free 
number. The modification is intended to clarify that even where the 
operator does not collect personal information to initiate consent 
under Sec.  312.5(c)(1), it still must provide the relevant aspects of 
the Sec.  312.4(c)(1) direct notice to the parent.
    Because the Commission's proposed changes to Sec.  312.4(c)(1) 
would expand the scope of when an operator must provide this direct 
notice, the Commission proposes modifications to indicate that 
Sec. Sec.  312.4(c)(1)(i) and newly-numbered 312.4(c)(1)(vii) may not 
be applicable in all instances.\180\ Additionally, because Sec. Sec.  
312.4(c)(1)(i) and newly-numbered 312.4(c)(1)(vii) apply to scenarios 
in which an operator is obtaining parental consent under the parental 
consent exception provided in Sec.  312.5(c)(1), the Commission 
proposes making minor modifications to those sections to align language 
with that exception. Specifically, that exception permits operators to 
collect a child's name or online contact information prior to obtaining 
parental consent, and the proposed notice would require the operator to 
indicate when it has collected a child's name or online contact 
information.
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    \180\ As discussed in Part IV.B.2., the Commission proposes 
expanding Sec.  312.4(c)(1) to include instances in which operators 
collect information other than online contact information to obtain 
consent. The modifications to Sec. Sec.  312.4(c)(1)(i) and newly-
numbered 312.4(c)(1)(vii) address those instances in which an 
operator may not have collected a parent's or child's online contact 
information to obtain consent.
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    The Commission also proposes adding a new paragraph (iv) to require 
that operators sharing personal information with third parties identify 
the third parties as well as the purposes for such sharing, should the 
parent provide consent. This new paragraph (iv) will also require the 
operator to state that the parent can consent to the collection and use 
of the child's information without consenting to the disclosure of such 
information, except where such disclosure is integral to the nature of 
the website or online service.\181\ For example, such disclosure could 
be integral if the website or online service is an online messaging 
forum through which children necessarily have to disclose their 
personal information, such as online contact information, to other 
users on that forum. The Commission believes that this information will 
enhance parents' ability to make an informed decision about whether to 
consent to the collection of their child's personal information. In 
order to minimize the burden on operators, and to maintain the goal of 
providing parents with a clear and concise direct notice, the proposed 
modification allows operators to disclose the categories of third 
parties with which the operator shares data rather than identifying 
each individual entity. The Commission welcomes further comment on 
whether information regarding the identities or categories of third 
parties with which an operator shares information is most appropriately 
placed in the direct notice to parents required under Sec.  312.4(c) or 
in the online notice required under Sec.  312.4(d).
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    \181\ This proposed modification effectuates current 
requirements under the Rule, namely Sec.  312.5(a)(2), which states 
that ``[a]n operator must give the parent the option to consent to 
the collection and use of the child's personal information without 
consenting to disclosure of his or her personal information to third 
parties.''
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    Additionally, the Commission proposes a number of clarifying 
changes. First, the Commission proposes clarifying that the information 
at issue in the first clause of Sec.  312.4(c)(1)(ii) is ``personal 
information.'' \182\ Second, in Sec.  312.4(c)(1)(iii), the Commission 
proposes clarifying that the direct notice must include how the 
operator intends to use the personal information collected from the 
child. For example, to the extent an operator uses personal information 
collected from a child to encourage or prompt use of the operator's 
website or online service such as through a push notification, such use 
must be explicitly stated in the direct notice. Additionally, the 
Commission further proposes to change the current use of ``or'' to 
``and'' to indicate that the operator must provide all information 
listed in Sec.  312.4(c)(1)(iii). Lastly, the Commission also proposes 
removing the term ``additional'' from Sec.  312.4(c)(1)(iii) because 
this paragraph no longer applies solely to instances in which the 
operator collects the parent's or child's name or online contact 
information.
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    \182\ This clause currently uses the term ``such information.'' 
16 CFR 312.4(c)(1)(ii).
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    In addition to the proposed modifications to Sec.  312.4(c)(1), the 
Commission proposes adding Sec.  312.4(c)(5) to identify the content of 
the direct notice an operator must provide when seeking to obtain 
school authorization to collect personal information.\183\ While 
tailored to the school context, the requirements in this new provision 
generally track the proposed modifications to Sec.  312.4(c)(1).\184\
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    \183\ The Commission is aware that ed tech operators may enter 
into standard contracts with schools, school districts, and other 
education organizations across the country. This direct notice 
requirement is not meant to interfere with such contractual 
arrangements. Operators may employ various methods to meet the 
proposed direct notice requirement without interfering with the 
standard contract, such as by appending the direct notice to the 
contract. See Part IV.C.3.a. for further discussion of the direct 
notice required under this exception.
    \184\ For instance, proposed Sec.  312.4(c)(5)(iii) requires the 
operator to provide the information collected from the child, how 
the operator intends to use such information, and the potential 
opportunities for disclosure. Similarly, to the extent the operator 
discloses information to third parties, proposed Sec.  
312.4(c)(5)(iv) requires the operator to provide the identities or 
specific categories of such third parties and the purposes for such 
disclosures.

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[[Page 2050]]

3. Notice on the Website or Online Service (Paragraph (d))
    The Commission proposes two additions to the Rule's online notice 
requirement. These additions pertain to an operator's use of the 
exception for prior parental consent set forth in Sec.  312.5(c)(7) and 
the proposed exception set forth in new proposed Sec.  
312.5(c)(9).\185\ The Commission also proposes certain modifications to 
the Rule's existing online notice requirements.
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    \185\ Given that these proposed disclosures may be longer and 
somewhat technical in nature, the Commission believes their 
appropriate location is in the operator's online notice rather than 
the direct notice.
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    First, the Commission proposes adding a new paragraph, Sec.  
312.4(d)(3), which would require operators that collect a persistent 
identifier under the support for the internal operations exception in 
Sec.  312.5(c)(7) to specify the particular internal operation(s) for 
which the operator has collected the persistent identifier and describe 
the means it uses to ensure that it does not use or disclose the 
persistent identifier to contact a specific individual, including 
through behavioral advertising, to amass a profile on a specific 
individual, in connection with processes that encourage or prompt use 
of a website or online service, or for any other purpose, except as 
permitted by the support for the internal operations exception.\186\
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    \186\ The Commission also proposes requiring operators to 
implement a data retention policy as part of the requirements for 
Sec.  312.10. See Part IV.G. for a discussion of this proposed 
change.
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    Currently, an operator that collects a persistent identifier 
pursuant to Sec.  312.5(c)(7) is not required to provide notice of the 
collection. The Commission finds merit in the concerns expressed by 
some commenters about a lack of transparency in how operators implement 
the support for the internal operations exception and the extent to 
which they comply with the exception's restrictions.\187\ The 
Commission believes that the proposed disclosure requirements will 
provide additional clarity into the use of Sec.  312.5(c)(7), will 
enhance operator accountability, and will function as an important tool 
for monitoring COPPA compliance.
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    \187\ See Part IV.A.4. for a discussion of these concerns.
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    Second, as discussed in Part IV.C.3.b., the Commission proposes a 
new parental consent exception, codifying its law enforcement policy 
statement regarding the collection of audio files.\188\ Consistent with 
this codification, the Commission also proposes a new Sec.  312.4(d)(4) 
requiring that an operator that collects audio files pursuant to the 
new Sec.  312.5(c)(9) exception describe how the operator uses the 
audio files and to represent that it deletes such files immediately 
after responding to the request for which the files were collected.
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    \188\ See Part IV.C.3.b.
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    The Commission also proposes a number of other modifications to the 
Rule's online notice requirements. Specifically, the Commission 
proposes modifying Sec.  312.4(d)(2) to require additional information 
regarding operators' disclosure practices and operators' retention 
policies.\189\ As discussed earlier, the Commission believes that this 
information will enhance parents' ability to make an informed decision 
about whether to consent to the collection of their child's personal 
information. The Commission notes that the COPPA Rule's online notice 
provision requires that operators describe how they use personal 
information collected from children.\190\ For example, to the extent an 
operator uses personal information collected from a child to encourage 
or prompt use of the operator's website or online service such as 
through a push notification, such use must be explicitly stated in the 
online notice. The Commission also proposes adding ``if applicable'' to 
current Sec.  312.4(d)(3) (which would be redesignated as Sec.  
312.4(d)(5)) in order to acknowledge that there may be situations in 
which a parent cannot review or delete the child's personal 
information.\191\
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    \189\ The Commission proposes requiring operators to implement a 
data retention policy as part of the requirements for Sec.  312.10. 
See Part IV.G. for a discussion of this proposed change.
    \190\ 16 CFR 312.4(d)(2).
    \191\ As discussed in Part IV.D., operators utilizing the school 
authorization exception would not be required to provide parents the 
rights afforded under Sec.  312.6(a) for information collected under 
that exception.
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    Lastly, the Commission proposes to delete the reference to 
``parent'' in the Sec.  312.4(d) introductory text. This proposal is to 
align with the Commission's new proposed direct notice requirement to 
accommodate the proposed new school authorization exception found in 
Sec.  312.5(c)(10).
4. Additional Notice on the Website or Online Service Where an Operator 
Has Collected Personal Information Under Sec.  312.5(c)(10) (New 
Paragraph Sec.  312.4(e))
    The Commission also proposes adding a separate online notice 
provision applicable to operators that obtain school authorization to 
collect personal information from children pursuant to the proposed 
exception set forth in Sec.  312.5(c)(10). These disclosures are in 
addition to the requirements of Sec.  312.4(d). The Commission believes 
these proposed disclosures will convey important information to parents 
regarding the limitations on an operator's use and disclosure of 
personal information collected under the school authorization 
exception, and the school's ability to review that information and 
request the deletion of such information.\192\
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    \192\ The school's ability to review information and request the 
deletion of such information are addressed in Part IV.D. in 
connection with the proposed modification to Sec.  312.6.
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C. Parental Consent (16 CFR 312.5)

    The verifiable parental consent requirement, in combination with 
the notice provisions, is a fundamental component of the COPPA Rule's 
ability to protect children's privacy. The Rule requires operators to 
obtain verifiable parental consent before they collect, use, or 
disclose a child's personal information.\193\ Operators must make 
``reasonable efforts to obtain verifiable parental consent'' and any 
parental consent method ``must be reasonably calculated, in light of 
available technology, to ensure that the person providing consent is 
the child's parent.'' \194\ Although the Rule sets forth a non-
exhaustive list of methods that the Commission has recognized as 
meeting this standard, the Commission encourages operators to develop 
their own consent mechanisms provided they meet the ``reasonably 
calculated standard'' required by Sec.  312.5(b)(1). In addition to the 
enumerated consent mechanisms listed in Sec.  312.5(b)(2), Sec.  
312.5(c) provides several exceptions pursuant to which an operator may 
collect limited personal information without first obtaining parental 
consent and, in some cases, without providing notice.
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    \193\ Operators must also obtain such consent for ``any material 
change in the collection, use, or disclosure practices to which the 
parent has previously consented.'' 16 CFR 312.5(a)(1).
    \194\ 16 CFR 312.5(b)(1).
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    The Commission requested comment in its 2019 Rule Review Initiation 
on the efficacy of the Rule's consent requirements, including whether 
the Commission should add to the list of approved methods and whether 
there are ways to encourage the development of new consent methods. The 
Commission also requested comment on whether the Commission should 
consider additional exceptions to the consent requirement, including 
with respect to the collection of audio files

[[Page 2051]]

containing a child's voice and in the educational context where a 
school authorizes the operator to collect personal information.
    The Commission proposes modifying the Rule's consent requirements 
in a number of ways. First, the Commission proposes requiring the 
operator to obtain separate verifiable parental consent before 
disclosing personal information collected from a child. The Commission 
also proposes modifying the consent method set forth in Sec.  
312.5(b)(2)(ii) and incorporating into the Rule two previously approved 
consent mechanisms submitted through the Sec.  312.12(a) voluntary 
process. Lastly, the Commission proposes modifying the parental consent 
exceptions set forth in Sec.  312.5(c)(4), (6), and (7) and adding 
exceptions for where an operator relies on school authorization and for 
the collection of audio files that contain a child's voice.
1. General Requirements (Paragraph (a))
    Section 312.5(a)(1) provides that an operator must obtain 
verifiable parental consent before collecting, using, or disclosing 
personal information from a child. While the Commission does not 
propose modifications to this paragraph, it seeks to make a 
clarification. This requirement applies to any feature on a website or 
online service through which an operator collects personal information 
from a child. For example, if an operator institutes a feature that 
prompts or enables a child to communicate with a chatbot or other 
similar computer program that simulates conversation, the operator must 
obtain verifiable parental consent before collecting any personal 
information from a child through that feature. While the Commission is 
not proposing modifications to this paragraph, it welcomes comment on 
it.
    Section 312.5(a)(2) currently states that ``[a]n operator must give 
the parent the option to consent to the collection and use of the 
child's information without consenting to disclosure of his or her 
personal information to third parties.'' The Commission proposes 
bolstering this requirement by adding that operators must obtain 
separate verifiable parental consent for disclosures of a child's 
personal information, unless such disclosures are integral to the 
nature of the website or online service.\195\ Under the proposed 
language, operators required to obtain separate verifiable parental 
consent for disclosures may not condition access to the website or 
online service on such consent.
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    \195\ This exception aligns with previous staff guidance, in 
which FTC staff has stated that operators are not required to 
provide parents with a separate option to consent to the disclosure 
of the child's personal information where such disclosures are 
integral to the site or service. The guidance requires the operators 
to make clear when such disclosures are integral. See COPPA FAQs, 
FAQ A.1. For example, such disclosure could be integral if the 
website or online service is an online messaging forum through which 
children necessarily have to disclose their personal information, 
such as online contact information, to other users on that forum.
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    In the preamble of the 1999 initial COPPA Rule, the Commission 
noted that ``disclosures to third parties are among the most sensitive 
and potentially risky uses of children's personal information. This is 
especially true in light of the fact that children lose even the 
protections of [COPPA] once their information is disclosed to third 
parties.'' \196\ The Commission remains concerned about the disclosure 
of personal information collected from children. Indeed, one commenter 
noted that ``[c]hildren today face surveillance unlike any other 
generation--their every movement online and off can be tracked by 
potentially dozens of different companies and organizations.'' \197\
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    \196\ 64 FR 59888 at 59899.
    \197\ Common Sense Media, at 3.
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    The Commission believes that information sharing is a pervasive 
practice. Therefore, the Commission finds it appropriate to provide 
parents with greater control over the disclosure of their children's 
information by clarifying that Sec.  312.5(a)(2) requires operators to 
obtain separate verifiable parental consent for disclosures. This 
includes disclosure of persistent identifiers for targeted advertising 
purposes, as well as disclosure of other personal information for 
marketing or other purposes. The Commission did not seek comment on 
this particular aspect of the Rule's verifiable parental consent 
requirements in the 2019 Rule Review Initiation and welcomes comment on 
this proposed modification.
2. Methods for Verifiable Parental Consent (Paragraph (b))
    The Commission received numerous comments related to the methods by 
which operators can obtain parental consent. Many commenters criticized 
particular approved parental consent methods. Some characterized the 
methods as outdated or counterintuitive.\198\ Others complained that 
the methods failed to serve unbanked or low-income families who may 
lack access to the means to provide consent, such as a credit 
card.\199\ Some commenters suggested that the use of credit card data 
and government-issued IDs are too privacy-invasive,\200\ while one 
advocate claimed that the current methods are better indicators of 
adulthood than parenthood.\201\
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    \198\ See, e.g., FOSI, at 4-5 (describing current method of 
requiring submission by facsimile as outdated, staffing a toll-free 
number as expensive, and requiring a credit card number for a 
service that should be free as counter-intuitive); ESA, at 24 (``For 
example, the collection of a driver's license or credit card in 
connection with a transaction may appear particularly cumbersome in 
the context of a free mobile app that does not require registration 
and that collects and uses only limited types of information within 
the app'').
    \199\ See, e.g., internet Association, at 13; CIPL, at 5; Net 
Safety Collaborative, at 2; Connected Camps, at 2.
    \200\ See, e.g., P. Aftab, at 12-13; see also ESRB, at 8 (noting 
that parents may be disinclined to provide credit card information 
unless the operator is a name the parents know and trust).
    \201\ P. Aftab, at 13.
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    Commenters also expressed concern that the current methods include 
too much friction, resulting in significant drop-off during the consent 
process. Commenters noted that this friction discourages operators from 
creating services that target children or creates an incentive to limit 
their collection of personal information to avoid triggering 
COPPA.\202\ Consistent with this view, the Network Advertising 
Initiative stated that ``[r]ecognizing that verifiable parental consent 
mechanisms are challenging and expensive to implement, and result in 
considerable drop-off, the practical reality is that most ad-tech 
companies simply seek to avoid advertising to children altogether.'' 
\203\ Other commenters warned that cumbersome consent methods can drive 
children to general audience sites, which may have fewer digital safety 
and privacy protections in place.\204\
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    \202\ See, e.g., ESRB, at 8; CIPL, at 4-5; Internet Association, 
at 13; Connected Camps, at 2-3.
    \203\ See NAI, at 2; see also Attorney General of Arizona, at 2 
(noting that ``. . . the cost of obtaining verifiable parental 
consent can be unduly burdensome on small businesses, and the 
consent process can be frustrating for both businesses and parents 
alike'').
    \204\ See, e.g., Lego, at 4-5; Net Safety Collaborative, at 2.
---------------------------------------------------------------------------

    Some commenters suggested modifying existing consent methods or 
adding new ones. For example, several recommended that the Commission 
eliminate the need for a monetary transaction when an operator obtains 
consent through a credit or debit card or an online payment system 
where the system provides notification of transactions that do not 
involve a charge.\205\ Some recommended

[[Page 2052]]

modifying the Rule to allow for the use of text messages to obtain 
consent. Those commenters noted that text messages are a common 
alternative to email for verification purposes and argued that text 
message-based consent is no weaker than consent initiated through the 
collection of an email address.\206\
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    \205\ See, e.g., ANA, at 12 (``. . . companies should be able to 
obtain verifiable parental consent by requesting a valid credit card 
from a parent even if the consent is not obtained in connection with 
a monetary transaction''); kidSAFE, at 10 (``The FTC should consider 
eliminating the need for a `monetary' transaction when consent is 
obtained using a credit card, debit card, or other online payment 
system that provides notification of each discreet [sic] 
transaction'').
    \206\ See ANA, at 12; The Toy Association, at 4; kidSAFE, at 11.
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    Other commenters called for the Commission to add to the list of 
approved consent methods. They recommended allowing the use of 
fingerprint or facial recognition technologies that already exist in 
parents' mobile devices,\207\ voice recognition technology currently 
used in the online banking context,\208\ and a variety of other 
technologies and tools.\209\
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    \207\ See ESRB, at 8.
    \208\ See Net Safety Collaborative, at 2.
    \209\ See, e.g., Net Choice, at 12 (recommending the use of a 
digital certificate that uses public key technology coupled with 
additional steps to demonstrate that consent is from the parent); 
Internet Association, at 14 (recommending that the Commission add a 
mechanism whereby parents log into a preexisting parental account); 
CTIA, at 2-3 (recommending obtaining consent through the set-up 
process for services, such as wearables, that collect personal 
information from children at parents' direction); Yoti, at 12 
(recommending the use of age estimation and age verification tools 
instead of parental consent).
---------------------------------------------------------------------------

    Several commenters recommended that the Commission encourage 
platforms to participate in the parental consent process.\210\ One 
suggested that platforms could provide notifications to the consenting 
parent about the intended collection, use, or disclosure of the child's 
personal information.\211\ Another suggested that parents would be more 
likely to engage with platforms than to provide consent on a service-
by-service basis.\212\
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    \210\ See, e.g., Princeton University, at 9 (noting that mobile 
operating systems offer linked parent and child accounts and could 
provide an interface for child accounts to submit consent permission 
requests to parent accounts).
    \211\ See ACT: The App Association, at 4-5.
    \212\ See ESRB, at 8.
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    Commenters also recommended different procedural steps the 
Commission could undertake. These include such things as the Commission 
using its authority to conduct studies on the costs and benefits of 
different consent methods,\213\ streamlining the Rule's current 120-day 
comment period on applications for new parental consent methods,\214\ 
and convening stakeholder meetings to explore effective solutions.\215\
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    \213\ See Pok[eacute]mon, at 3.
    \214\ See CCIA, at 10; SIIA, at 3-4.
    \215\ See Lego, at 5; The Toy Association, at 20; Yoti, at 13.
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    After reviewing these comments, the Commission continues to believe 
that the Rule's current approach to verifiable parental consent is 
appropriate and sound. With respect to the more general concerns that 
COPPA's consent methods create ``friction,'' the Commission stresses 
that COPPA requires a balance between facilitating consent mechanisms 
that are not prohibitively difficult for operators or parents, while 
also ensuring that it is a parent granting informed consent, rather 
than a child circumventing the process. In response to commenters 
indicating that this friction has discouraged operators from creating 
services or caused operators to change their practices, the Commission 
welcomes the development of methods that prove less cumbersome for 
operators while still meeting COPPA's statutory requirements.
    As to the more specific criticisms of the approved consent 
mechanisms set forth in the Rule, the Commission notes that operators 
are not obligated to use any of those methods.\216\ Rather, operators 
are free to develop and use any method that meets the standard 
contained in Sec.  312.5(b)(1) and to tailor their approach to their 
own individual situation.
---------------------------------------------------------------------------

    \216\ Indeed, the Commission is aware that many operators will 
choose not to utilize certain enumerated methods. However, the 
Commission retains these methods in the Rule in case any operator 
would like to use these methods.
---------------------------------------------------------------------------

    While it is possible that some of the suggested methods could meet 
the Sec.  312.5(b)(1) requirement, the Commission does not believe the 
comments contain sufficient detail or context for it to propose adding 
these additional consent methods at this time. The Commission welcomes 
further explanation detailing the necessity and practicality of any 
recommended new consent method, including how it would satisfy the 
Rule's requirements. This could come in the form of additional comments 
or through the voluntary approval process provided in Sec.  312.12(a) 
of the Rule.
    At the same time, the Commission agrees that platforms could play 
an important role in the consent process, and the Commission has long 
recognized the potential of a platform-based common consent 
mechanism.\217\ The Commission would also welcome further information 
on the role that platforms could play in facilitating the obtaining of 
parental consent. In particular, the Commission would be interested in 
any potential benefits platform-based consent mechanisms would create 
for operators and parents and what specific steps the Commission could 
take to encourage development of such mechanisms.
---------------------------------------------------------------------------

    \217\ 78 FR 3972 at 3989-90 (noting that platform-based common 
consent mechanism could simplify operators' and parents' abilities 
to protect children's privacy).
---------------------------------------------------------------------------

    The Commission also agrees with the recommendation that it modify 
the Rule to eliminate the monetary transaction requirement when an 
operator obtains consent through a parent's use of a credit card, debit 
card, or an online payment system. As one commenter noted, many of 
these payment mechanisms provide a means for the account holder to 
receive notification of every transaction, even those that cost no 
money, such as a free mobile app download.\218\ In addition, many 
operators offer their apps or other online services at no charge. 
Requiring such operators to charge the parent a fee when seeking 
consent undercuts their ability to offer the service at no cost. 
Further, the Commission understands that some consumers might be 
hesitant to complete consent processes when they will incur even a 
nominal monetary charge.
---------------------------------------------------------------------------

    \218\ kidSAFE, at 10.
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    In proposing this modification, the Commission notes that it had 
previously determined that a monetary transaction was necessary for 
this form of consent.\219\ At that time, the Commission reasoned that 
requiring a monetary transaction would increase the method's 
reliability because the parent would receive a record of the 
transaction. This would provide the parent notice of purported consent, 
which, if improperly given, the parent could then withdraw. Because 
Sec.  312.5(b)(2)(ii), as proposed to be modified, would still require 
notice of a discrete transaction, even where there is no monetary 
charge, the Commission believes this indicia of reliability is 
preserved. Where a payment system cannot provide notice absent a 
monetary charge, an operator will not be able to obtain consent through 
this method.
---------------------------------------------------------------------------

    \219\ See 76 FR 59804 at 59819; see also 78 FR 3972 at 3987.
---------------------------------------------------------------------------

    The Commission also agrees with the recommendation to modify the 
Rule to allow the use of text messages to obtain consent. As discussed 
in Part IV.A.1., the Commission believes this is achieved through its 
proposed modification to the ``online contact information'' 
definition.\220\ Therefore, the Commission does not propose

[[Page 2053]]

modifying Sec.  312.5(b)(2)(ii) to address this recommendation.
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    \220\ See Part IV.A.1.
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    In addition to the modification to Sec.  312.5(b)(2)(ii), the 
Commission also proposes adding two parental consent methods to Sec.  
312.5(b). These methods are knowledge-based authentication and the use 
of facial recognition technology. The Commission approved both methods 
pursuant to the Sec.  312.12(a) process created from the 2013 
Amendments.\221\
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    \221\ See Letter to Imperium, LLC (Dec. 23, 2013) (approval of 
knowledge-based authentication), available at https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-grants-approval-new-coppa-verifiable-parental-consent-method/131223imperiumcoppa-app.pdf; Letter to Jest8 Limited (Trading as Riyo) (Nov. 18, 2015) 
(approval of facial recognition technology), available at https://www.ftc.gov/system/files/documents/public_statements/881633/151119riyocoppaletter.pdf.
---------------------------------------------------------------------------

3. Exceptions to Prior Parental Consent (Paragraph (c))
    The Commission also received numerous comments regarding possible 
additional exceptions to the Rule's parental consent requirement. The 
majority of the commenters addressing this issue focused on whether the 
Commission should allow schools to authorize data collection, use, and 
disclosure in certain circumstances rather than requiring ed tech 
operators to obtain parental consent. A smaller number of commenters 
addressed whether the Commission should codify in the Rule its existing 
enforcement policy statement regarding the collection of audio files. 
In addition, several commenters recommended that the Commission expand 
the Rule's current one-time use exception.
    The Commission proposes creating exceptions for where an operator 
relies on school authorization and for the collection of audio files 
that contain a child's voice. The Commission also proposes a 
modification to Sec.  312.5(c)(7), which relates to the support for the 
internal operations exception, to align with proposed new 
requirements.\222\ Additionally, Commission proposes a modification to 
Sec.  312.5(c)(4) to exclude from this exception the use of push 
notifications to encourage or prompt use of a website or online 
service. Finally, the Commission proposes technical modifications to 
Sec.  312.5(c)(6). At this time, the Commission does not propose 
expanding the Rule's current one-time use exception.
---------------------------------------------------------------------------

    \222\ See Part IV.B.3. for discussion of the Commission's 
proposed notice requirement under 16 CFR 312.4(d)(3).
---------------------------------------------------------------------------

a. School Authorization Exception
    In response to the Commission's initial proposed COPPA Rule in 
1999, stakeholders expressed concern about how the Rule would apply to 
the use of websites and online services in schools. Some of these 
commenters claimed that requiring parental consent to collect students' 
information could interfere with classroom activities.\223\ In 
response, the Commission noted in the final Rule's preamble ``that the 
Rule does not preclude schools from acting as intermediaries between 
operators and parents in the notice and consent process, or from 
serving as the parents' agent in the process.'' \224\ It further 
stated, ``where an operator is authorized by a school to collect 
personal information from children, after providing notice to the 
school of the operator's collection, use, and disclosure practices, the 
operator can presume that the school's authorization is based on the 
school's having obtained the parent's consent.'' \225\ Since that time, 
Commission staff has provided additional guidance on this issue through 
its ``Complying with COPPA: Frequently Asked Questions'' document 
(``COPPA FAQs''), which specifies that an operator may rely on school 
consent when it collects a child's personal information provided the 
operator uses the information for an educational purpose and for ``no 
other commercial purpose.'' \226\ The Commission has since issued a 
policy statement on COPPA's application to ed tech providers, similarly 
noting that operators of ed tech that collect personal information 
pursuant to school authorization are prohibited from using such 
information for any commercial purpose, including marketing, 
advertising, or other commercial purposes unrelated to the provision of 
the school-requested online service.\227\
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    \223\ See 64 FR 59888 at 59903.
    \224\ Id.
    \225\ Id.
    \226\ COPPA FAQs, FAQ N.1.
    \227\ Policy Statement of the Federal Trade Commission on 
Education Technology and the Children's Online Privacy Protection 
Act, Federal Trade Commission (May 19, 2022), available at https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-education-technology-childrens-online-privacy-protection.
---------------------------------------------------------------------------

    In recent years there has been a significant expansion of ed tech 
used in both classrooms and in the home.\228\ This expansion, in the 
form of students' increased access to school-issued computers and 
online learning curricula, raised questions about ed tech providers' 
compliance with the Rule as well as calls for additional guidance on 
how COPPA applies in the school context. Stakeholders also questioned 
how COPPA obligations relate to those operators subject to FERPA, the 
federal law that protects the privacy of ``education records,'' and its 
implementing regulations.\229\
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    \228\ The closure of schools and in-person learning due to the 
global COVID-19 pandemic added to this expansion as students shifted 
to remote education.
    \229\ FERPA applies to all schools receiving funds from any 
applicable program of the Department of Education. 34 CFR 99.1. In 
general, unless an exception applies, parents (or students over 18 
years of age) must provide consent for the disclosure of personal 
information from an education record. 34 CFR 99.30. FERPA provides 
an exception to its parental consent requirement for ``school 
officials.'' 34 CFR 99.31. Under this exception, schools do not need 
to obtain consent to disclose personal information where there is a 
``legitimate educational interest.'' In addition, the school must 
maintain direct control over the information.
---------------------------------------------------------------------------

    In 2017, the FTC and the Department of Education hosted a workshop 
on student privacy and ed tech to explore these questions.\230\ Through 
the discussions at the workshop, the Commission gathered information 
that helped inform the questions posed in the 2019 Rule Review 
Initiation regarding the application of the COPPA Rule to the education 
context. The Commission asked whether it should modify the Rule to add 
an exception to the parental consent requirement where the school 
provides authorization and, if so, whether the exception should mirror 
the requirements of FERPA's ``school official exception.'' \231\ The 
Commission also asked for comment on various aspects of a school 
authorization exception, including how student data could be used, who 
at the school should be able to provide consent, and notice to 
parents.\232\
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    \230\ Student Privacy and Ed Tech (Dec. 1, 2017), available at 
https://www.ftc.gov/news-events/events/2017/12/student-privacy-ed-tech.
    \231\ The FERPA school official exception allows schools to 
outsource institutional services or functions that involve the 
disclosure of education records to contractors, consultants, 
volunteers, or other third parties, provided that the outside party: 
``(1) Performs an institutional service or function for which the 
agency or institution would otherwise use employees; (2) Is under 
the direct control of the agency or institution with respect to the 
use and maintenance of education records; (3) Is subject to the 
requirements in 34 CFR 99.33(a) that the personally identifiable 
information (PII) from education records may be used only for the 
purposes for which the disclosure was made, e.g., to promote school 
safety and the physical security of students, and governing the 
redisclosure of PII from education records; and (4) Meets the 
criteria specified in the school or local educational agency's 
(LEA's) annual notification of FERPA rights for being a school 
official with a legitimate educational interest in the education 
records.'' Who is a ``School Official'' Under FERPA?, Department of 
Education, available at https://studentprivacy.ed.gov/faq/who-%E2%80%9Cschool-official%E2%80%9D-under-ferpa.
    \232\ The Commission also asked for comment on deletion rights 
in the educational context. The issue of the deletion of information 
collected when a school has provided authorization is discussed in 
Part IV.D.

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[[Page 2054]]

i. Whether To Include a School Authorization Exception in the Rule
    Numerous commenters representing industry and schools, along with 
some consumer groups, expressed support for codifying a school 
authorization exception in the Rule so long as such exception is 
consistent with FERPA and its implementing regulations. That is, where 
there is a legitimate educational interest to collect the child's data, 
the school maintains direct control of the data, and the operator uses 
the data only as permitted by the school and complies with disclosure 
limits.\233\
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    \233\ See, e.g., CIPL, at 6; Net Safety Collaborative, at 3; 
Illinois Council of School Attorneys, at 1-2; Association of 
American Publishers, at 5; CCIA, at 11; internet Association, at 14-
17; SIIA, at 3; Joint comment of the Consortium for School 
Networking, Knowledge Alliance, National Association of State Boards 
of Education, and the State Educational Technology Directors 
Association (``CoSN''), at 2; National School Boards Association, at 
4-5; National Parent Teacher Association, at 2; Joint comment of the 
AASA, the School Superintendents Association, and the Association of 
Education Service Agencies, at 1-3; CDT, at 5; Khan Academy, at 2; 
Google, at 18; Future of Privacy Forum, at 10-12; Lego, at 5-6. Some 
commenters supported the Commission implementing a school 
authorization exception within the Rule but did not call for 
alignment with FERPA's school official exception. See, e.g., ANA, at 
13-14; Lightspeed, at 1-2; The Toy Association, at 5, 19-20; 
5Rights, at 6.
---------------------------------------------------------------------------

    In supporting such an exception, several of these commenters raised 
concerns that requiring schools to obtain consent from parents would be 
burdensome and costly for schools.\234\ These commenters claimed that 
the burden would include obtaining parental consent as well as 
providing curriculum to students whose parents did not consent to the 
use of the ed tech program.\235\
---------------------------------------------------------------------------

    \234\ See CDT, at 4 (noting that ``[s]ome schools do not have 
the resources or the time to ask for consent from parents every time 
they rely on an educational technology product''); CCIA, at 11 
(noting that ``[a]s Ed Tech becomes increasingly prevalent in the 
classroom, requiring parental consent for every online service used 
in the classroom would quickly become administratively and 
practically unwieldy for parents and schools alike, with the 
resulting consent fatigue decreasing the availability of beneficial 
technologies and services to all students''); Lightspeed, at 2 
(``Seeking explicit, written parental approval for every single use 
of technology by a student at present is impracticable. Requiring 
parents to affirmatively approve each student's use of every 
application would lead to an avalanche of paperwork for parents and 
school administrators, one that would push schools to shy away from 
utilizing EdTech solutions in the classroom''); National PTA, at 3 
(noting that ``[w]hen student data is collected in support of core 
curricular functions, National PTA believes that schools should be 
able to act as parents' agents and consent on parents' behalf. 
However, not all student data collection meets that standard. 
Schools use education technology for a broad range of 
extracurricular, non-essential or optional activities . . . We ask 
that the FTC clarify when schools may act on behalf of parents, 
differentiating between technology used in support of schools' 
essential academic and administrative needs and other, optional 
uses''); Net Safety, at 3 (urging the Commission to ensure that 
schools' burden and cost of obtaining parental consent under COPPA 
not be increased); Illinois Council of School Attorneys, at 2 
(noting that ``requiring school districts to obtain verifiable 
parental consent from all parents/guardians for potentially hundreds 
of education applications in use in a district would be an enormous 
and unworkable administrative burden, even for those districts that 
have more resources available to them'').
    \235\ See, e.g., National School Boards Association, at 3 (``If 
school districts are required to get actual parent consent, many 
districts would be unable to deliver the curriculum to students 
whose parents have not responded, creating inequities in addition to 
administrative burdens''); CIPL, at 5 (noting that ``[i]t could also 
result in administrative burden and classroom disruption for 
teachers to manage different lesson plans for students whose parents 
have provided consent and those whose parents have not'').
---------------------------------------------------------------------------

    Commenters also raised concerns about requiring ed tech providers 
to obtain verifiable parental consent from parents. For example, 
commenters expressed concern that requiring operators to obtain 
parental consent would require operators to collect additional personal 
information from parents, much of which is not necessary to provide the 
educational service, which contradicts data minimization 
principles.\236\ One commenter argued that requiring parents to consent 
would lead to ``consent fatigue,'' \237\ while another commenter 
explained that operators often do not have a direct touchpoint with 
parents that could facilitate the consent process.\238\
---------------------------------------------------------------------------

    \236\ See CIPL, at 5; ANA, at 14; CCIA, at 11.
    \237\ CCIA, at 11.
    \238\ ANA, at 13.
---------------------------------------------------------------------------

    The Illinois Council of School Attorneys argued that schools are 
often in a better position than parents to evaluate ed tech 
products.\239\ They also pointed to privacy protections in the FERPA 
school official exception including the requirement that the school 
maintain direct control of the data and the operator use the data for 
only limited, authorized purposes.\240\ Finally, in supporting a school 
authorization exception, some commenters stated that numerous operators 
have built up their consent process in reliance on the Commission's 
existing guidance indicating that COPPA permits schools to provide 
consent for educational purposes.\241\
---------------------------------------------------------------------------

    \239\ Illinois Council of School Attorneys, at 1.
    \240\ The organization also noted that schools consenting on 
behalf of parents is consistent with their in loco parentis role. 
Illinois Council of School Attorneys, at 1-2.
    \241\ See ANA, at 13; Association of American Publishers, at 3.
---------------------------------------------------------------------------

    However, not all commenters supported a school authorization 
exception, with several consumer groups, parent organizations, and 
government representatives raising various concerns.\242\ For example, 
a coalition of consumer groups argued that a COPPA exception aligned 
with FERPA would not adequately protect children because FERPA fails to 
provide a clear standard for when a party has a ``legitimate 
educational interest'' as required by the school official exception. 
The coalition also claimed that schools fail to adequately inform 
parents about the use of FERPA's school official exception and that 
most schools are ill-equipped to properly vet the privacy and security 
practices of ed tech services.\243\ Another advocacy organization cited 
statistics purportedly showing that schools do not comply with the 
school official exception.\244\
---------------------------------------------------------------------------

    \242\ See, e.g., EPIC, at 8-9 (asserting that ``[i]nstead of 
putting the burden on schools to obtain and provide consent on 
behalf of parents, which they are unauthorized to do under the Act, 
the burden should be shifted to operators, who are in a better 
position to do so given advancements in technology and greater 
availability of resources, to obtain verifiable parental consent''); 
Joint Consumer Groups, at 20-30; Unidos, at 6 (noting that ``cash-
strapped districts could be preyed upon by bad actors targeting 
these districts by offering free or low-cost programs to gain a 
foothold in schools and start collecting children's data. Many of 
these companies have opaque privacy policies. Inadequately funded 
school administrators and/or teachers will not likely have the 
resources to advocate for better protections or do a sufficient 
review to understand policies, especially in an environment where 
schools are using countless apps and programs''); Illinois Families 
for Public Schools, at 2 (noting that ``[p]arental consent is 
especially important in the case of extremely sensitive student data 
regarding children's behavior, biometrics, geolocation, 
disabilities, or health conditions. As such, we disagree firmly with 
the idea of amending COPPA rules to have a Family Educational Rights 
and Privacy Act (FERPA)-type exception for school officials to grant 
consent for the collection and use of a child's data in an 
educational setting in place of a parent. The school-official 
exception in FERPA has weakened its protections for disclosure of 
student data, and this should not be a precedent for modifying or 
weakening the COPPA Rule''); Joint Attorneys General, at 10-11; 
Parent Coalition for Student Privacy, at 8 (noting that ``[p]arents' 
existing rights under COPPA to be informed and provide prior consent 
to any program collecting data directly from their children under 
the age of 13 should not be erased or limited simply because their 
children's use of a commercial operator's service occurs inside the 
school building or at the direction of a teacher or school 
administrator''); Senator Markey, et al., at 2 (noting that this 
type of exception could be ``fundamentally inconsistent with the 
congressional intent behind COPPA'').
    \243\ See Joint Consumer Groups, at 25-29.
    \244\ See Surveillance Technology Oversight Project (``STOP''), 
at 3-4.
---------------------------------------------------------------------------

    A number of individual parents also opposed the exception. These 
individuals emphasized that parents should retain the ability afforded 
to them under COPPA to provide consent to collect, use, and share their 
children's data.\245\ One parent noted that over 400 ed tech providers 
had access to her

[[Page 2055]]

child's data, and that she is unable to understand what information was 
shared with each provider.\246\ These parents noted that school 
districts should not be able to provide consent to ed tech providers on 
their behalf,\247\ and further noted that including such an exception 
would weaken COPPA rather than strengthen it.\248\
---------------------------------------------------------------------------

    \245\ See, e.g., A. Segur, at 1; F. Bocquet, at 1; M. Murphy, at 
1; N. Williams, at 1.
    \246\ A. Segur, at 1.
    \247\ See A. Segur, at 1; F. Bocquet, at 1; M. Murphy, at 1; N. 
Williams, at 1.
    \248\ See, e.g., A. Segur, at 1; F. Bocquet, at 1; N. Williams, 
at 1.
---------------------------------------------------------------------------

    Another concern raised was that such an exception could ultimately 
swallow the Rule.\249\ For instance, in a joint comment of multiple 
State Attorneys General, the Attorneys General cited the incredible 
growth in ed tech and noted the technologies are not cabined to the 
classroom but are often encouraged to be used by students at home, and 
sometimes for non-educational purposes. The Attorneys General argued 
that, because the use of ed tech is often mandatory for students, an 
exception to COPPA's parental consent requirement would force parents 
to choose between education and their children's online privacy.\250\
---------------------------------------------------------------------------

    \249\ See Senator Markey, et al., at 2 (noting that such an 
exception ``risks opening the door to invasive tracking of children 
for advertising purposes''); Joint Attorneys General, at 10-11.
    \250\ Joint Attorneys General, at 10-11.
---------------------------------------------------------------------------

    While opposing a school authorization exception, the Parent 
Coalition for Student Privacy argued that if the Commission decides to 
create one, its applicability should be limited in scope. Specifically, 
the Coalition argued that schools should not be able to consent to the 
collection of particularly sensitive data, such as medical or 
geolocation information.\251\
---------------------------------------------------------------------------

    \251\ Parent Coalition for Student Privacy, at 11-12.
---------------------------------------------------------------------------

    After careful consideration of the comments, the Commission 
proposes codifying in the Rule its long-standing guidance that schools, 
State educational agencies, and local educational agencies may 
authorize the collection of personal information from students younger 
than 13 in very limited circumstances; specifically, where the data is 
used for a school-authorized education purpose and no other commercial 
purpose.\252\
---------------------------------------------------------------------------

    \252\ The definition for ``school-authorized education purpose'' 
is discussed in Part IV.A.3. See Part IV.B.1. for further discussion 
about the proposed inclusion of State and local educational agencies 
within the definition of ``school.''
---------------------------------------------------------------------------

    When a child goes to school, schools have the ability to act in 
loco parentis under certain circumstances. This is particularly the 
case when schools are selecting the means through which the schools and 
school districts can achieve their educational purposes, such as when 
deciding which educational technologies to use in their classrooms. The 
Commission finds compelling the concern that requiring parental consent 
in the educational context would impose an undue burden on ed tech 
providers and educators alike. As an initial matter, many ed tech 
providers have relied upon and structured their consent mechanisms 
based on the Commission's existing guidance. Requiring providers to 
reconfigure their systems to obtain parental consent directly from 
parents would undoubtedly create logistical problems that could 
increase costs and potentially dissuade some ed tech providers from 
offering their services to schools.\253\
---------------------------------------------------------------------------

    \253\ The Commission also agrees with commenters that noted that 
obtaining parental consent could require providers to collect 
additional personal information from parents that they would not 
collect if the school provides consent.
---------------------------------------------------------------------------

    The need for parental consent is also likely to interfere with 
educators' curriculum decisions. As a practical matter, obtaining 
consent from the parents of every student in a class often will be 
challenging, in many cases for reasons unrelated to privacy concerns. 
In situations where some number of parents in a class decline to 
consent to their children's use of ed tech, schools would face the 
prospect of foregoing particular services for the entire class or 
developing a separate mechanism for those students whose parents do not 
consent. Because the proposed school authorization exception restricts 
an operator's use of children's data to a school-authorized education 
purpose and precludes use for commercial purposes such as targeted 
advertising, it may ultimately be more privacy-protective than 
requiring ed tech providers to obtain consent from parents.
    Finally, the proposed school authorization exception requires that 
the ed tech provider and the school have in place a written agreement 
setting forth the exception's requirements.\254\ This includes 
identifying who from the school may provide consent and attesting that 
such individual has the authority to provide consent; the limitations 
on the use and disclosure of student data; the school's control over 
the use, disclosure, and maintenance of the data; and the operator's 
data retention policy. Accordingly, the proposed exception incorporates 
the privacy protections contained in the FERPA school official 
exception. This exception also builds on FERPA's protections by 
incorporating the Commission's existing prohibition on the use of 
student data for non-educational commercial purposes.
---------------------------------------------------------------------------

    \254\ As noted in Part IV.B.2., the Commission is aware that 
operators may enter into standard contracts to provide ed tech 
services. So long as the standard contract meets the elements 
required under proposed Sec.  312.5(c)(10), operators may continue 
to utilize such contracts.
---------------------------------------------------------------------------

ii. Permitted Use of Data Collected Through the School Authorization 
Exception
    Existing staff guidance indicates that, where the school authorizes 
data collection, an operator may only use children's data for an 
educational purpose and for no other commercial purpose.\255\ However, 
there has been confusion around the parameters of what constitutes an 
``educational purpose'' as opposed to a ``commercial purpose.'' \256\ 
Many of the commenters that support a school authorization exception to 
parental consent called on the Commission to clarify the permissible 
uses of data collected under such an exception.\257\ In an effort to 
seek further clarity, commenters suggested specific uses that the 
Commission should explicitly allow or exclude under the exception.\258\
---------------------------------------------------------------------------

    \255\ See COPPA FAQs, FAQ N.1; Policy Statement of the Federal 
Trade Commission on Education Technology and the Children's Online 
Privacy Protection Act, Federal Trade Commission (May 19, 2022), 
available at https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-education-technology-childrens-online-privacy-protection.
    \256\ Additionally, FERPA does not define what a ``legitimate 
educational interest'' is for purposes of the school official 
exception. Thus, even if the Commission aligned a COPPA school 
consent exception with FERPA, the scope of the exception would be 
unclear.
    \257\ See, e.g., CCIA, at 11-12; Joint comment of the AASA, the 
School Superintendents Association, and the Association of Education 
Service Agencies, at 3-4; Parent Coalition for Student Privacy, at 
4-5; Google, at 18.
    \258\ See, e.g., Joint comment of the AASA, the School 
Superintendents Association, and the Association of Education 
Service Agencies, at 4 (advocating for the inclusion of product 
research and development); Parent Coalition for Student Privacy, at 
3 (opposing the use of children's information to advertise, improve 
a service, or develop a new service); Google, at 18 (noting that a 
``commercial purpose'' under COPPA could be aligned with FERPA such 
that ``. . . certain types of processing are impermissible, such as 
personalized ads or product placements, but other important 
activities to support educational services are permitted, like the 
maintenance, development and improvement of the product, analytics, 
and personalization of content within the service'').
---------------------------------------------------------------------------

    Among these commenters, there was general agreement that the 
exception should not permit ed tech providers to use student data for 
marketing purposes, such as serving personalized advertisements.\259\ 
The comments

[[Page 2056]]

reflected less consensus on the question of whether to allow operators 
to engage in product improvement or development. Some commenters 
favored allowing product improvement or development under limited 
circumstances. For example, Lego recommended that the exception allow 
operators to use aggregated or anonymized data to improve existing 
products or develop new products that would benefit students.\260\ The 
5Rights Foundation similarly noted that, if the Commission were to 
allow operators to use student data to improve products, the student 
information must be ``de-identified and de-identifiable,'' cannot be 
shared with third parties, and must be limited to use for improving 
educational products only.\261\
---------------------------------------------------------------------------

    \259\ See, e.g., Princeton University, at 10; 5Rights 
Foundation, at 5 (``FTC could usefully clarify both the definition 
of `educational purposes' for which consent can be sought, and the 
scope of purposes that are proscribed (including, but not limited 
to, direct marketing, behavioural advertising, and any profiling not 
necessary to the functioning of the service in question)''); 
Consumer Reports, at 18 (noting that ``. . . operators seeking 
consent in the school setting should be prohibited from using the 
information for marketing''); internet Association, at 16 (``IA 
strongly supports appropriate limits on online service operators' 
use of students' personal information and does not believe that 
online services should be able to rely on school official consent in 
order to use personal information for marketing purposes''); STOP, 
at 5 (noting that the Rule `` . . . must also prohibit operators 
from using students' personal information for marketing or product-
improvement purposes''); Google, at 18 (recognizing the need to 
exclude commercial activities like advertising, including 
personalized ads and product placement).
    \260\ Lego, at 6.
    \261\ 5Rights Foundation, at 6. See also Khan Academy, at 3 
(noting the distinction between internal use of data for educational 
product development and disclosure of that data to third parties for 
commercial purposes); Yoti, at 14 (recommending allowing operators 
to use student data where the school has provided consent for 
research and development, broadly defined, so long as protections 
are in place); Oregon Attorney General, at 3 (if operators are 
allowed to use data for product improvement, Commission should 
consider ``whether operators are able to de-identify the personal 
information, and are able to prevent re-identification of the 
data'').
---------------------------------------------------------------------------

    In contrast, some commenters strongly opposed allowing product 
improvement absent verifiable parental consent. For example, EPIC 
argued that product improvement would allow ed tech vendors ``to create 
virtual laboratories in schools to study child behavior and further 
develop commercial products for profit, unbeknownst to parents.'' \262\ 
Others raised similar objections,\263\ including parents who stated 
that the Commission should prohibit the use of student data to improve 
or develop new products or services.\264\
---------------------------------------------------------------------------

    \262\ EPIC, at 11.
    \263\ See, e.g., Parent Coalition for Student Privacy, at 11 
(``The Commission should ban operators of education technology from 
using or processing de-identified or identifiable student 
information to improve existing or to develop or improve new 
educational or non-educational products and services''); Illinois 
Families for Public Schools, at 2 (opposing use of student data 
``for advertising purposes or to improve or develop new products or 
services'').
    \264\ See, e.g., F. Bocquet, at 1; N. Williams, at 1.
---------------------------------------------------------------------------

    In discussing the appropriate use of student data, several 
commenters suggested that the Commission adopt an approach similar to 
the treatment of activities that fall under the COPPA Rule's definition 
of ``support for the internal operations of the website or online 
service.'' This approach would allow ed tech providers to use student 
data for ``analytics, content personalization, and product development, 
maintenance, and improvement uses that benefit students and schools'' 
but not for activities such as personalized marketing.\265\
---------------------------------------------------------------------------

    \265\ See, e.g., CCIA, at 12. See also CIPL, at 3 (suggesting 
that companies be allowed to engage in profiling in the education 
context in order to provide ``'personalized'' curricula); School 
Superintendents, at 3 (recommending that FTC clarify that 
``commercial purposes'' for purposes of school consent exception 
does not include activities that would fall under the Rule's support 
for internal operations exception); Google, at 18 (``. . . certain 
types of processing are impermissible, such as personalized ads or 
product placements, but other important activities to support 
educational services are permitted, like the maintenance, 
development and improvement of the product, analytics, and 
personalization of content within the service'').
---------------------------------------------------------------------------

    The Commission believes that it should tailor the proposed school 
exception narrowly while ensuring its practicality for schools and 
operators. The Commission agrees with the commenters asserting that the 
use or disclosure of student data for marketing purposes should fall 
outside the school authorization exception. Indeed, this view is 
consistent with staff's guidance that schools can consent to the 
collection of student data for educational purposes but not for other 
commercial purposes, such as marketing and advertising.\266\
---------------------------------------------------------------------------

    \266\ See COPPA FAQs, FAQ N.1; Policy Statement of the Federal 
Trade Commission on Education Technology and the Children's Online 
Privacy Protection Act, Federal Trade Commission (May 19, 2022), 
available at https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-education-technology-childrens-online-privacy-protection.
---------------------------------------------------------------------------

    The Commission also agrees with those commenters recommending that 
the school authorization exception should allow operators to engage in 
limited product improvement and development, provided certain 
safeguards are in place. The Commission believes that allowing 
providers to make ongoing improvements to the educational services the 
school has authorized benefits students and educators, and that user 
data may be necessary to identify and remedy a problem or ``bug'' in a 
product or service. Therefore, in contrast to general marketing, 
product improvement and development can be viewed as part of providing 
an educational purpose rather than engaging in an unrelated commercial 
practice.
    That said, the Commission is mindful of the concerns that allowing 
such uses, particularly product development, could open the door to ed 
tech providers exploiting the exception. To address these concerns, the 
Commission proposes that the Rule's definition of a ``school-authorized 
education purpose'' include product improvement and development (as 
well as other uses related to the operation of the product, including 
maintaining, supporting, or diagnosing the service), provided the use 
is directly related to the service the school authorized. This would 
permit operators to improve the service, for example by fixing bugs or 
adding new features, or develop a new version of the service. An 
operator may not use the information it collected from one educational 
service to develop or improve a different service.
    The Commission believes that limiting product improvement and 
development in this way will allow ed tech providers to provide better 
services while helping to safeguard against the use of student data for 
non-educational purposes. We also believe that this proposed approach 
is consistent with the requirement under FERPA's school official 
exception that a school have a ``legitimate educational interest'' to 
share personal information without parental consent.
    The Commission does not agree with the commenters that recommended 
aligning the permissible uses of data collected under the school 
authorization exception with the Rule's support for the internal 
operations exception. The two exceptions serve different purposes, and 
the activities within the support for the internal operations 
definition are generally unnecessary for and unrelated to the provision 
of an educational purpose.\267\
---------------------------------------------------------------------------

    \267\ The Commission notes that one potential area of overlap 
between these exceptions is that the support for the internal 
operations exception allows an operator to personalize content on a 
website or online service. The Commission recognizes that some 
degree of personalization will be inherent in providing the ed tech 
service for which the student data is collected. For example, this 
can include personalizing curricula or advancing a student who has 
completed an assignment to the next level or unit in a lesson plan. 
While such personalization would be a permissible part of providing 
the service, personalization could not include the marketing of 
services even if those services were educational in nature.
---------------------------------------------------------------------------

    As an additional protection, the proposed school authorization 
exception would require operators to

[[Page 2057]]

have a written agreement with the school setting forth the exception's 
requirements. This written agreement must specify that the ed tech 
provider's use and disclosure of the data collected under the exception 
is limited to a school-authorized education purpose as defined in the 
Rule and for no other purpose. As an extra safeguard to help ensure 
that ed tech providers are using student data appropriately and to 
align the exception with FERPA, the required written agreement must 
specify that the school will have direct control over the provider's 
use, disclosure, and maintenance of the personal information under the 
exception. The agreement must also include the operator's data 
retention policy with respect to personal information collected from 
children under the school authorization exception.
iii. Who at the school should provide authorization?
    In response to the question of who should be able to provide 
authorization for data collection under the school authorization 
exception, a wide variety of commenters, including industry, FTC-
approved COPPA Safe Harbor programs, school personnel, and the Oregon 
Attorney General, called for flexibility.\268\ For example, while the 
Illinois Council of School Attorneys recommended against specifying who 
can provide authorization, it stated that if the Commission decides to 
do so, it should use general, flexible terminology such as ``employees 
designated by the school's administration or governing board'' to 
describe individuals who may provide authorization.\269\ The Oregon 
Attorney General called for flexibility and urged the Commission to be 
mindful that schools and districts obtain and implement ed tech in 
different ways.\270\ Another commenter, kidSAFE, recommended the 
Commission permit consent from an adult outside the school environment, 
including coaches or tutors.\271\
---------------------------------------------------------------------------

    \268\ See internet Association, at 15; ANA, at 13; SIIA, at 3; 
FOSI, at 5; kidSAFE, at 4; Illinois Council of School Attorneys, at 
2; Oregon Attorney General, at 2.
    \269\ Illinois Council of School Attorneys, at 2.
    \270\ Oregon Attorney General, at 2 (noting that, in Oregon, 
some schools contract with educational technology companies through 
an intragovernmental technology alliance while others do so 
independently).
    \271\ kidSAFE, at 4.
---------------------------------------------------------------------------

    Other commenters supported a more prescriptive approach,\272\ with 
some recommending that the Rule not allow teachers to provide 
consent.\273\ One commenter stated that few teachers are in a position 
to evaluate which ed tech services are trustworthy, adding that 
allowing individual teachers to make these decisions prevents school 
administrators from knowing what products are being used in the 
classroom.\274\ Another recommended requiring that, if schools are 
allowed to provide consent on behalf of parents, the school or district 
must have clear and uniform policies for adopting ed tech led by a team 
of qualified education research, curriculum, and privacy, and 
technology experts.\275\ Similarly, Lego recommended that only duly 
authorized individuals, such as IT administrators, data protection 
officers, or chief IT officers, provide consent through a contract with 
the ed tech provider.\276\
---------------------------------------------------------------------------

    \272\ See P. Aftab, at 8; Common Sense Media, at 8; Parent 
Coalition for Student Privacy, at 14; Lego, at 6; Privo, at 6; STOP, 
at 4.
    \273\ See P. Aftab, at 8; Common Sense Media, at 8; Lego, at 6; 
Privo, at 6; STOP, at 4.
    \274\ P. Aftab, at 8.
    \275\ Parent Coalition for Student Privacy, at 14.
    \276\ Lego, at 7.
---------------------------------------------------------------------------

    Because the Commission believes it is important to accommodate the 
different ways schools obtain and implement ed tech, the Commission 
agrees with the commenters that called for flexibility rather than a 
``one size fits all'' approach. At the same time, the Commission 
recognizes the need for measures to prevent the situation in which a 
school is unaware of the ed tech services their teachers have consented 
to on an ad hoc basis. Indeed, staff guidance has previously 
recommended that consent for ed tech to collect personal information 
comes from the schools or school districts rather than from individual 
teachers.\277\ To balance the need for flexibility with the need for 
oversight and accountability, the Commission proposes that the written 
agreement between the ed tech provider and the school, which the new 
Sec.  312.5(c)(10) exception would require, identify the name and title 
of the person providing consent and specify that the school has 
authorized the person to provide such consent.
---------------------------------------------------------------------------

    \277\ COPPA FAQs, FAQ N.3.
---------------------------------------------------------------------------

iv. Notice to Parents
    Many of the commenters supporting a school consent exception 
recommended that parents receive notice of the ed tech providers the 
school authorized to collect children's data.\278\ Some commenters 
suggested that the notice to parents come from schools, recommending 
that the notice be similar to the FERPA annual notification requirement 
\279\ or that schools make information about ed tech providers' 
information practices available to parents in a public place such as 
the school district's website.\280\
---------------------------------------------------------------------------

    \278\ See, e.g., CDT, at 8; Common Sense, at 11; Consumer 
Reports, at 17; FPF, at 12; The National PTA, at 3; Lego, at 6.
    \279\ CDT, at 8.
    \280\ FPF, at 12.
---------------------------------------------------------------------------

    Other commenters raised concerns about the Commission imposing 
obligations on schools through the Rule. For example, the Oregon 
Attorney General expressed concern that allowing an operator to shift 
notice obligations to schools would potentially shield operators from 
liability.\281\ Instead, the Oregon Attorney General recommended that 
the Commission require the operator to ``provide notice of its 
information practices in a manner that is easily accessible to all 
parents . . . and to inform the school on where parents may find such 
notice of information practices.'' \282\ Similarly, the Parent 
Coalition for Student Privacy recommended that, if the Commission 
creates an exception for school authorization, it require ed tech 
providers to dedicate space on their website for notices about the 
exception and explain how the data will be strictly used for 
educational purposes and state which third parties can access the 
data.\283\
---------------------------------------------------------------------------

    \281\ Oregon Attorney General, at 3.
    \282\ Id.
    \283\ Parent Coalition for Student Privacy, at 8-9 (also 
recommending that schools should also be required to link to and 
post this information as it applies to the specific education 
technology services the schools choose to utilize).
---------------------------------------------------------------------------

    The Commission agrees that notice is an important aspect of the 
proposed school authorization exception. At the same time the 
Commission agrees with commenters who raised concerns about imposing 
burdens on schools that may not have sufficient resources to undertake 
an additional administrative responsibility.\284\ To promote 
transparency without burdening schools, the Commission proposes 
requiring operators to provide notice. Namely, the Commission's 
proposed addition of Sec.  312.4(e), discussed earlier in Part IV.B.4., 
would require an operator that collects personal information from a 
child under the school authorization exception to include an additional 
notice on its website or online service noting that: (1) the operator 
has obtained authorization from a school to collect a child's personal 
information; (2) that the

[[Page 2058]]

operator will use and disclose the information for a school-authorized 
education purpose and no other purpose; and (3) that the school may 
review information collected from a child and request deletion of such 
information.\285\
---------------------------------------------------------------------------

    \284\ Moreover, the Commission cannot impose COPPA obligations 
on schools. COPPA applies to an operator of a website or online 
service directed to children, or any operator that has actual 
knowledge that it is collecting personal information from a child. 
15 U.S.C 6502(a)(1); 16 CFR 312.3.
    \285\ See Part IV.B.4. for discussion on this proposed change.
---------------------------------------------------------------------------

b. Audio File Exception
    In 2013, the Commission expanded the Rule's definition of 
``personal information'' to include ``[a] photograph, video, or audio 
file where such file contains a child's image or voice.'' \286\ Since 
that time there has been a dramatic increase in the popularity of 
internet-connected ``home assistants'' and other devices that are voice 
activated and controlled. This led to inquiries from stakeholders about 
the Rule's applicability to the collection of audio files containing a 
child's voice where an operator converts the audio to text and then 
deletes the audio file. While the Commission determined that the Rule 
applies to such collection, it recognized the value of using verbal 
commands to perform search and other functions on internet-connected 
devices, especially for children who have not yet learned to write or 
those with disabilities. Accordingly, in 2017, the Commission issued an 
enforcement policy statement indicating that it would not take action 
against an operator who, without obtaining parental consent, collects a 
child's voice recording, provided the operator only uses the audio file 
as a replacement for written words, such as to effectuate an 
instruction or request, and the operator retains the recording only for 
a brief period.\287\
---------------------------------------------------------------------------

    \286\ 16 CFR 312.2, definition of ``personal information.''
    \287\ Enforcement Policy Statement Regarding the Applicability 
of the COPPA Rule to the Collection and Use of Voice Recordings, 82 
FR 58076 (Dec. 8, 2017), available at https://www.ftc.gov/system/files/documents/public_statements/1266473/coppa_policy_statement_audiorecordings.pdf. The enforcement 
statement also specified that the operator must provide the notice 
required by the COPPA Rule and sets forth a number of important 
limitations on the policy's application.
---------------------------------------------------------------------------

    In the 2019 Rule Review Initiation, the Commission asked whether it 
should modify the Rule to include a parental consent exception based on 
the enforcement policy statement. The Commission also asked whether 
such an exception should allow an operator to use de-identified audio 
files for product improvement and, if so, how long an operator could 
retain such data. Additionally, the Commission asked whether de-
identification of audio files is effective at preventing re-
identification.
    The vast majority of commenters that addressed the issue 
recommended the Commission modify the Rule to include a parental 
consent exception for audio files based on the existing enforcement 
policy statement.\288\ Some of these commenters supported the narrow 
confines of the current enforcement statement, which requires the 
collected audio file to serve solely as a replacement for written words 
and be maintained only until completion of that purpose.\289\ A number 
of other commenters, however, recommended that the Commission adopt a 
more expansive audio exception. For example, Google noted that many 
voice actions for internet-connected devices are not a replacement for 
written words. Because of this, Google recommended that the Commission 
include an expanded exception that ``covers voice data used to perform 
a task or engage with a device, as well as to replace written words.'' 
\290\ Others made similar recommendations.\291\
---------------------------------------------------------------------------

    \288\ See, e.g., CIPL, at 6; TechFreedom, at 22; ANA, at 14; 
CCIA, at 13; CTIA, at 5-6; ESA, at 22-23; Google, at 19; internet 
Association, at 17-18; NCTA, at 11; U.S. Chamber of Commerce, at 5-
7.
    \289\ FOSI, at 6; FPF, at 5-6; The Toy Association, at 17.
    \290\ Google, at 19 (noting that a written command is not 
typically used to play a video or turn on an appliance and that 
collection of this type of voice data would pose no additional risk 
as it would still be briefly retained only to complete the requested 
action).
    \291\ Id.; see also, e.g., CCIA, at 13 (noting that the 
exception should apply to voice data generally as emerging 
technologies may not necessarily use verbal commands as a 
``replacement'' for written words); U.S. Chamber of Commerce, at 6 
(noting that voice-activated commands may not constitute a 
replacement for written words).
---------------------------------------------------------------------------

    Several commenters argued that where an operator de-identifies the 
audio file, the exception should allow it to engage in product 
improvement as well as internal operations such as improving 
functionality and personalization.\292\ Only a few of these commenters 
discussed the means by which an operator could effectively de-identify 
audio files. One suggested using the approach set forth in a White 
House draft privacy law, which would require the operator to alter the 
data to prevent it from being linked to a specific individual, to 
commit not to re-identify the data, and to require third-party 
recipients to similarly commit not to re-identify the data.\293\ 
Another commenter suggested the operator could de-link the audio file 
from a user's account or device identifier.\294\
---------------------------------------------------------------------------

    \292\ See internet Association, at 17-18 (asserting that the 
exception should allow use of audio recordings to train and improve 
voice recognition and understanding systems); ANA, at 15 (noting 
that the exception should allow operators to use de-identified audio 
files to improve current products and future products); TechFreedom, 
at 23 (noting that the exception should allow de-identified audio 
files to train automatic speech recognition systems); NCTA, at 11 
(recommending the Commission allow product improvement as well as 
improved functionality, personalization or analytics, and customer 
service). See also CTIA, at 6 (recommending that even if data is not 
de-identified, the exception should allow an operator to retain the 
data for product improvement, provided it is not combined with other 
personal information and appropriate safeguards are in place).
    \293\ See TechFreedom, at 25-26, citing White House, 
Administration Discussion Draft: Consumer Privacy Bill of Rights Act 
of 2015 (Feb. 27, 2015), available at https://obamawhitehouse.archives.gov/sites/default/files/omb/legislative/letters/cpbr-actof-2015-discussion-draft.pdf. This approach is based 
on the Commission's own data de-identification standard. See 
Protecting Consumer Privacy in an Era of Rapid Change, Federal Trade 
Commission (March 2012), page 22, available at https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-report-protecting-consumer-privacy-era-rapid-change-recommendations/120326privacyreport.pdf.
    \294\ NCTA, at 11.
---------------------------------------------------------------------------

    The Commission received a small number of comments that opposed 
adding a consent exception for audio files to the Rule. Arguing against 
an exception, a group of State Attorneys General characterized 
recordings of children's voices as biometric data and stated that, as 
such, they are ``individually-identifying and immutable.'' \295\ These 
commenters also questioned whether operators could effectively and 
consistently de-identify audio files, pointing to numerous instances in 
which anonymized data had been re-identified.\296\ A coalition of 
consumer groups argued that the Commission's existing enforcement 
statement, as structured, effectively protects children's privacy and 
there is no need to amend the Rule to add an exception.\297\ The 
commenters also stated that if the Commission does add an exception to 
the Rule, the exception should not permit operators to retain or use 
collected audio files for product improvement even if the files are de-
identified.\298\
---------------------------------------------------------------------------

    \295\ Joint Attorneys General, at 11-12. See also A. Wang, at 2-
4 (arguing that parental consent should be required for the 
collection of children's voice recordings because of the risks of an 
insecure transfer of data and noting that de-identification is not 
effective at preventing re-identification).
    \296\ Joint Attorneys General, at 11-12; A. Wang, at 2-4.
    \297\ Joint Consumer Groups, at 36-41.
    \298\ Id.
---------------------------------------------------------------------------

    Based on the comments overall, the Commission proposes codifying 
the audio file enforcement statement as an exception to the Rule's 
parental consent requirement, with one modification. The Commission 
believes the calls to expand the exception to also include audio files 
used to perform a task or to

[[Page 2059]]

engage with a device have merit. Limiting the proposed exception to 
circumstances in which the voice data replaces written words would be 
overly restrictive and unnecessarily prevent its application to a 
variety of internet-connected services that do not involve written 
commands. Further, because the proposed exception requires the operator 
to delete the collected audio file as soon as the command or engagement 
is completed, this expansion will not create additional risk to 
children's privacy. Additionally, to the extent an operator collects 
personal information beyond the audio file--such as a transcript of the 
audio file in combination with other personal information--the operator 
could not utilize the audio file exception and would have to afford 
COPPA's protections to that information.
    The Commission, however, does not agree that the exception should 
allow operators to retain the audio files or to use them for other 
purposes such as product improvement and internal operations, even if 
the operator has taken steps to de-identify the data. The Commission 
agrees that a recording of a child's voice is particularly sensitive 
given that, like other biometric data, it is personal and unique. 
Consequently, the privacy risk created by such data potentially falling 
into the wrong hands and being re-identified exceeds the benefit of 
allowing broader use. This is especially the case where parents are not 
provided direct notice or provided the opportunity to consent to such 
practices.
c. Other Exceptions
    The Commission also proposes adding language to the support for the 
internal operations exception, Sec.  312.5(c)(7), to address the new 
online notice requirement the Commission proposes.\299\ This proposal 
indicates that an operator that collects information under the support 
for the internal operations exception must provide information in its 
online notice regarding its use of the exception. The Commission also 
proposes technical fixes to Sec.  312.5(c)(6) for clarity purposes. 
Namely, the Commission proposes changing Sec.  312.5(c)(6)(i) from 
``protect the security or integrity of its website or online service'' 
to ``protect the security or integrity of the website or online 
service'' (emphasis added). The Commission also proposes removing 
``be'' in Sec.  312.5(c)(6)(iv) to fix a typographical issue.
---------------------------------------------------------------------------

    \299\ This proposal is discussed in Part IV.B.3.
---------------------------------------------------------------------------

    In addition, the Commission proposes to modify Sec.  312.5(c)(4) to 
prohibit operators from utilizing this exception to encourage or prompt 
use of a website or online service. This proposed addition prohibits 
operators from using online contact information to optimize user 
attention or maximize user engagement with the website or online 
service, including by sending push notifications, without first 
obtaining verifiable parental consent.\300\
---------------------------------------------------------------------------

    \300\ The Commission acknowledges that the COPPA FAQs currently 
indicate that operators may rely on the multiple contact exception 
to send push notifications to children without first obtaining 
verifiable parental consent. COPPA FAQs, FAQ J.9. The Commission is 
aware of recent media reports indicating that children may be 
overusing online services due to engagement-enhancing techniques. 
The Commission is concerned about the potential harm from such 
overuse and therefore deems it important to ensure parents are 
notified and provide verifiable parental consent before operators 
use such techniques to further children's engagement with websites 
and online services.
---------------------------------------------------------------------------

    Additionally, several commenters recommended that the Commission 
expand the Rule's current one-time use exception, Sec.  
312.5(c)(3).\301\ Specifically, multiple commenters noted that the 
Commission should expand the types of information collected under this 
exception to include telephone numbers.\302\ A commenter also requested 
the Commission expand this exception to permit multiple contacts with a 
child without providing notice and an opportunity to opt out, as 
required by the multiple contact exception.\303\
---------------------------------------------------------------------------

    \301\ See, e.g., kidSAFE, at 13; Consumer Technology Association 
(``CTA''), at 6-7; ESA, at 24-25; NCTA, at 17.
    \302\ kidSAFE, at 13; CTA, at 6-7; ESA, at 24-25; NCTA, at 17.
    \303\ kidSAFE, at 13.
---------------------------------------------------------------------------

    As explained earlier in the discussion regarding the definition of 
``online contact information,'' the Commission proposes modifying this 
definition to include a mobile telephone number, provided the operator 
uses it only to send a text message and not for voice communication, 
unless and until the operator has obtained the parent's verifiable 
parental consent.\304\ The Commission believes that the proposed 
revision to the definition of ``online contact information'' addresses 
commenters' recommendations to permit the use of mobile telephone 
numbers to contact children under the one-time use exception. However, 
the Commission stresses that under the proposed definition of ``online 
contact information,'' operators using a child's mobile telephone 
number under this exception may only text the child and may not call 
the child.
---------------------------------------------------------------------------

    \304\ This discussion can be found in Part IV.A.1.
---------------------------------------------------------------------------

    Further, the Commission is not persuaded by commenters suggesting 
that it should expand this exception to permit multiple contacts with a 
child without offering parents notice and the opportunity to opt out. 
The COPPA statute envisioned the scenario in which an operator would 
have to contact a child more than once to respond to a specific 
request, and Congress included notice and opt-out requirements in 
association with such scenario.\305\ This scenario was codified in the 
COPPA Rule under the multiple contact exception, Sec.  312.5(c)(4). 
Commenters' recommendation essentially asks the Commission to remove 
the multiple contact exception's notice and consent requirements. 
However, the Commission believes these elements are required by the 
COPPA statute, and therefore it does not propose such modifications.
---------------------------------------------------------------------------

    \305\ 15 U.S.C. 6502(b)(2)(C); 64 FR 59888 at 59902.
---------------------------------------------------------------------------

D. Right To Review Personal Information Provided by a Child (16 CFR 
312.6)

    The Commission proposes a new paragraph related to the Commission's 
proposed school authorization exception.\306\ Specifically, the 
Commission proposes requiring operators utilizing such exception to 
provide schools with the rights operators currently provide parents 
under Sec.  312.6(a), namely the right to review personal information 
collected from a child, refuse to permit operators' further use or 
future online collection of personal information, and to direct 
operators to delete such information. Under this proposal, operators 
utilizing the school authorization exception would not be required to 
provide such rights to parents for information collected under the 
exception.
---------------------------------------------------------------------------

    \306\ See Part IV.C.3.a. for further discussion of the proposed 
school authorization exception.
---------------------------------------------------------------------------

    Requiring operators to fulfill requests, such as deletion requests, 
from each parent could result in schools having to provide different 
services to different children or forego particular services for the 
entire class based on the request of an individual parent. To reduce 
this burden, the Commission proposes this modification. The Commission 
also proposes deleting the reference to ``parent'' in the Sec.  312.6 
heading to account for this modification.

E. Prohibition Against Conditioning a Child's Participation on 
Collection of Personal Information (16 CFR 312.7)

    Section 312.7 of the Rule provides that an operator is prohibited 
from conditioning a child's participation in a game, the offering of a 
prize, or another activity on the child's disclosing more

[[Page 2060]]

personal information than is reasonably necessary to participate in 
such activity.
    The Commission notes that this provision serves as an outright 
prohibition on collecting more personal information than is reasonably 
necessary for a child to participate in a game, offering of a prize, or 
another activity. Therefore, operators may not collect more information 
than is reasonably necessary for such participation, even if the 
operator obtains consent for the collection of information that goes 
beyond what is reasonably necessary.
    With respect to the scope of Sec.  312.7, the Commission is 
considering adding new language to address the meaning of ``activity,'' 
as that term is used in Sec.  312.7. Specifically, the Commission is 
considering including language in Sec.  312.7 to provide that an 
``activity'' means ``any activity offered by a website or online 
service, whether that activity is a subset or component of the website 
or online service or is the entirety of the website or online 
service.'' It welcomes comment on whether this language is consistent 
with the COPPA statute's text and purpose, and it also welcomes comment 
on whether this change is necessary given the breadth of the plain 
meaning of the term ``activity.''

F. Confidentiality, Security, and Integrity of Personal Information 
Collected From Children (16 CFR 312.8)

    Section 312.8 of the Rule provides:
    The operator must establish and maintain reasonable procedures to 
protect the confidentiality, security, and integrity of personal 
information from children. The operator must also take reasonable steps 
to release children's personal information only to service providers 
and third parties who are capable of maintaining the confidentiality, 
security, and integrity of such information, and who provide assurances 
that they will maintain the information in such a manner.
    In the 2019 Rule Review Initiation, the Commission asked whether 
operators have implemented sufficient safeguards to protect the 
personal information they collect from children. The Commission also 
asked whether the requirements of Sec.  312.8 are adequate and whether 
the Rule should include more specific data security requirements.
    Many commenters asked the Commission to clarify or strengthen 
operators' obligations under this section. For example, a coalition of 
consumer groups criticized the Commission for not promulgating clear 
data security regulations as directed by the COPPA statute.\307\ These 
commenters recommended that the Commission elaborate on the meaning of 
``reasonable procedures to protect the confidentiality, security, and 
integrity'' of children's information.\308\ Similarly, an FTC-approved 
COPPA Safe Harbor program recommended that the Commission provide 
detailed guidance about minimum standards for what constitutes 
``reasonable procedures,'' to help guide operators and FTC-approved 
COPPA Safe Harbor programs tasked with ensuring that companies are 
compliant with the Rule.\309\
---------------------------------------------------------------------------

    \307\ See Joint Consumer Groups, at 54-56 (criticizing the 
Commission for neglecting to promulgate regulations that ``require 
the operator of such a website or online service to establish and 
maintain reasonable procedures to protect the confidentiality, 
security, and integrity of personal information collected from 
children,'' but only adding ``small sections'' about releasing data 
to third parties in Sec.  312.8 and about data retention and 
deletion in Sec.  312.10).
    \308\ Id. at 56 (requesting the Commission, in particular, 
clarify operators' obligations to protect the ``confidentiality'' of 
children's personal information).
    \309\ CARU, at 10 (noting that, in its experience, companies 
make good-faith efforts to establish and maintain reasonable 
procedures but could use additional guidance about ``minimum 
standards,'' such as encryption).
---------------------------------------------------------------------------

    Some commenters argued that recent data breaches in all industries 
demonstrate the need for stricter data security requirements for 
children's personal information.\310\ Other commenters expressed a more 
narrow concern that the evolving online landscape in schools, combined 
with an increase in data breaches and ransomware attacks, suggests the 
need for stricter data security requirements for children's personal 
information generally.\311\ In contrast, a small number of commenters 
opined that operators are adequately protecting children's personal 
information. For example, the Internet Association stated that the 
increase in well-publicized breaches has heightened operators' 
awareness of their obligations and encouraged them to safeguard 
personal data.\312\
---------------------------------------------------------------------------

    \310\ See e.g., Consumer Reports, at 24 (listing examples of 
data breaches and suggesting that the Commission provide 
``sufficient enforcement'' to incentivize companies to better 
steward children's personal information).
    \311\ Parent Coalition for Student Privacy, at 4 (recommending 
that the Commission strengthen the Rule's data security requirements 
generally, in light of the increase in data breaches of schools, 
school districts, and their vendors); see also CoSN, at 2, 4-5 
(asking the Commission to strengthen the Rule's security 
requirements generally, considering the increase of cyberattacks on 
school districts and citing CoSN's 2019 leadership survey report 
identifying cybersecurity as the first priority for school system 
technology administrators).
    \312\ Internet Association, at 20 (``With the emergence of other 
privacy and security requirements and fall-out from well-publicized 
breaches, operators are increasingly aware of their obligations to 
safeguard personal data about users of any age by maintaining 
physical, technical, and administrative security procedures that are 
reasonable and appropriate in light of the nature of the data to be 
protected'') (footnote omitted). See also P. Aftab, at 10 (stating 
that the ``over-arching principles'' of COPPA's data security 
guidelines are ``working well,'' although they may require updating 
and closer examination).
---------------------------------------------------------------------------

    Commenters on both sides--those who believe operators are 
adequately protecting children's personal information and those who 
believe operators need to do more--recommended against adding 
prescriptive data security requirements or risk management controls in 
the Rule. These commenters expressed concern that such measures could 
become quickly outdated. For example, the Internet Association and The 
Toy Association expressed concerns that specific, detailed security 
requirements and risk management controls might prevent operators from 
keeping pace with evolving technology and security threats.\313\ The 
internet Association opined that the Rule's flexibility permits 
operators to develop privacy and security risk management frameworks 
that are tailored to their activities and users, and that also keep 
pace with technology, evolving security threats, and varying security 
risks.\314\ FTC-approved COPPA Safe Harbor program kidSAFE and a 
technology trade association recommended that the Commission keep the 
``broad and flexible'' standard in Sec.  312.8 for similar 
reasons.\315\ A group of State Attorneys General also supported a 
flexible approach.\316\ These commenters urged the Commission to 
proceed cautiously and make clear that any additional data security 
requirements within the Rule are simply illustrative examples of what 
constitutes ``reasonable procedures'' rather than an exhaustive 
list.\317\ Such an approach, they argued, would encourage operators to 
consistently monitor and update security protocols that evolve with 
``rapid advances in technology and the enterprising nature of 
cybercriminals.'' \318\
---------------------------------------------------------------------------

    \313\ Internet Association, at 20; The Toy Association, at 22 
(expressing concerns that specific data security requirements could 
become quickly outdated and might add costs to operators who must 
also comply with security requirements in other laws, such as the 
GDPR and State data security laws).
    \314\ Internet Association, at 20.
    \315\ kidSAFE, at 16; see also Consumer Technology Association, 
at 19 (opining that ``[f]lexible, dynamic approaches to security are 
the best answer to solving the security challenges of both today and 
tomorrow'').
    \316\ Joint Attorneys General, at 14-15.
    \317\ Id.
    \318\ Id. at 14.
---------------------------------------------------------------------------

    kidSAFE also encouraged the Commission to consider the varying

[[Page 2061]]

levels of resources and bargaining power that different operators hold. 
kidSAFE claimed that smaller companies often lack the resources to 
invest in their own data security measures or the bargaining power to 
obtain security assurances from the third-party service providers they 
use.\319\ An individual commenter expressed similar concerns that 
additional data security requirements might further burden small 
businesses, which already may not be in a position to determine whether 
service providers are capable of the Rule's existing security 
requirements.\320\
---------------------------------------------------------------------------

    \319\ kidSAFE, at 15 (opining that it believes operators are 
implementing sufficient security safeguards considering their 
varying sizes).
    \320\ K. O'Connell, at 2.
---------------------------------------------------------------------------

    In enacting COPPA, Congress recognized the need for heightened 
protections for children's personal information, and the Commission has 
long recognized a similar need.\321\ The Commission agrees that the 
proliferation of data breaches in all industries, including schools, 
supports strong and effective data security requirements, especially 
for particularly sensitive information like children's data. The 
Commission also agrees that operators would benefit from additional 
clarity and detail regarding the Rule's security requirements set forth 
in Sec.  312.8.
---------------------------------------------------------------------------

    \321\ See, e.g., then-FTC Chairman Robert Pitofsky, FTC 
Testimony before Senate Committee on Commerce, Science & 
Transportation, U.S. Senate ``Protection of Children's Privacy on 
the World Wide Web,'' Sept. 23, 1998, at 4 (testifying in support of 
enacting COPPA and describing safety concerns that the disclosure of 
children's personal information may lead to, as pedophiles and other 
sexual predators use online services to identify and contact 
children), available at https://www.ftc.gov/public-statements/1998/09/prepared-statement-federal-trade-commission-protection-childrens-privacy; see also then-FTC Chairman Jon Leibowitz, ``Updated FTC 
COPPA Rule,'' Dec. 19, 2012, at 6 (explaining that while COPPA 
covers only ``a small sliver of the internet'' it is ``an important 
sliver, a small, Congressionally-mandated oasis sheltering personal 
privacy, one in which websites must respect the privacy of the most 
vulnerable and precious among us''), available at https://www.ftc.gov/public-statements/2012/12/statement-ftc-chairman-jon-leibowitz-updated-coppa-rule-prepared-delivery.
---------------------------------------------------------------------------

    For these reasons, the Commission proposes modifications to the 
Rule's security requirements. Specifically, the Commission proposes to 
split the operator's requirements in Sec.  312.8 into discrete 
paragraphs and provide further guidance as to steps operators can take 
to comply with each requirement. The second paragraph will provide more 
guidance on the ``reasonable procedures'' that an operator must 
establish and maintain under newly-numbered Sec.  312.8(a) to protect 
the confidentiality, security, and integrity of personal information 
from children. The third paragraph will address the ``reasonable 
steps'' an operator should take to release children's personal 
information only to those capable of protecting such and who provide 
written assurances to protect the information.
    First, the Commission proposes modifying Sec.  312.8 to specify 
that operators must, at minimum, establish, implement, and maintain a 
written comprehensive security program that contains safeguards that 
are appropriate to the sensitivity of children's information and to the 
operator's size, complexity, and nature and scope of activities. This 
requirement is modeled on the Commission's original Safeguards Rule 
implemented under the Gramm-Leach-Bliley Act (``GLBA''), which provides 
heightened protections for financial institutions' customer data.\322\
---------------------------------------------------------------------------

    \322\ Safeguards Rule, Final Rule, 67 FR 36484 (May 23, 2002), 
available at https://www.ftc.gov/sites/default/files/documents/federal_register_notices/standards-safeguarding-customer-information-16-cfr-part-314/020523standardsforsafeguardingcustomerinformation.pdf.
---------------------------------------------------------------------------

    To provide additional guidance, the proposed Sec.  312.8 security 
program must contain a number of specific elements including 
designating an employee to coordinate the information security program; 
identifying and, at least annually, performing additional assessments 
to identify risks to the confidentiality, security, and integrity of 
personal information collected from children; designing, implementing, 
and maintaining safeguards to control any identified risks, as well as 
testing and monitoring the effectiveness of such safeguards; and, at 
least annually, evaluating and modifying the information security 
program.
    The Commission believes that these modifications are appropriate 
for several reasons. First, this approach provides additional guidance 
to operators and FTC-approved COPPA Safe Harbor programs, while also 
maintaining the Rule's flexibility by allowing for technological 
advancements and taking into account an operator's size, complexity, 
and the nature and scope of its activities. It is also consistent with 
prior Commission COPPA and data security decisions and guidance.\323\
---------------------------------------------------------------------------

    \323\ See, e.g., In re Retina-X Studios, LLC, File No. 172 3118 
(2020), available at https://www.ftc.gov/legal-library/browse/cases-proceedings/172-3118-retina-x-studios-llc-matter; United States vs. 
Unixiz, Inc., et al., No. 5:19-cv-2222 (N.D. Cal. 2019), available 
at https://www.ftc.gov/legal-library/browse/cases-proceedings/172-3002-unixiz-inc-doing-business-i-dressupcom.
---------------------------------------------------------------------------

    In addition to the proposed written data security program, the 
Commission also proposes adding language to Sec.  312.8 to clarify that 
operators that release personal information to third parties or other 
operators must obtain written assurances that the recipients will 
employ reasonable measures to maintain the confidentiality, security, 
and integrity of the information. In 2013, when the Commission amended 
Sec.  312.8 to require operators to ``take reasonable steps to release 
children's personal information only to service providers and third 
parties who are capable of maintaining the confidentiality, security 
and integrity of such information, and who provide assurances that they 
will maintain the information in such a manner,'' the Commission 
envisioned that operators would obtain assurances ``by contract or 
otherwise.'' \324\ The Commission based this requirement on a similar 
obligation of financial institutions under the GLBA, which requires 
entities to ``requir[e] your service providers by contract to implement 
and maintain such safeguards'' (emphasis added).\325\ While the 
Commission expanded on the GLBA's provision to allow operators to 
obtain assurances by contract ``or otherwise,'' the Commission did not 
intend to allow operators to rely on verbal assurances alone. Rather, 
the Commission envisioned other written assurances for which there is 
tangible evidence, such as a written email or a service provider's 
written terms and conditions.
---------------------------------------------------------------------------

    \324\ 78 FR 3972 at 3995.
    \325\ 16 CFR 314.4(f)(2) (requiring financial institutions to 
obtain contracts with service providers to implement and maintain 
safeguards).
---------------------------------------------------------------------------

    Accordingly, the Commission proposes inserting ``written'' to 
clarify that the assurances operators must obtain from other operators, 
service providers, and third parties to whom the operator releases 
children's personal information, or who collect such on the operator's 
behalf, must be in writing. As similarly noted in the Rule review that 
led to the 2013 Amendments,\326\ this provision is intended to address 
security issues surrounding business-to-business releases of data. The 
Commission did not seek specific comment on this aspect of the Rule's 
security requirements and therefore welcomes comment on this proposed 
modification.
---------------------------------------------------------------------------

    \326\ 76 FR 59804 at 59821.
---------------------------------------------------------------------------

G. Data Retention and Deletion Requirements (16 CFR 312.10)

    Section 312.10 of the Rule currently states that ``an operator of a 
website or online service shall retain personal information collected 
online from a child for only as long as is reasonably

[[Page 2062]]

necessary to fulfill the purpose for which the information was 
collected.'' This section further states that ``the operator must 
delete such information using reasonable measures to protect against 
unauthorized access to, or use of, the information in connection with 
its deletion.''
    In 2013, the Commission amended the Rule to add the data retention 
and deletion requirements of Sec.  312.10 pursuant to its 15 U.S.C. 
6502(b)(1)(D) authority to establish regulations requiring operators to 
establish and maintain reasonable procedures to protect the 
confidentiality, security, and integrity of personal information 
collected from children. At that time, the Commission explained that 
timely deletion of data is an integral part of a reasonable data 
security strategy, referencing the Institute for Public 
Representation's comment that without such ``operators have no 
incentive to eliminate children's personal information and may retain 
it indefinitely.'' \327\ The Commission, however, rejected requests to 
specify a finite timeframe in which companies must delete data, instead 
deciding to choose ``the phrases `for only as long as is reasonably 
necessary' and `reasonable measures' to avoid the very rigidity about 
which commenters opposing this provision complain.'' \328\
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    \327\ 78 FR 3972 at 3995.
    \328\ 78 FR 3972 at 3995, note 302 (rejecting the Institute for 
Public Representation's request to require companies to delete 
children's personal information within three months).
---------------------------------------------------------------------------

    Although the Commission did not specifically seek comment on data 
deletion in its 2019 Rule Review Initiation, many of the commenters 
that recommended the Commission provide more guidance on the Sec.  
312.8 requirements also suggested that the Commission clarify 
operators' obligations under Sec.  312.10. These commenters expressed 
concern that, without specific time limits on data retention, operators 
could read the Rule to allow indefinite retention of children's 
personal information. For example, a group of State Attorneys General 
asked the Commission to modify the Rule to require operators or others 
maintaining children's data to serve contextual ads to delete such 
information immediately at the end of a user's session.\329\ Many 
consumer groups and individual commenters also opined that an increase 
in school data breaches and ransomware attacks indicates a need for 
stronger data deletion requirements within the Rule generally.\330\ A 
few commenters asked specifically for data retention limits for 
personal information stored within the education system or by ed tech 
providers.\331\ Similarly, a non-profit privacy organization requested 
that the Commission make it clear that operators cannot retain student 
data indefinitely.\332\
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    \329\ Joint Attorneys General, at 8.
    \330\ Parent Coalition for Student Privacy, at 4 (recommending 
that the Commission incorporate stronger security standards in the 
Rule generally, considering the increase in data breaches of 
schools, school districts, and their vendors, including 
strengthening COPPA's requirements for data minimization and 
deletion); CoSN, at 4-5 (recommending that, in light of the growing 
number of cyberattacks on school districts, the Commission 
strengthen the Rule's security requirements generally and citing 
CoSN's 2019 leadership survey report identifying cybersecurity as 
the first priority for school system technology administrators, 
including ``efforts to promote transparency, and strengthen data 
retention and deletion policies'').
    \331\ See, e.g., Illinois Families for Public Schools, at 2 
(asking the Commission to have COPPA adopt Illinois' State law 
approach that retention of student data must be purpose driven and 
minimized); D. Derigiotis Burns Wilcox, at 2 (requesting the 
Commission adopt mandatory limits on the period for retaining 
personal information stored within the educational system and 
affiliated vendors).
    \332\ FPF, at 12.
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    Section 312.10 prohibits operators from retaining children's 
personal information indefinitely. The Commission framed the 
prohibition on data retention to permit enough flexibility to allow 
operators to retain data only for specified, necessary business needs.
    Given the misunderstanding identified by the consumer groups, the 
Commission now proposes to modify this section to state more explicitly 
operators' duties with regard to the retention of personal information 
collected from children. Specifically, the Commission proposes 
clarifying that operators may retain personal information for only as 
long as is reasonably necessary for the specific purpose for which it 
was collected, and not for any secondary purpose. For example, if an 
operator collects an email address from a child for account creation 
purposes, the operator could not then use that email address for 
marketing purposes without first obtaining verifiable parental consent 
to use that information for that specific purpose. Additionally, the 
operator must delete the information when such information is no longer 
reasonably necessary for the purpose for which it was collected.\333\ 
In any event, personal information collected from a child may not be 
retained indefinitely.
---------------------------------------------------------------------------

    \333\ See Compl., United States v. Amazon.com, Inc., et al., 
Case No. 2:23-cv-00811 (W.D. Wash. May 31. 2023), available at 
https://www.ftc.gov/system/files/ftc_gov/pdf/Amazon-Complaint-%28Dkt.1%29.pdf (alleging that Amazon.com. Inc. and Amazon.com 
Services LLC violated Sec.  312.10 by retaining children's personal 
information longer than was reasonably necessary to fulfill the 
purposes for collecting the information).
---------------------------------------------------------------------------

    The Commission also proposes requiring an operator to, at least, 
establish and maintain a written data retention policy specifying its 
business need for retaining children's personal information and its 
timeframe for deleting it, precluding indefinite retention.
    These proposed modifications are intended to reinforce section 
312.7's data minimization requirements, which prohibit an operator from 
conditioning a child's participation in a game, the offering of a 
prize, or another activity on the child's disclosing more personal 
information than is reasonably necessary to participate in such 
activity.\334\ Namely, these proposed modifications require that an 
operator must have a specific business need for retaining information 
collected from children, and may retain such information for only so 
long as is reasonably necessary for the specific purpose for which it 
was collected, and not for any secondary purpose. The modifications 
also preclude operators from retaining such information indefinitely. 
The Commission welcomes comment on its proposed modification to this 
section.
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    \334\ 16 CFR 312.7.
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H. Safe Harbor (16 CFR 312.11)

    The 2019 Rule Review Initiation posed a number of questions related 
to the Rule's safe harbor program provision, including: whether it has 
been effective in enhancing compliance with the Rule; whether the 
Commission should modify the criteria currently enumerated in Sec.  
312.11(b) for approval of FTC-approved COPPA Safe Harbor programs; 
whether the Commission should clarify or modify Sec.  312.11(g) with 
respect to the Commission's discretion to initiate an investigation or 
bring an enforcement action against an operator participating in an 
FTC-approved COPPA Safe Harbor program; whether the Commission should 
consider changes to the safe harbor monitoring process, including to 
promote greater transparency; and whether the Rule should include 
factors for the Commission to consider in revoking approval for an FTC-
approved COPPA Safe Harbor program.
    A number of commenters expressed support for the Rule's safe harbor 
program.\335\ At the same time, however,

[[Page 2063]]

multiple commenters recommended that the Commission enhance oversight 
of, and transparency regarding, the safe harbor program by modifying 
the criteria for the Commission's approval of FTC-approved COPPA Safe 
Harbor programs' guidelines and the Rule's requirements for FTC-
approved COPPA Safe Harbor programs to submit reports to the Commission 
and retain records.\336\ While the Commission continues to believe that 
FTC-approved COPPA Safe Harbor programs serve an important function in 
helping companies comply with COPPA, it finds merit in the 
recommendations for enhanced oversight and transparency. Accordingly, 
the Commission proposes revisions to Sec.  312.11 of the Rule as set 
forth in this part of the preamble, which it believes will further 
strengthen the COPPA Rule's safe harbor program.
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    \335\ See, e.g., CARU, at 11; SuperAwesome, at 31; PRIVO, at 8; 
FOSI, at 6; CIPL, at 7. But see, e.g., S. Egelman, at 4-5 (stating 
the belief that FTC-approved COPPA Safe Harbor programs certify 
online services that do not comply with the Rule and that, if the 
COPPA statute permitted the Commission to do so, it would be better 
for the Commission to eliminate the safe harbor program); Joint 
Consumer Groups, at 15-20 (arguing that the safe harbor program does 
not effectively protect children's privacy because of online 
services' low participation rates, a lack of sufficiently strict 
requirements for approval of safe harbor programs, and a lack of 
safe harbor programs' enforcement of their guidelines).
    \336\ See, e.g., CARU, at 11; SuperAwesome, at 31; CIPL, at 7.
---------------------------------------------------------------------------

1. Criteria for Approval of Self-Regulatory Program Guidelines (Sec.  
312.11(b))
    Paragraph 312.11(b) of the Rule requires that FTC-approved COPPA 
Safe Harbor programs demonstrate that they meet certain performance 
standards, specifically: (1) requirements to ensure operators subject 
to the self-regulatory program guidelines (``subject operators'') 
provide substantially the same or greater protections for children as 
those contained in Sec. Sec.  312.2 through 312.8 and 312.10; (2) an 
effective, mandatory mechanism for the independent assessment of 
subject operators' compliance with the FTC-approved COPPA Safe Harbor 
program's guidelines; and (3) disciplinary actions for subject 
operators' non-compliance with self-regulatory program guidelines.
    Several commenters recommended that the Commission provide 
additional clarity regarding the criteria the Commission applies when 
determining whether to approve an FTC-approved COPPA Safe Harbor 
program's self-regulatory guidelines. One FTC-approved COPPA Safe 
Harbor program suggested that the Commission consider publishing a 
standard set of program requirements, assessment questionnaires, and 
technical tests for all FTC-approved COPPA Safe Harbor programs to 
utilize with their subject operators.\337\ Another recommended that the 
FTC consider enumerating minimum operating standards for FTC-approved 
COPPA Safe Harbor programs, including how often they monitor subject 
operators' sites and communicate with subject operators.\338\ Another 
commenter recommended that the Commission should require FTC-approved 
COPPA Safe Harbor programs to apply a duty of care to promote 
principles behind COPPA when they conduct safe harbor program audits 
and certifications.\339\
---------------------------------------------------------------------------

    \337\ TRUSTe, at 3.
    \338\ CARU, at 11.
    \339\ SuperAwesome, at 31.
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    The Commission finds merit in the overall call for additional 
clarity regarding its criteria for approving FTC-approved COPPA Safe 
Harbor programs' self-regulatory guidelines. As discussed previously, 
the Commission proposes changes to the Rule's security 
requirements.\340\ These proposed modifications provide additional 
guidance on the ``reasonable procedures'' that an operator must 
establish and maintain to protect the confidentiality, security, and 
integrity of personal information from children. FTC-approved COPPA 
Safe Harbor programs can utilize that guidance in determining whether 
subject operators meet the Rule's Sec.  312.8 requirements.
---------------------------------------------------------------------------

    \340\ See Part IV.F.
---------------------------------------------------------------------------

    Further, in parallel with the proposed changes to Sec.  312.8 
discussed in Part IV.F., the Commission proposes to revise Sec.  
312.11(b)(2) to state explicitly that an FTC-approved COPPA Safe Harbor 
program's assessments of subject operators must include comprehensive 
reviews of both the subject operators' privacy and security policies, 
practices, and representations. The Commission does not propose any 
revisions to Sec.  312.11(b)(1).
2. Reporting and Recordkeeping Requirements (Sec.  312.11(d) and Sec.  
312.11(f))
    Section 312.11(d) of the Rule sets forth requirements for FTC-
approved COPPA Safe Harbor programs to, among other things, submit 
annual reports to the Commission and maintain for not less than three 
years, and make available to the Commission upon request, consumer 
complaints alleging that subject operators violated an FTC-approved 
COPPA Safe Harbor program's guidelines, records of disciplinary actions 
taken against subject operators, and results of the FTC-approved COPPA 
Safe Harbor program's Sec.  312.11(b)(2) assessments.
    Several commenters recommended that the Commission modify the 
reporting and recordkeeping requirements in order to strengthen the 
Commission's oversight of FTC-approved COPPA Safe Harbor programs and 
to make that oversight more transparent. One commenter recommended that 
the Commission require FTC-approved COPPA Safe Harbor programs to 
submit more detailed and frequent reports.\341\ Another suggested that 
the Rule should require such programs to demonstrate on a periodic 
basis that they are regularly assessing and updating their programs to 
comply with COPPA.\342\
---------------------------------------------------------------------------

    \341\ SuperAwesome, at 31.
    \342\ CIPL, at 7.
---------------------------------------------------------------------------

    The Commission agrees with commenters' general recommendation to 
enhance FTC-approved COPPA Safe Harbor programs' reporting requirements 
in order to strengthen oversight. Accordingly, the Commission proposes 
revising Sec.  312.11(d)(1) to require the following additions to the 
FTC-approved COPPA Safe Harbor programs' annual reports.
    First, the Commission proposes requiring FTC-approved COPPA Safe 
Harbor programs to identify each subject operator and all approved 
websites or online services in the program, as well as all subject 
operators that have left the program.\343\ The proposed revision 
further requires an FTC-approved COPPA Safe Harbor program to provide: 
a narrative description of the program's business model, including 
whether it provides additional services to subject operators, such as 
training; copies of each consumer complaint related to each subject 
operator's violation of an FTC-approved COPPA Safe Harbor program's 
guidelines; and a description of the process for determining whether a 
subject operator is subject to discipline (in addition to the existing 
requirement to describe any disciplinary action that the FTC-approved 
COPPA Safe Harbor program took against any

[[Page 2064]]

subject operator). These proposed changes will enhance the Commission's 
ability to oversee FTC-approved COPPA Safe Harbor programs.
---------------------------------------------------------------------------

    \343\ This requirement will additionally allow the Commission to 
monitor whether subject operators are switching FTC-approved COPPA 
Safe Harbor programs for forum shopping purposes as one commenter 
noted. See Representative Kathy Castor, at 2. This concern was also 
raised during the COPPA Workshop, in which an employee of an FTC-
approved COPPA Safe Harbor program noted that ``one of the issues 
that we have with safe harbor right now is the shopping around . . . 
we've lost a few, actually, where we've refused to allow standards 
that we don't think are meeting the requirements of COPPA and our 
program and they've gone elsewhere.'' See C. Quinn, Remarks from the 
State of the World in Children's Privacy Panel at The Future of the 
COPPA Rule: An FTC Workshop 37-38 (Oct. 7, 2019), available at 
https://www.ftc.gov/system/files/documents/public_events/1535372/transcript_of_coppa_workshop_part_1_1.pdf.
---------------------------------------------------------------------------

    Additionally, one FTC-approved COPPA Safe Harbor program 
recommended that the Commission consider conducting audits of each FTC-
approved COPPA Safe Harbor program and publishing an audit checklist 
after completing each audit.\344\ Relatedly, another commenter 
suggested that the Rule should require FTC-approved COPPA Safe Harbor 
programs to demonstrate on a periodic basis that they are regularly 
assessing and updating their programs to comply with COPPA.\345\
---------------------------------------------------------------------------

    \344\ ESRB, at 5. This commenter suggested biennial audits, 
however on balance, the Commission believes that conducting such 
reviews every three years is appropriate.
    \345\ CIPL, at 7.
---------------------------------------------------------------------------

    The Commission agrees that, in addition to its current oversight of 
FTC-approved COPPA Safe Harbor programs, including review of the FTC-
approved COPPA Safe Harbor programs' annual reports discussed in this 
part of the preamble, regular audits of FTC-approved COPPA Safe Harbor 
programs' technological capabilities and mechanisms for assessing 
subject operators' fitness for maintaining membership could further 
strengthen oversight. To that end, the Commission proposes to add a new 
Sec.  312.11(f) requiring FTC-approved COPPA Safe Harbor programs to 
submit triennial reports that provide details about those issues.\346\
---------------------------------------------------------------------------

    \346\ Because the Commission proposes to add a new Sec.  
312.11(f), the Commission also proposes to renumber existing 
Sec. Sec.  312.11(f) and 312.11(g) as 312.11(g) and 312.11(h), 
respectively.
---------------------------------------------------------------------------

    In terms of transparency, several commenters recommended that the 
Commission require programs to publish lists of their certified 
members.\347\ One FTC-approved COPPA Safe Harbor program, however, 
posited that public disclosure of membership lists would lead to the 
``poaching'' of safe harbor members and recommended that the Rule 
require safe harbors instead to provide service-level certification 
information to the FTC confidentially.\348\ Another disagreed that 
public disclosure of membership lists would lead to the stealing of 
members, stating that it has always publicly disclosed the products it 
has certified.\349\ A coalition of consumer groups supported greater 
transparency and argued that FTC-approved COPPA Safe Harbor programs' 
current practices with respect to whether and where subject operators 
display membership seals makes it difficult for parents and others to 
determine whether websites or online services are participants of an 
FTC-approved COPPA Safe Harbor program.\350\
---------------------------------------------------------------------------

    \347\ SuperAwesome, at 31; S. Egelman, at 5; kidSAFE, at 17.
    \348\ ESRB, at 5 (also asserting that there is a lack of 
evidence showing that consumers want access to such lists).
    \349\ kidSAFE, at 17.
    \350\ Joint Consumer Groups, at 19-20.
---------------------------------------------------------------------------

    The Commission proposes requiring that FTC-approved COPPA Safe 
Harbor programs publish lists of their subject operators. While the 
Commission understands certain commenters' concerns that the 
publication of such a list could result in the loss of subject 
operators to other FTC-approved COPPA Safe Harbor programs, the 
Commission believes that such concerns are outweighed by the benefits 
created by increasing transparency around FTC-approved COPPA Safe 
Harbor programs. Therefore, the Commission proposes adding this 
requirement as new paragraph Sec.  312.11(d)(4).
3. Revocation of Approval of Self-Regulatory Program Guidelines 
(Current Sec.  312.11(f), Proposed To Be Renumbered as Sec.  312.11(g))
    Current Sec.  312.11(f), which the Commission proposes to renumber 
as Sec.  312.11(g) in light of the new proposed Sec.  312.11(f), 
reserves the Commission's right to revoke the approval of any FTC-
approved COPPA Safe Harbor program whose guidelines or implementation 
of guidelines do not meet the requirements set forth in the Rule. In 
addition, current Sec.  312.11(f) requires FTC-approved COPPA Safe 
Harbor programs that the Commission had approved before the Commission 
amended the Rule in 2013 to submit by March 1, 2013 proposed 
modifications to bring their guidelines into compliance with the 2013 
Rule amendments.
    Because the March 1, 2013 deadline has passed and is no longer 
relevant, the Commission proposes to strike from renumbered Sec.  
312.11(g) the requirement that FTC-approved COPPA Safe Harbor programs 
submit proposed modifications to their guidelines. If the Commission 
proceeds to modify the Rule as discussed in this notice, the Commission 
will provide an appropriate deadline for safe harbor programs to submit 
proposed modifications to bring their guidelines into compliance with 
such amendments.

I. Voluntary Commission Approval Processes (16 CFR 312.12)

    The Commission also proposes making a few technical edits in Sec.  
312.12(b) to ensure that each reference to the support for the internal 
operations of the website or online service is consistent with the 
COPPA statute's use of the phrase ``support for the internal operations 
of the [website] or online service.'' \351\
---------------------------------------------------------------------------

    \351\ 15 U.S.C. 6501(4).
---------------------------------------------------------------------------

V. Request for Comment

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before March 11, 2024. 
Write ``COPPA Rule Review, Project No. P195404'' on your comment. Your 
comment--including your name and your State--will be placed on the 
public record of this proceeding, including the https://www.regulations.gov website.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://www.regulations.gov, by 
following the instructions on the web-based form.
    If you file your comment on paper, write ``COPPA Rule Review, 
Project No. P195404'' on your comment and on the envelope, and mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex E), 
Washington, DC 20580. If possible, please submit your paper comment to 
the Commission by overnight service.
    Because your comment will be placed on the publicly accessible 
website at https://www.regulations.gov, you are solely responsible for 
making sure that your comment does not include any sensitive or 
confidential information. In particular, your comment should not 
include any sensitive personal information, such as your or anyone 
else's Social Security number; date of birth; driver's license number 
or other State identification number, or foreign country equivalent; 
passport number; financial account number; or credit or debit card 
number. You are also solely responsible for making sure that your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``trade secret or any 
commercial or financial information which . . . is privileged or 
confidential''--as provided by section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in 
particular competitively sensitive information such as costs,

[[Page 2065]]

sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at https://www.regulations.gov--as legally 
required by FTC Rule 4.9(b)--we cannot redact or remove your comment, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website to read this publication and the news release 
describing it, and visit https://www.regulations.gov/docket/FTC-2023-0076 to read a plain-language summary of the proposed Rule. The FTC Act 
and other laws that the Commission administers permit the collection of 
public comments to consider and use in this proceeding as appropriate. 
The Commission will consider all timely and responsive public comments 
that it receives on or before March 11, 2024. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

VI. Paperwork Reduction Act

    The Paperwork Reduction Act (``PRA''), 44 U.S.C. chapter 35, 
requires federal agencies to seek and obtain approval from the Office 
of Management and Budget (``OMB'') before undertaking a collection of 
information directed to ten or more persons.\352\ Under the PRA, a rule 
creates a ``collection of information'' when ten or more persons are 
asked to report, provide, disclose, or record information in response 
to ``identical questions.'' \353\ The existing COPPA Rule contains 
recordkeeping, disclosure, and reporting requirements that constitute 
``information collection requirements'' as defined by 5 CFR 1320.3(c) 
under the OMB regulations that implement the PRA. OMB has approved the 
Rule's existing information collection requirements through March 31, 
2025 (OMB Control No. 3084-0117).
---------------------------------------------------------------------------

    \352\ 44 U.S.C. 3502(3)(A)(i).
    \353\ See 44 U.S.C. 3502(3)(A).
---------------------------------------------------------------------------

    The proposed amendments to the COPPA Rule would amend the 
definition of ``website or online service directed to children,'' 
potentially increasing the number of operators subject to the Rule, 
albeit likely not to a significant degree. The proposed Rule would also 
increase disclosure obligations for operators and FTC-approved COPPA 
Safe Harbor programs, and FTC-approved COPPA Safe Harbor programs would 
also face additional reporting obligations under the proposed Rule. 
Commission staff does not believe that the proposed Rule would increase 
operators' recordkeeping obligations.
    The Commission invites comments on: (1) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the FTC, including whether the information will have 
practical utility; (2) the accuracy of the FTC's estimate of the burden 
of the proposed collection of information; (3) ways to enhance the 
quality, utility, and clarity of the information to be collected; and 
(4) ways to minimize the burden of collecting information on those who 
respond. Written comments and recommendations for the proposed 
information collection should also be sent within 30 days of 
publication of this document to https://www.reginfo.gov/public/do/PRAMain. Find this particular information collection by selecting 
``Currently under Review--Open for Public Comments'' or by using the 
search function. The reginfo.gov web link is a United States Government 
website produced by OMB and the General Services Administration. Under 
PRA requirements, OMB's Office of Information and Regulatory Affairs 
reviews federal information collections.

Estimated Additional Annual Hours Burden

A. Number of Respondents

    As noted in the Regulatory Flexibility section of this NPRM, 
Commission staff estimates that there are currently approximately 5,710 
operators subject to the Rule. Commission staff believes that the 
changes that are most likely to affect the number of operators subject 
to the Rule are the Commission's proposed changes to the Rule's 
definition of ``website or online service directed to children.'' Of 
most relevance to this discussion, the Commission proposes to modify 
paragraph 2 of this definition to account for third parties with actual 
knowledge that they collect children's information from users of a 
child-directed site or service, even if such third parties do not 
collect the information directly from such users. While Commission 
staff contemplates that this modification could increase the number of 
operators subject to the Rule's requirements, staff does not have 
sufficient evidence to estimate the amount of increase, and therefore 
the Commission welcomes comment on this issue. Commission staff does 
not expect that the other proposed modifications to this definition, 
such as the additional exemplar factors the Commission will consider in 
determining whether a site or service is child-directed, will alter the 
number of operators subject to the Rule.
    Commission staff does not believe that other proposed modifications 
to the Rule's definitions will affect the number of operators subject 
to the Rule. For example, Commission staff does not expect that the 
Commission's proposed addition of ``biometric identifiers'' to the 
Rule's definition of ``personal information'' will significantly alter 
the number of operators subject to the Rule. Commission staff believes 
that all or nearly all operators of websites or online services that 
collect ``biometric identifiers'' from children are already subject to 
the Rule.
    In total, to the extent that any of the Commission's proposed 
revisions to the Rule's definitions might result in minor additional 
numbers of operators being subject to the Rule, Commission staff 
believes that any such increase will be offset by other operators of 
websites or online services adjusting their information collection 
practices so that they will not be subject to the Rule.
    For this burden analysis, Commission staff retains its recently 
published estimate of 280 new operators per year.\354\ Commission staff 
also retains its estimate that no more than one additional FTC-approved 
COPPA Safe Harbor program applicant is likely to submit a request 
within the next three years of PRA clearance.
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    \354\ See 2022 COPPA PRA Supporting Statement, available at 
https://omb.report/icr/202112-3084-002/doc/119087900 (hereinafter, 
``2022 COPPA PRA Supporting Statement'').
---------------------------------------------------------------------------

B. Recordkeeping Hours

    While the proposed Rule requires operators to establish, implement, 
and maintain a written comprehensive security program and data 
retention policy, such requirements do not constitute a ``collection of 
information'' under the PRA. Namely, under the proposed Rule, each 
operator's security

[[Page 2066]]

program and the safeguards instituted under such program will vary 
according to the operator's size and complexity, the nature and scope 
of its activities, and the sensitivity of the information involved. 
Similarly, the instituted data retention policy will differ depending 
on the operator's business practices. Thus, although each operator must 
summarize its compliance efforts in one or more written documents, the 
discretionary balancing of factors and circumstances that the proposed 
Rule allows does not require entities to answer ``identical questions'' 
and therefore does not trigger the PRA's requirements.
    Separately, the proposed Rule imposes minimal recordkeeping 
requirements for FTC-approved COPPA Safe Harbor programs. However, FTC 
staff understands that most of the records listed in the COPPA Rule's 
safe harbor recordkeeping provisions consist of documentation that 
covered entities retain in the ordinary course of business irrespective 
of the COPPA Rule. OMB excludes from the definition of PRA burden, 
among other things, recordkeeping requirements that customarily would 
be undertaken independently in the normal course of business.\355\ In 
staff's view, any incremental burden posed by the proposed Rule--such 
as that to include additional content in annual reports, submit a 
report to the Commission every three years detailing technological 
capabilities and mechanisms, and publicly post membership lists--would 
be marginal.
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    \355\ See 5 CFR 1320.3(b)(2).
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C. Disclosure Hours
1. New Operators' Disclosure Burden
    FTC staff estimates that the Rule affects approximately 280 new 
operators per year.\356\ Staff maintains its longstanding estimate that 
new operators of websites and online services will require, on average, 
approximately 60 hours to draft a privacy policy, design mechanisms to 
provide the required online privacy notice and, where applicable, the 
direct notice to parents.\357\ In addition, the proposed Rule includes 
a new requirement that operators establish, implement, maintain, and 
disclose a data retention policy. Staff estimates it will require, on 
average, approximately 10 hours to meet the data retention policy 
requirement. In combining these figures, Commission staff estimates 
that these disclosure requirements will require 70 hours of burden per 
operator. This yields an estimated annual hours burden of 19,600 hours 
(280 respondents x 70 hours).
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    \356\ This consists of certain traditional website operators, 
mobile app developers, plug-in developers, and advertising networks.
    \357\ See, e.g., Children's Online Privacy Protection Rule, 
Notice, 86 FR 55609 (Oct. 6, 2021), available at https://www.govinfo.gov/content/pkg/FR-2021-10-06/pdf/2021-21753.pdf; 2022 
COPPA PRA Supporting Statement.
---------------------------------------------------------------------------

2. Existing Operators' Disclosure Burden
    The proposed Rule imposes various new disclosure requirements on 
operators. Specifically, the proposed amendments require operators to 
update existing disclosures, namely to update the direct and online 
notices with additional information about the operators' information 
practices. Additionally, some operators may have to provide disclosures 
that were not previously required under the Rule. For operators 
utilizing the support for the internal operations exception, 16 CFR 
312.5(c)(7), the proposed Rule will now require such operators to 
provide an online notice. Similarly, the proposed Rule will require 
operators utilizing the proposed school authorization exception, which 
is newly numbered as 16 CFR 312.5(c)(10), to provide an online notice, 
a direct notice to the school, and enter into a written agreement with 
the school. Additionally, the proposed Rule requires operators to 
disclose a data retention policy.
    Commission staff believes that an existing operator's time to make 
these changes to its online and direct notices would be no more than 
that estimated for a new entrant to craft an online notice and direct 
notice for the first time, i.e., 60 hours. Regarding the written 
agreement, FTC staff understands that many ed tech operators enter into 
standard contracts with schools, school districts, and other education 
organizations across the country, and this requirement is not intended 
to interfere with such contractual arrangements. Therefore, this 
agreement likely consists of documentation that covered entities retain 
in the ordinary course of business irrespective of the COPPA Rule. As 
noted above, OMB excludes from the definition of PRA burden, among 
other things, recordkeeping requirements that customarily would be 
undertaken independently in the normal course of business.\358\ 
Additionally, as discussed previously, Commission staff believes the 
time necessary to develop, draft, and publish a data retention policy 
is approximately 10 hours. Therefore, these disclosure requirements 
will amount to approximately 70 hours of burden. Annualized over three 
years of PRA clearance, this amounts to approximately 23 hours (70 
hours / 3 years) per operator each year. Aggregated for the 5,710 
existing operators, the annualized disclosure burden for these 
requirements would be approximately 131,330 hours per year (5,710 
respondents x 23 hours).
---------------------------------------------------------------------------

    \358\ See 5 CFR 1320.3(b)(2).
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    The proposed Rule will also require each FTC-approved COPPA Safe 
Harbor program to provide a list of all current subject operators on 
each of the FTC-approved COPPA Safe Harbor program's websites and 
online services, and the proposed Rule further requires that such list 
be updated every six months thereafter. Because FTC-approved COPPA Safe 
Harbor programs likely already keep up-to-date lists of their subject 
operators, Commission staff does not anticipate this requirement will 
significantly burden FTC-approved COPPA Safe Harbor programs. To 
account for time necessary to prepare the list for publication and to 
ensure that the list is updated every 6 months, Commission staff 
estimates 10 hours per year. Aggregated for one new FTC-approved COPPA 
Safe Harbor program and six existing FTC-approved COPPA Safe Harbor 
programs, this amounts to an estimated cumulative disclosure burden of 
70 hours per year (7 respondents x 10 hours).

D. Reporting Hours

    The proposed amendments will require FTC-approved COPPA Safe Harbor 
programs to include additional content in their annual reports. The 
proposed amendments will also require each FTC-approved COPPA Safe 
Harbor program to submit a report to the Commission every three years 
detailing the program's technological capabilities and mechanisms for 
assessing subject operators' fitness for membership in the program.
    The burden of conducting subject operator audits and preparing the 
annual reports likely varies by FTC-approved COPPA Safe Harbor program, 
depending on the number of subject operators. Commission staff 
estimates that the additional reporting requirements for the annual 
report will require approximately 50 hours per program per year. 
Aggregated for one new FTC-approved COPPA Safe Harbor program (50 
hours) and six existing (300 hours) FTC-approved COPPA Safe Harbor 
programs, this amounts to an estimated cumulative reporting burden of 
350 hours per year (7 respondents x 50 hours).
    Regarding the reports that the proposed Rule will require FTC-
approved Safe Harbor programs to

[[Page 2067]]

submit to the Commission every three years, Sec.  312.11(c)(1) of the 
Rule already requires FTC-approved COPPA Safe Harbor programs to 
include similar information in their initial application to the 
Commission. Specifically, Sec.  312.11(c)(1) requires that the 
application address FTC-approved COPPA Safe Harbor programs' business 
models and the technological capabilities and mechanisms they will use 
for initial and continuing assessment of operators' fitness for 
membership in their programs. Consequently, the three-year reports 
should merely require reviewing and potentially updating an already-
existing report. Staff estimates that reviewing and updating existing 
information to comply with proposed Sec.  312.11(f) will require 
approximately 10 hours per FTC-approved COPPA Safe Harbor program. 
Divided over the three-year period, FTC staff estimates that annualized 
burden attributable to this requirement would be approximately 3.33 
hours per year (10 hours / 3 years) per FTC-approved COPPA Safe Harbor 
program, which staff will round up to 4 hours per year per FTC-approved 
COPPA Safe Harbor program. Given that several FTC-approved COPPA Safe 
Harbor programs are already available to website and online service 
operators, FTC staff anticipates that no more than one additional FTC-
approved COPPA Safe Harbor program applicant is likely to submit a 
request within the next three years of PRA clearance. Aggregated for 
one new FTC-approved COPPA Safe Harbor program and six existing FTC-
approved COPPA Safe Harbor programs, this amounts to an estimated 
cumulative reporting burden of 28 hours per year (7 respondents x 4 
hours).

E. Labor Costs

1. Disclosure
a. New Operators
    As previously noted, Commission staff estimates a total annual 
burden of 19,600 hours (280 respondents x 70 hours). Consistent with 
its past estimates and based on its 2013 rulemaking record,\359\ FTC 
staff estimates that the time spent on compliance for new operators 
covered by the COPPA Rule would be apportioned five to one between 
legal (outside counsel lawyers or similar professionals) and technical 
(e.g., computer programmers, software developers, and information 
security analysts) personnel. Therefore, Commission staff estimates 
that approximately 16,333 of the estimated 19,600 hours required will 
be completed by legal staff.
---------------------------------------------------------------------------

    \359\ See, e.g., 78 FR 3972 at 4007; 2022 COPPA PRA Supporting 
Statement.
---------------------------------------------------------------------------

    Regarding legal personnel, Commission staff anticipates that the 
workload among law firm partners and associates for assisting with 
COPPA compliance would be distributed among attorneys at varying levels 
of seniority. Assuming two-thirds of such work is done by junior 
associates at a rate of approximately $300 per hour, and one-third by 
senior partners at approximately $600 per hour, the weighted average of 
outside counsel costs would be approximately $400 per hour.\360\
---------------------------------------------------------------------------

    \360\ These estimates are drawn from the ``Laffey Matrix.'' The 
Laffey Matrix is a fee schedule used by many United States courts 
for determining the reasonable hourly rates in the District of 
Columbia for attorneys' fee awards under federal fee-shifting 
statutes. It is used here as a proxy for market rates for litigation 
counsel in the Washington, DC area. For 2020-2021, rates in the 
table range from $333 per hour for most junior associates to $665 
per hour for the most senior partners. See Laffey Matrix, Civil 
Division of the United States Attorney's Office for the District of 
Columbia, United States Attorney's Office, District of Columbia, 
Laffey Matrix B 2015-2021, available at https://www.justice.gov/usao-dc/page/file/1305941/download.
---------------------------------------------------------------------------

    FTC staff anticipates that computer programmers responsible for 
posting privacy policies and implementing direct notices and parental 
consent mechanisms would account for the remaining approximately 3,267 
hours. FTC staff estimates an hourly wage of $57 (rounded to the 
nearest dollar) for technical assistance, based on Bureau of Labor 
Statistics (``BLS'') data.\361\ Accordingly, associated annual labor 
costs would be $6,719,419 [(16,333 hours x $400/hour) + (3,267 hours x 
$57/hour)] for the estimated 280 new operators.
---------------------------------------------------------------------------

    \361\ The estimated mean hourly wage for technical labor support 
($57) is based on an average of the mean hourly wage for computer 
programmers, software developers, and information security analysts 
as reported by the Bureau of Labor Statistics. See Occupational 
Employment and Wages--May 2022, Table 1 (National employment and 
wage data from the Occupational Employment and Wage Statistics 
survey by occupation, May 2022), available at https://www.bls.gov/news.release/ocwage.t01.htm (hereinafter, ``BLS Table 1'').
---------------------------------------------------------------------------

b. Existing Operators
    As previously discussed, Commission staff estimates that the 
annualized disclosure burden for these requirements for the 5,710 
existing operators would be 131,330 hours per year. Thus, apportioned 
five to one, this amounts to 109,442 hours of legal and 21,888 hours of 
technical assistance. Applying hourly rates of $400 and $57, 
respectively, for these personnel categories, associated labor costs 
would total approximately $45,024,416 ($43,776,800 + $1,247,616).
    As noted, Commission staff estimates a cumulative disclosure burden 
of 10 hours per year for FTC-approved COPPA Safe Harbor programs. 
Aggregated for one new FTC-approved COPPA Safe Harbor program and six 
existing FTC-approved COPPA Safe Harbor programs, this amounts to an 
estimated cumulative reporting burden of 70 hours per year (7 
respondents x 10 hours).
    Industry sources have advised that the labor to comply with 
requirements from FTC-approved COPPA Safe Harbor programs would be 
attributable to the efforts of in-house lawyers. To determine in-house 
legal costs, FTC staff applied an approximate average between the BLS 
reported mean hourly wage for lawyers ($78.74),\362\ and estimated in-
house hourly attorney rates ($300) that are likely to reflect the costs 
associated with the proposed Rule's safe harbor requirements. This 
yields an approximate hourly rate of $190. Applying this hourly labor 
cost estimate to the hours burden associated with the cumulative 
disclosure burden for FTC-approved COPPA Safe Harbor programs yields an 
estimated annual burden of $13,300 (70 hours x $190).
---------------------------------------------------------------------------

    \362\ See BLS Table 1 (lawyers).
---------------------------------------------------------------------------

2. Reporting
    As previously noted, Commission staff estimates an estimated 
cumulative reporting burden of 378 hours per year for FTC-approved 
COPPA Safe Harbor programs. The approximate hourly rate for labor to 
comply with requirements from FTC-approved COPPA Safe Harbor programs 
is $190, as previously calculated. Applying this hourly labor cost 
estimate to the hours burden associated with the cumulative reporting 
burden for FTC-approved COPPA Safe Harbor programs yields an estimated 
annual labor cost burden of $71,820 (378 hours x $190).

F. Non-Labor/Capital Costs

    Because both operators and FTC-approved COPPA Safe Harbor programs 
will already be equipped with the computer equipment and software 
necessary to comply with the Rule's notice requirements, the proposed 
Rule should not impose any additional capital or other non-labor costs.

VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires an 
agency to either provide an Initial Regulatory

[[Page 2068]]

Flexibility Analysis (``IRFA'') with a proposed rule, or certify that 
the proposed Rule will not have a significant impact on a substantial 
number of small entities.\363\
---------------------------------------------------------------------------

    \363\ 5 U.S.C. 603-605.
---------------------------------------------------------------------------

    The Commission does not expect that the proposed Rule, if adopted, 
would have a significant impact on a substantial number of small 
entities. Among other things, as discussed further below, many of the 
proposed amendments reflect modest changes to the Rule, including to 
clarify definitions, increase content requirements for existing 
notices, increase specificity for existing security requirements, 
increase clarity on existing retention and deletion requirements, and 
increase specificity on certain reporting requirements. While the 
proposed amendments may require some entities to implement notices they 
were not required to provide before, obtain consent they previously 
were not required to obtain, and implement new retention policies, the 
Commission does not anticipate this will require significant additional 
costs to entities covered by the Rule. Instead, some of the proposed 
amendments, such as amendments to create exceptions for the Rule's 
verifiable parental consent requirements, may even reduce costs for 
many entities covered by the Rule.
    Although the Commission certifies under the RFA that the proposed 
rule will not have a significant impact on a substantial number of 
small entities, and hereby provides notice of that certification to the 
Small Business Administration, the Commission has determined that it is 
appropriate to publish an IRFA in order to inquire into the impact of 
the proposed Rule on small entities. The Commission invites comment on 
the burden on any small entities that would be covered and has prepared 
the following analysis.

A. Reasons for the Proposed Rule

    As discussed in Part I, the Commission commenced a review of the 
COPPA Rule on July 25, 2019, noting that questions had arisen about the 
Rule's application to the ed tech sector, voice-enabled connected 
devices, and general audience platforms that host third-party child-
directed content. After review of the comments received, the Commission 
concludes that there is a need to update certain Rule provisions to 
account for changes in technology and online practices, and where 
appropriate, to clarify and streamline the Rule. Accordingly, the 
Commission proposes modifications to the Rule in the following areas: 
Scope of Regulations; Definitions; Notice; Parental Consent; Parental 
Right to Review; Confidentiality and Security of Children's Personal 
Information; Data Retention and Deletion; Safe Harbor Programs; and 
Voluntary Commission Approval Processes.

B. Statement of Objectives and Legal Basis

    The objectives of the Proposed Rule are to update the Rule to 
ensure that children's online privacy continues to be protected, as 
directed by Congress, even as new online technologies emerge and 
existing online technologies evolve, and to clarify existing 
obligations for operators under the Rule. The legal basis for the 
proposed Rule is the Children's Online Privacy Protection Act, 15 
U.S.C. 6501 et seq.

C. Description and Estimated Number of Small Entities to Which the Rule 
Will Apply

    The COPPA Rule applies to operators of commercial websites or 
online services directed to children that collect personal information 
through such websites or online services, and operators of any 
commercial website or online service with actual knowledge that it is 
collecting personal information from children. The Rule also applies to 
operators of websites or online services that have actual knowledge 
that they are collecting personal information directly from users of 
another website or online service directed to children.
    The Commission staff is unaware of any empirical evidence 
concerning the number of operators subject to the Rule. However, based 
on the previous estimates \364\ and the Commission's compliance 
monitoring efforts in the areas of children's privacy, Commission staff 
estimates that approximately 5,710 operators may be subject to the 
Rule's requirements, with approximately 280 new operators per year.
---------------------------------------------------------------------------

    \364\ See, e.g., 78 FR 3972 at 4000.
---------------------------------------------------------------------------

    Under the Small Business Size Standards issued by the Small 
Business Administration, ``web search portals and all other information 
services'' qualify as small businesses if they have 1,000 or fewer 
employees.\365\ Commission staff estimates that approximately 80% of 
operators potentially subject to the Rule qualify as small entities. 
The Commission staff bases this estimate on its experience in this 
area, which includes its law enforcement activities, oversight of FTC-
approved COPPA Safe Harbor programs, conducting relevant workshops, and 
discussions with industry and privacy professionals. The Commission 
seeks comment and information with regard to the estimated number or 
nature of small business entities on which the proposed Rule would have 
a significant economic impact.
---------------------------------------------------------------------------

    \365\ See U.S. Small Business Administration Table of Small 
Business Size Standards Matched to North American Industry 
Classification System Codes, available at https://www.sba.gov/sites/sbagov/files/2023-03/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281%29%20%281%29_0.pdf.
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D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The proposed amended Rule would impose reporting, recordkeeping, 
and other compliance requirements within the meaning of the PRA, as set 
forth in Part VI of this NPRM. Therefore, the Commission is submitting 
the proposed requirements to OMB for review before issuing a final 
rule.
    For example, while not constituting a ``collection of information'' 
under the PRA, the proposed Rule would require operators to establish, 
implement, and maintain a written comprehensive security program. The 
proposed Rule would also likely increase the disclosure requirements 
for covered operators, and it would likely increase the disclosure and 
reporting requirements for FTC-approved COPPA Safe Harbor programs. 
Specifically, the proposed amendments require operators to update 
existing disclosures with additional content requirements, namely to 
update the direct and online notices with additional information about 
the operators' information practices. Some operators may have to 
provide disclosures that were not previously required under the Rule. 
Additionally, the proposed Rule requires operators to disclose a data 
retention policy.
    The proposed Rule will also require each FTC-approved COPPA Safe 
Harbor program to provide a list of all current subject operators on 
each of the FTC-approved COPPA Safe Harbor program's websites and 
online services, and the proposed Rule further requires that such list 
be updated every six months thereafter. The proposed amendments will 
also require FTC-approved COPPA Safe Harbor programs to include 
additional content in their annual reports, and submit a new report to 
the Commission every three years detailing the program's technological 
capabilities and mechanisms for assessing subject operators' fitness 
for membership in the program.
    The estimated burden imposed by these proposed amendments is 
discussed in the PRA section of this document, and there should be no

[[Page 2069]]

difference in that burden as applied to small businesses. While the 
Rule's compliance obligations apply equally to all entities subject to 
the Rule, it is unclear whether the economic burden on small entities 
will be the same as or greater than the burden on other entities. That 
determination would depend upon a particular entity's compliance costs, 
some of which may be largely fixed for all entities (e.g., website 
programming) and others variable (e.g., participation in an FTC-
approved COPPA Safe Harbor program), and the entity's income or profit 
from operation of the website or online service itself (e.g., 
membership fees) or related sources. As explained in the PRA section, 
in order to comply with the proposed Rule's requirements, website or 
online service operators will require the professional skills of legal 
(lawyers or similar professionals) and technical (e.g., computer 
programmers, software developers, and information security analysts) 
personnel.
    As explained in the PRA section, Commission staff estimates that 
there are approximately 5,710 websites or online services that qualify 
as operators under the proposed Rule, and that approximately 80% of 
such operators qualify as small entities under the SBA's Small Business 
Size standards. The Commission invites comment and information on these 
issues.

E. Identification of Duplicative, Overlapping, or Conflicting Federal 
Rules

    The Commission has not identified any other federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
proposed Rule. While the proposed Rule includes amendments related to 
schools, the Commission believes it has drafted the proposed Rule to 
ensure it does not duplicate, overlap, or conflict with the Family 
Educational Rights and Privacy Act. The Commission invites comment and 
information on this issue.

F. Discussion of Significant Alternatives

    In drafting the proposed Rule, the Commission has made every effort 
to avoid unduly burdensome requirements for entities. The Commission 
believes that the proposed amendments are necessary to continue to 
protect children's online privacy in accordance with the purposes of 
COPPA. For each of the proposed amendments, the Commission has 
attempted to tailor the provision to any concerns evidenced by the 
record to date. On balance, the Commission believes that the benefits 
to children and their parents outweigh any potential increased costs of 
implementation to industry.
    For example, some commenters called for the Commission to implement 
specific time limits on data retention, noting that operators could 
read the Rule as currently written to allow indefinite retention of 
personal information. Rather than impose specific limitations that 
would apply to operators that collect different types of personal 
information for varying types of activities, the Commission 
alternatively proposes to require operators to establish a written data 
retention policy that sets forth a timeframe for deletion and 
explicitly prohibits indefinite retention.
    Additionally, the Commission has taken care in developing the 
proposed amendments to set performance standards that will establish 
the objective results that must be achieved by regulated entities, but 
do not mandate a particular technology that must be employed in 
achieving these objectives. For example, the proposed Rule does not 
mandate the technology that must be used to establish, implement, and 
maintain the children's written information security program and 
related safeguards required under newly-numbered Sec.  312.8(b).
    The Commission seeks comments on ways in which the proposed Rule 
could be modified to reduce any costs or benefits for small entities.

VIII. Communications by Outside Parties to the Commissioners or Their 
Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding, from any 
outside party to any Commissioner or Commissioner's advisor, will be 
placed on the public record. See 16 CFR 1.26(b)(5).

IX. Questions for the Proposed Revisions to the Rule

    The Commission is seeking comment on various aspects of the 
proposed Rule and is particularly interested in receiving comment on 
the questions that follow. These questions are designed to assist the 
public and should not be construed as a limitation on the issues on 
which public comment may be submitted. Responses to these questions 
should cite the numbers and subsections of the questions being 
answered. For all comments submitted, please submit any relevant data, 
statistics, or any other evidence, upon which those comments are based.

General Question

    1. Please provide comment on any or all of the provisions in the 
proposed Rule. For each provision commented on, please describe: (1) 
the impact of the provision(s) (including any benefits and costs), if 
any; and (2) what alternatives, if any, the Commission should consider, 
as well as the costs and benefits of those alternatives.

Definitions

    2. As part of the Rule review that led to the 2013 Amendments, the 
Commission determined that an operator will not be deemed to have 
``collected'' (as that term is defined in the Rule) personal 
information from a child when it employs technologies reasonably 
designed to delete all or virtually all personal information input by 
children before making information publicly available.\366\ The 
Commission is concerned that, if automatic moderation or filtering 
technologies can be circumvented, reliance on such technologies may not 
be appropriate in a context where a child is communicating one to one 
with another person privately, as opposed to posting information online 
publicly. Should the Commission retain its position that an operator 
will not be deemed to have ``collected'' personal information, and 
therefore does not have to comply with the Rule's requirements, if it 
employs automated means to delete all or virtually all personal 
information from one-to-one communications?
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    \366\ 76 FR 59804 at 59808.
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    3. The Commission proposes to include mobile telephone numbers 
within the definition of ``online contact information'' so long as such 
information is used only to send text messages. This proposed 
modification would permit operators to send text messages to parents to 
initiate obtaining verifiable parental consent. Does allowing operators 
to contact parents through a text message to obtain verifiable parental 
consent present security risks to the recipient of the text message, 
particularly if the parent would need to click on a link provided in 
the text message?
    4. In conjunction with the 2013 Amendments, the Commission 
acknowledged that screen and user names have increasingly become 
portable across multiple websites or online services, and that such 
identifiers permit the direct contact of a specific individual 
online.\367\ Through the 2013 Amendments, the Commission defined 
personal information to include screen or user names only to the extent 
these

[[Page 2070]]

identifiers function in the same way as ``online contact information'' 
as the Rule defines that term. Since 2013, the use of screen and user 
names has proliferated across websites and online services, including 
on online gaming platforms that allow users to directly engage with 
each other. The Commission is concerned that children may use the same 
screen or user name on different sites and services, potentially 
allowing other users to contact and engage in direct communications 
with children on another online service.
---------------------------------------------------------------------------

    \367\ 76 FR 59804 at 59810.
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    a. Should screen or user names be treated as online contact 
information, even if the screen or user name does not allow one user to 
contact another user through the operator's website or online service, 
when the screen or user name could enable one user to contact another 
by assuming that the user to be contacted is using the same screen or 
user name on another website or online service that does allow such 
contact?
    b. Are there measures an operator can take to ensure that a screen 
or user name cannot be used to permit the direct contact of a person 
online?
    5. The Commission proposes adding biometric identifiers such as 
fingerprints, retina and iris patterns, a DNA sequence, and data 
derived from voice data, gait data, or facial data to the definition of 
``personal information.'' Should the Commission consider including any 
additional biometric identifier examples to this definition? Are there 
exceptions to the Rule's requirements that the Commission should 
consider applying to biometric data, such as exceptions for biometric 
data that has been promptly deleted?
    6. The use of avatars generated from a child's image has become 
popular in online services, such as video games. Should an avatar 
generated from a child's image constitute ``personal information'' 
under the COPPA Rule even if the photograph of the child is not itself 
uploaded to the site or service and no other personal information is 
collected from the child? If so, are these avatars sufficiently covered 
under the current COPPA Rule, or are further modifications to the 
definition required to cover avatars generated from a child's image?
    7. The definition of ``personal information'' includes a Social 
Security number. Should the Commission revise this definition to list 
other government-issued identifiers specifically? If so, what type of 
identifiers should be included?
    8. The definition of ``personal information'' includes 
``information concerning the child or the parents of that child that 
the operator collects online from the child and combines with an 
identifier described in [the Rule's definition of `personal 
information'].'' Does the phrase ``concerning the child or parents of 
that child'' require further clarification?
    9. Certain commenters recommended modifications to the ``support 
for the internal operations of the website or online service'' 
definition, including to limit personalization to ``user-driven'' 
actions and to exclude methods designed to maximize user engagement. 
Under what circumstances would personalization be considered ``user-
driven'' versus personalization driven by an operator? How do operators 
use persistent identifiers, as defined by the COPPA Rule, to maximize 
user engagement with a website or online service?
    10. Operators can collect persistent identifiers for contextual 
advertising purposes without parental consent so long as they do not 
also collect other personal information. Given the sophistication of 
contextual advertising today, including that personal information 
collected from users may be used to enable companies to target even 
contextual advertising to some extent, should the Commission consider 
changes to the Rule's treatment of contextual advertising?
    11. With regard to the definition of ``website or online service 
directed to children,'' the Commission would like to obtain additional 
comment on whether it should provide an exemption for operators from 
being deemed a child-directed website or online service if such 
operators undertake an analysis of their audience composition and 
determine no more than a specific percentage of its users are likely to 
be children under 13.
    a. Should the COPPA Rule offer an exemption or other incentive to 
encourage operators to conduct an analysis of their user bases?
    b. If the COPPA Rule should include such an exemption or other 
incentive, what are the reliable means by which operators can determine 
the likely ages of their sites' or services' users?
    c. As part of this exemption or incentive, should the COPPA Rule 
identify which means operators must utilize to determine the likely 
ages of their users? If so, how should the COPPA Rule identify such 
means?
    d. If the COPPA Rule should include such an exemption or other 
incentive, what should be the appropriate percentage of users to 
qualify for this exemption or incentive?
    e. Would such an exemption be inconsistent with the COPPA Rule's 
multi-factor test for determining whether a website or online service, 
or a portion thereof, is directed to children?

Notice

    12. The Commission proposes requiring operators that share personal 
information with third parties to identify those third parties or 
specific categories of those third parties in the direct notice to the 
parent. Is this information better positioned in the direct notice 
required under Sec.  312.4(c), or should it be placed in the online 
notice required under Sec.  312.4(d)?

Parental Consent

    13. Can platforms play a role in establishing consent mechanisms to 
enable app developers or other websites or online services to obtain 
verifiable parental consent? If so, what benefits would a platform-
based common consent mechanism offer operators and parents? What steps 
can the Commission take to encourage the development of platform-based 
consent mechanisms?
    14. To effectuate Sec.  312.5(a)(2), which requires operators to 
give the parent the option to consent to the collection and use of the 
child's personal information without consenting to disclosure of the 
child's personal information to third parties, the Commission proposes 
requiring operators to obtain separate verifiable parental consent 
prior to disclosing a child's personal information, unless such 
disclosure is integral to the nature of the website or online service. 
Should the Commission implement such a requirement? Should the consent 
mechanism for disclosure be offered at a different time and/or place 
than the mechanism for the underlying collection and use? Is the 
exception for disclosures that are integral to the nature of the 
website or online service clear, or should the Commission clarify which 
disclosures are integral? Should the Rule require operators to state 
which disclosures are integral to the nature of website or online 
service?
    15. As noted in Part IV.C.3.c., the Commission proposes to modify 
Sec.  312.5(c)(4) to prohibit operators from utilizing this exception 
to encourage or prompt use of a website or online service. Are there 
other engagement techniques the Rule should address? If so, what 
section of the Rule should address them? What types of personal 
information do operators use when utilizing engagement techniques? 
Additionally, should the Rule differentiate between techniques used 
solely to promote a child's engagement

[[Page 2071]]

with the website or online service and those techniques that provide 
other functions, such as to personalize the child's experience on the 
website or online service? If so, how should the Rule differentiate 
between those techniques?
    16. The Commission proposes to include a parental consent exception 
to permit schools, State educational agencies, and local educational 
agencies to authorize the collection, use, and disclosure of personal 
information from students younger than 13 where the data is used for a 
school-authorized education purpose and no other commercial purpose. 
What types of services should be covered under a ``school-authorized 
education purpose''? For example, should this include services used to 
conduct activities not directly related to teaching, such as services 
used to ensure the safety of students or schools?

Prohibition Against Conditioning a Child's Participation on Collection 
of Personal Information

    17. COPPA and Sec.  312.7 of the Rule prohibit operators from 
conditioning a child's participation in an activity on disclosing more 
personal information than is reasonably necessary to participate in 
such activity.
    a. What efforts are operators taking to comply with Sec.  312.7? 
Are these efforts taken on a website-wide or online service-wide basis, 
or are operators imposing efforts on a more granular level?
    b. Should the Commission specify whether disclosures for particular 
purposes are reasonably necessary or not reasonably necessary in a 
particular context? If so, for which purposes and in which contexts?
    c. Given that operators must provide notice and seek verifiable 
parental consent before collecting personal information, to what extent 
should the Commission consider the information practices disclosed to 
the parent in assessing whether information collection is reasonably 
necessary?
    18. The Commission is considering adding new language to address 
the meaning of ``activity,'' as that term is used in Sec.  312.7. 
Specifically, the Commission is considering including language in Sec.  
312.7 to provide that an ``activity'' means ``any activity offered by a 
website or online service, whether that activity is a subset or 
component of the website or online service or is the entirety of the 
website or online service.'' Should the Commission make this 
modification to the Rule? Is this modification necessary in light of 
the breadth of the plain meaning of the term ``activity''?

Safe Harbor

    19. What types of conflicts would affect an FTC-approved COPPA Safe 
Harbor program from effectively assessing a subject operator's fitness 
for membership in the FTC-approved COPPA Safe Harbor program? What 
policies do FTC-approved COPPA Safe Harbor programs have in place to 
prevent such conflicts?

Effective Date

    20. As part of the issuance of the initial Rule and the 2013 
Amendments, the Commission stated that the Rule and amended Rule, 
respectively, would become effective approximately six months after 
issuance of the Commission's final rule in the Federal Register. The 
Commission requests comment on whether such timeframe is appropriate 
for the modifications set forth during this Rule review that do not 
specify an effective date.

List of Subjects in 16 CFR Part 312

    Communications, Computer technology, Consumer protection, Infants 
and children, internet, Privacy, Reporting and recordkeeping 
requirements, Safety, Science and technology, Trade practices, Youth.

    Accordingly, the Federal Trade Commission proposes to amend 16 CFR 
312 as follows:

PART 312--CHILDREN'S ONLINE PRIVACY PROTECTION RULE

0
1. The authority for part 312 continues to read:

    Authority:  15 U.S.C. 6501 through 6508.

0
2. Revise Sec.  312.1 to read as follows:


Sec.  312.1  Scope of regulations in this part.

    This part implements the Children's Online Privacy Protection Act 
of 1998 (15 U.S.C. 6501, et seq.), which prohibits unfair or deceptive 
acts or practices in connection with the collection, use, and/or 
disclosure of personal information from and about children on the 
internet.
0
3. In Sec.  312.2:
0
a. Revise the definition of Disclose or disclosure;
0
b. Add in alphabetical order a definition for Mixed audience website or 
online service;
0
c. Revise the definition of Online contact information;
0
d. Revise the introductory text and paragraph (2) of the definition of 
Operator;
0
e. Republish the introductory text, revise paragraphs (7) and (9), 
redesignate paragraph (10) as paragraph (11), and add a new paragraph 
(10) to the definition of Personal information;
0
f. Add in alphabetical order definitions for School and School-
authorized education purpose;
0
g. Remove the words ``Web Site'' and add in their place the word ``Web 
site'' in the term Support for the internal operations of the website 
or online service and in the definition, republish paragraph (1) 
introductory text and revise paragraphs (1)(i), (iii), (iv), (v), and 
(vii) and (2);
0
h. Revise the definition of Third party; and
0
i. Remove the definition of Web site or online service directed to 
children and add inits place in alphabetical order a definition for 
Website or online service directed to children.
    The additions, republications, and revisions read as follows:


Sec.  312.2  Definitions.

* * * * *
    Disclose or disclosure means, with respect to personal information:
    (1) The release of personal information collected by an operator 
from a child in identifiable form for any purpose, except where an 
operator provides such information to a person who provides support for 
the internal operations of the website or online service; and
    (2) Making personal information collected by an operator from a 
child publicly available in identifiable form by any means, including 
but not limited to a public posting through the internet, or through a 
personal home page or screen posted on a website or online service; a 
pen pal service; an electronic mail service; a message board; or a chat 
room.
* * * * *
    Mixed audience website or online service means a website or online 
service that is directed to children under the criteria set forth in 
paragraph (1) of the definition of website or online service directed 
to children, but that does not target children as its primary audience, 
and does not collect personal information from any visitor prior to 
collecting age information or using another means that is reasonably 
calculated, in light of available technology, to determine whether the 
visitor is a child. Any collection of age information, or other means 
of determining whether a visitor is a child, must be done in a neutral 
manner that does not default to a set age or encourage visitors to 
falsify age information.
* * * * *

[[Page 2072]]

    Online contact information means an email address or any other 
substantially similar identifier that permits direct contact with a 
person online, including but not limited to, an instant messaging user 
identifier, a voice over internet protocol (VOIP) identifier, a video 
chat user identifier, or an identifier such as a mobile telephone 
number provided the operator uses it only to send a text message.
    Operator means any person who operates a website located on the 
internet or an online service and who collects or maintains personal 
information from or about the users of or visitors to such website or 
online service, or on whose behalf such information is collected or 
maintained, or offers products or services for sale through that 
website or online service, where such website or online service is 
operated for commercial purposes involving commerce among the several 
States or with one or more foreign nations; in any territory of the 
United States or in the District of Columbia, or between any such 
territory and another such territory or any State or foreign nation; or 
between the District of Columbia and any State, territory, or foreign 
nation. This definition does not include any nonprofit entity that 
would otherwise be exempt from coverage under section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45). Personal information is collected 
or maintained on behalf of an operator when:
* * * * *
    (2) The operator benefits by allowing another person to collect 
personal information directly from users of such website or online 
service.
* * * * *
    Personal information means individually identifiable information 
about an individual collected online, including:
* * * * *
    (7) A persistent identifier that can be used to recognize a user 
over time and across different websites or online services. Such 
persistent identifier includes, but is not limited to, a customer 
number held in a cookie, an internet Protocol (IP) address, a processor 
or device serial number, or unique device identifier;
* * * * *
    (9) Geolocation information sufficient to identify street name and 
name of a city or town;
    (10) A biometric identifier that can be used for the automated or 
semi-automated recognition of an individual, including fingerprints or 
handprints; retina and iris patterns; genetic data, including a DNA 
sequence; or data derived from voice data, gait data, or facial data; 
or
    (11) Information concerning the child or the parents of that child 
that the operator collects online from the child and combines with an 
identifier described in this definition.
* * * * *
    School means a State educational agency or local educational agency 
as defined under Federal law, as well as an institutional day or 
residential school, including a public school, charter school, or 
private school, that provides elementary or secondary education, as 
determined under State law.
    School-authorized education purpose means any school-authorized use 
related to a child's education. Such use shall be limited to operating 
the specific educational service that the school has authorized, 
including maintaining, developing, supporting, improving, or diagnosing 
the service, provided such uses are directly related to the service the 
school authorized. School-authorized education purpose does not include 
commercial purposes unrelated to a child's education, such as 
advertising.
    Support for the internal operations of the website or online 
service means:
    (1) Those activities necessary to:
    (i) Maintain or analyze the functioning of the website or online 
service;
* * * * *
    (iii) Authenticate users of, or personalize the content on, the 
website or online service;
    (iv) Serve contextual advertising on the website or online service 
or cap the frequency of advertising;
    (v) Protect the security or integrity of the user, website, or 
online service;
* * * * *
    (vii) Fulfill a request of a child as permitted by Sec.  
312.5(c)(3) and (4).
    (2) Provided, however, that, except as specifically permitted by 
paragraphs 1(i) through(vii) of this definition, the information 
collected for the activities listed in paragraphs (1)(i) through (vii) 
of this definition cannot be used or disclosed to contact a specific 
individual, including through behavioral advertising, to amass a 
profile on a specific individual, in connection with processes that 
encourage or prompt use of a website or online service, or for any 
other purpose.
    Third party means any person who is not:
    (1) An operator with respect to the collection or maintenance of 
personal information on the website or online service; or
    (2) A person who provides support for the internal operations of 
the website or online service and who does not use or disclose 
information protected under this part for any other purpose.
    Website or online service directed to children means a commercial 
website or online service, or portion thereof, that is targeted to 
children.
    (1) In determining whether a website or online service, or a 
portion thereof, is directed to children, the Commission will consider 
its subject matter, visual content, use of animated characters or 
child-oriented activities and incentives, music or other audio content, 
age of models, presence of child celebrities or celebrities who appeal 
to children, language or other characteristics of the website or online 
service, as well as whether advertising promoting or appearing on the 
website or online service is directed to children. The Commission will 
also consider competent and reliable empirical evidence regarding 
audience composition and evidence regarding the intended audience, 
including marketing or promotional materials or plans, representations 
to consumers or to third parties, reviews by users or third parties, 
and the age of users on similar websites or services.
    (2) A website or online service shall be deemed directed to 
children when it has actual knowledge that it is collecting personal 
information from users of another website or online service directed to 
children.
    (3) A mixed audience website or online service shall not be deemed 
directed to children with regard to any visitor not identified as under 
13.
    (4) A website or online service shall not be deemed directed to 
children solely because it refers or links to a commercial website or 
online service directed to children by using information location 
tools, including a directory, index, reference, pointer, or hypertext 
link.
0
4. Revise Sec.  312.3 introductory text and paragraph (a) to read as 
follows:


Sec.  312.3   Regulation of unfair or deceptive acts or practices in 
connection with the collection, use, and/or disclosure of personal 
information from and about children on the Internet.

    General requirements. It shall be unlawful for any operator of a 
website or online service directed to children, or any operator that 
has actual knowledge that it is collecting or maintaining personal 
information from a child, to collect personal information from a child 
in a manner that violates the regulations prescribed under this part.

[[Page 2073]]

Generally, under this part, an operator must:
    (a) Provide notice on the website or online service of what 
information it collects from children, how it uses such information, 
and its disclosure practices for such information (Sec.  312.4(b));
* * * * *
0
5. In Sec.  312.4:
0
a. Revise paragraphs (b), (c) introductory text, (c)(1), (c)(2) 
introductory text, and (c)(2)(i) and (iii);
0
b. Add paragraph (c)(5);
0
c. Revise paragraph (d); and
0
d. Add paragraph (e);
    The revisions and additions read as follows:


Sec.  312.4  Notice.

* * * * *
    (b) Direct notice to the parent or school. An operator must make 
reasonable efforts, taking into account available technology, to ensure 
that a parent of a child or, if applicable, the child's school receives 
direct notice of the operator's practices with regard to the 
collection, use, or disclosure of personal information from children, 
including notice of any material change in the collection, use, or 
disclosure practices to which the parent has previously consented or 
the school has previously authorized.
    (c) Content of the direct notice--(1) Content of the direct notice 
to the parent for purposes of obtaining consent, including under Sec.  
312.5(c)(1) (Notice to Obtain Parent's Affirmative Consent to the 
Collection, Use, or Disclosure of a Child's Personal Information). This 
direct notice shall set forth:
    (i) If applicable, that the operator has collected the parent's or 
child's online contact information from the child, and, if such is the 
case, the name of the child or the parent, in order to obtain the 
parent's consent;
    (ii) That the parent's consent is required for the collection, use, 
or disclosure of personal information, and that the operator will not 
collect, use, or disclose any personal information from the child if 
the parent does not provide such consent;
    (iii) The items of personal information the operator intends to 
collect from the child, how the operator intends to use such 
information, and the potential opportunities for the disclosure of 
personal information, should the parent provide consent;
    (iv) Where the operator discloses personal information to one or 
more third parties, the identities or specific categories of such third 
parties (including the public if making it publicly available) and the 
purposes for such disclosure, should the parent provide consent, and 
that the parent can consent to the collection and use of the child's 
personal information without consenting to the disclosure of such 
personal information to third parties except to the extent such 
disclosure is integral to the nature of the website or online service;
    (v) A hyperlink to the operator's online notice of its information 
practices required under paragraph (d) of this section;
    (vi) The means by which the parent can provide verifiable consent 
to the collection, use, and disclosure of the information; and
    (vii) If the operator has collected the name or online contact 
information of the parent or child to provide notice and obtain 
parental consent, that if the parent does not provide consent within a 
reasonable time from the date the direct notice was sent, the operator 
will delete the parent's or child's online contact information and the 
parent's or child's name from its records.
    (2) Content of the direct notice to the parent under Sec.  
312.5(c)(2) (Voluntary Notice to Parent of a Child's Online Activities 
Not Involving the Collection, Use or Disclosure of Personal 
Information). Where an operator chooses to notify a parent of a child's 
participation in a website or online service, and where such site or 
service does not collect any personal information other than the 
parent's online contact information, the direct notice shall set forth:
    (i) That the operator has collected the parent's online contact 
information from the child in order to provide notice to, and 
subsequently update the parent about, a child's participation in a 
website or online service that does not otherwise collect, use, or 
disclose children's personal information;
* * * * *
    (iii) That the parent may refuse to permit the child's 
participation in the website or online service and may require the 
deletion of the parent's online contact information, and how the parent 
can do so; and
* * * * *
    (5) Content of the direct notice to the school under Sec.  
312.5(c)(10) (Notice to a School for Educational Services). This direct 
notice shall set forth:
    (i) That a school's authorization is required for the collection, 
use, or disclosure of personal information, and that the operator will 
not collect, use, or disclose any personal information from the child 
if the school does not provide such authorization;
    (ii) That the operator's use and disclosure of personal information 
collected from the child is limited to a school-authorized education 
purpose;
    (iii) The items of personal information the operator intends to 
collect from the child, how the operator intends to use such 
information, and the potential opportunities for the disclosure of 
personal information, should the school provide authorization;
    (iv) Where the operator discloses the personal information to third 
parties, the identities or specific categories of such third parties 
and the specific school-authorized education purposes for such 
disclosure, should the school provide authorization;
    (v) A hyperlink to the operator's online notice of its information 
practices required under paragraphs (d) and (e) of this section; and
    (vi) The means by which the school can authorize the collection, 
use, and disclosure of the information.
    (d) Notice on the website or online service. In addition to the 
direct notice, an operator must post a prominent and clearly labeled 
link to an online notice of its information practices with regard to 
children on the home or landing page or screen of its website or online 
service, and, at each area of the website or online service where 
personal information is collected from children. The link must be in 
close proximity to the requests for information in each such area. An 
operator of a general audience website or online service that has a 
separate children's area must post a link to a notice of its 
information practices with regard to children on the home or landing 
page or screen of the children's area. To be complete, the online 
notice of the website or online service's information practices must 
state the following:
    (1) The name, address, telephone number, and email address of all 
operators collecting or maintaining personal information from children 
through the website or online service. Provided that: The operators of 
a website or online service may list the name, address, phone number, 
and email address of one operator who will respond to all inquiries 
from parents concerning the operators' privacy policies and use of 
children's information, as long as the names of all the operators 
collecting or maintaining personal information from children through 
the website or online service are also listed in the notice;
    (2) A description of what information the operator collects from 
children, including whether the website or online service enables a 
child to make personal information publicly available; how the operator 
uses such information; the operator's disclosure practices for such

[[Page 2074]]

information, including the identities or specific categories of any 
third parties to which the operator discloses personal information and 
the purposes for such disclosures; and the operator's data retention 
policy as required under Sec.  312.10;
    (3) If applicable, the specific internal operations for which the 
operator has collected a persistent identifier pursuant to Sec.  
312.5(c)(7); and the means the operator uses to ensure that such 
identifier is not used or disclosed to contact a specific individual, 
including through behavioral advertising, to amass a profile on a 
specific individual, in connection with processes that encourage or 
prompt use of a website or online service, or for any other purpose 
(except as specifically permitted to provide support for the internal 
operations of the website or online service);
    (4) Where the operator collects audio files containing a child's 
voice pursuant to Sec.  312.5(c)(9), a description of how the operator 
uses such audio files and that the operator deletes such audio files 
immediately after responding to the request for which they were 
collected; and
    (5) If applicable, that the parent can review or have deleted the 
child's personal information, and refuse to permit further collection 
or use of the child's information, and state the procedures for doing 
so.
    (e) Additional notice on the website or online service where an 
operator has collected personal information under Sec.  312.5(c)(10). 
In addition to the applicable requirements in paragraph (d) of this 
section, where an operator has collected personal information under 
Sec.  312.5(c)(10), an operator's online notice of its information 
practices with regard to children must state that the operator has 
obtained authorization from a school to collect a child's personal 
information; that the operator will use and disclose the information 
for a school-authorized education purpose and no other purpose; that 
the school may review the information; and that the school may request 
deletion of the child's personal information, and the procedures for 
doing so.
0
6. In Sec.  312.5:
0
a. Revise paragraph (a)(2) and paragraph (b)(2)(ii);
0
b. Redesignate paragraph (b)(2)(vi) as (b)(2)(viii);
0
c. Republish newly designated paragraphs (b)(2)(viii);
0
d. Add new paragraphs (b)(2)(vi) and (vii);
0
e. Revise paragraphs (c)(2) and (4), (c)(6)(i) and (iv), (c)(7) and 
(8); and
0
f. Add paragraphs (c)(9) and (10);
    The revisions, republication, and additions read as follows:


Sec.  312.5  Parental consent.

    (a) * * *
    (2) An operator must give the parent the option to consent to the 
collection and use of the child's personal information without 
consenting to disclosure of his or her personal information to third 
parties, unless such disclosure is integral to the nature of the 
website or online service. An operator required to give the parent this 
option must obtain separate verifiable parental consent to such 
disclosure, and the operator may not condition access to the website or 
online service on such consent.
    (b) * * *
    (2) * * *
    (ii) Requiring a parent, in connection with a transaction, to use a 
credit card, debit card, or other online payment system that provides 
notification of each discrete transaction to the primary account 
holder;
* * * * *
    (vi) Verifying a parent's identity using knowledge-based 
authentication, provided:
    (A) the verification process uses dynamic, multiple-choice 
questions, where there are a reasonable number of questions with an 
adequate number of possible answers such that the probability of 
correctly guessing the answers is low; and
    (B) the questions are of sufficient difficulty that a child age 12 
or younger in the parent's household could not reasonably ascertain the 
answers;
    (vii) Having a parent submit a government-issued photographic 
identification that is verified to be authentic and is compared against 
an image of the parent's face taken with a phone camera or webcam using 
facial recognition technology and confirmed by personnel trained to 
confirm that the photos match; provided that the parent's 
identification and images are deleted by the operator from its records 
after the match is confirmed; or
    (viii) Provided that an operator that does not ``disclose'' (as 
defined by Sec.  312.2) children's personal information, may use an 
email coupled with additional steps to provide assurances that the 
person providing the consent is the parent. Such additional steps 
include: Sending a confirmatory email to the parent following receipt 
of consent, or obtaining a postal address or telephone number from the 
parent and confirming the parent's consent by letter or telephone call. 
An operator that uses this method must provide notice that the parent 
can revoke any consent given in response to the earlier email.
* * * * *
    (c) * * *
    (2) Where the purpose of collecting a parent's online contact 
information is to provide voluntary notice to, and subsequently update 
the parent about, the child's participation in a website or online 
service that does not otherwise collect, use, or disclose children's 
personal information. In such cases, the parent's online contact 
information may not be used or disclosed for any other purpose. In such 
cases, the operator must make reasonable efforts, taking into 
consideration available technology, to ensure that the parent receives 
notice as described in Sec.  312.4(c)(2);
* * * * *
    (4) Where the purpose of collecting a child's and a parent's online 
contact information is to respond directly more than once to the 
child's specific request, and where such information is not used for 
any other purpose, disclosed, or combined with any other information 
collected from the child. Provided, however, that an operator may not 
utilize this exception to encourage or prompt use of a website or 
online service. An operator utilizing this exception for permissible 
purposes must make reasonable efforts, taking into consideration 
available technology, to ensure that the parent receives notice as 
described in Sec.  312.4(c)(3). An operator will not be deemed to have 
made reasonable efforts to ensure that a parent receives notice where 
the notice to the parent was unable to be delivered;
* * * * *
    (6) * * *
    (i) Protect the security or integrity of the website or online 
service;
* * * * *
    (iv) To the extent permitted under other provisions of law, to 
provide information to law enforcement agencies or for an investigation 
on a matter related to public safety; and where such information is not 
used for any other purpose;
* * * * *
    (7) Where an operator collects a persistent identifier and no other 
personal information and such identifier is used for the sole purpose 
of providing support for the internal operations of the website or 
online service. In such case, the operator shall provide notice under 
Sec.  312.4(d)(3);
    (8) Where an operator covered under paragraph (2) of the definition 
of website or online service directed to children in Sec.  312.2 
collects a persistent identifier and no other personal information from 
a user who

[[Page 2075]]

affirmatively interacts with the operator and whose previous 
registration with that operator indicates that such user is not a 
child. In such case, there also shall be no obligation to provide 
notice under Sec.  312.4;
    (9) Where an operator collects an audio file containing a child's 
voice, and no other personal information, for use in responding to a 
child's specific request and where the operator does not use such 
information for any other purpose, does not disclose it, and deletes it 
immediately after responding to the child's request. In such case, 
there also shall be no obligation to provide a direct notice, but 
notice shall be required under Sec.  312.4(d); or
    (10) Where the operator obtains school authorization for the 
collection of the child's personal information for a school-authorized 
education purpose. In such a case, the operator must ensure that the 
school receives notice as described in Sec.  312.4(c)(5) and must have 
a written agreement with the school that:
    (i) Indicates the name and title of the person providing 
authorization and attests that the person has the authority to do so;
    (ii) Limits the operator's use and disclosure of the personal 
information to a school-authorized education purpose only and no other 
purpose;
    (iii) Provides that the operator is under the school's direct 
control with regard to the use, disclosure, and maintenance of the 
personal information collected from the child pursuant to school 
authorization; and
    (iv) Sets forth the operator's data retention policy with respect 
to such information in accordance with Sec.  312.10.
0
7. In Sec.  312.6:
0
a. Revise the section heading and paragraph (a) introductory text;
0
b. Redesignate paragraphs (b) and (c) as paragraphs (c) and (d);
0
c. Add new paragraph (b); and
0
d. Republish newly redesignated paragraphs (c) and (d).
    The revisions, addition, and republications read as follows:


Sec.  312.6  Right to review personal information provided by a child.

    (a) Upon request of a parent whose child has provided personal 
information to a website or online service, the operator of that 
website or online service is required to provide to that parent the 
following:
* * * * *
    (b) Where personal information is collected from the child pursuant 
to Sec.  312.5(c)(10), the operator of the website or online service is 
required to provide the rights under paragraph (a) of this section to 
the school and is not required to provide such rights to a parent whose 
child has provided personal information to the website or online 
service.
    (c) Neither an operator nor the operator's agent shall be held 
liable under any Federal or State law for any disclosure made in good 
faith and following reasonable procedures in responding to a request 
for disclosure of personal information under this section.
    (d) Subject to the limitations set forth in Sec.  312.7, an 
operator may terminate any service provided to a child whose parent has 
refused, under paragraph (a)(2) of this section, to permit the 
operator's further use or collection of personal information from his 
or her child or has directed the operator to delete the child's 
personal information.
* * * * *
0
8. Revise Sec.  312.8 to read as follows:


Sec.  312.8  Confidentiality, security, and integrity of personal 
information collected from children.

    (a) The operator must establish and maintain reasonable procedures 
to protect the confidentiality, security, and integrity of personal 
information collected from children.
    (b) At a minimum, the operator must establish, implement, and 
maintain a written children's personal information security program 
that contains safeguards that are appropriate to the sensitivity of the 
personal information collected from children and the operator's size, 
complexity, and nature and scope of activities. To establish, 
implement, and maintain a children's personal information security 
program, the operator must:
    (1) Designate one or more employees to coordinate the operator's 
children's personal information security program;
    (2) Identify and, at least annually, perform additional assessments 
to identify internal and external risks to the confidentiality, 
security, and integrity of personal information collected from children 
and the sufficiency of any safeguards in place to control such risks;
    (3) Design, implement, and maintain safeguards to control risks 
identified through the risk assessments required under paragraph (b)(2) 
of this section. Each safeguard must be based on the volume and 
sensitivity of the children's personal information that is at risk, and 
the likelihood that the risk could result in the unauthorized 
disclosure, misuse, alteration, destruction or other compromise of such 
information;
    (4) Regularly test and monitor the effectiveness of the safeguards 
in place to control risks identified through the risk assessments 
required under paragraph (b)(2) of this section; and
    (5) At least annually, evaluate and modify the children's personal 
information security program to address identified risks, results of 
required testing and monitoring, new or more efficient technological or 
operational methods to control for identified risks, or any other 
circumstances that an operator knows or has reason to know may have a 
material impact on its children's personal information security program 
or any safeguards in place.
    (c) Before allowing other operators, service providers, or third 
parties to collect or maintain personal information from children on 
the operator's behalf, or before releasing children's personal 
information to such entities, the operator must take reasonable steps 
to determine that such entities are capable of maintaining the 
confidentiality, security, and integrity of the information and must 
obtain written assurances that such entities will employ reasonable 
measures to maintain the confidentiality, security, and integrity of 
the information.
0
9. Revise Sec.  312.10 to read as follows:


Sec.  312.10  Data retention and deletion requirements.

    An operator of a website or online service shall retain personal 
information collected online from a child for only as long as is 
reasonably necessary to fulfill the specific purpose(s) for which the 
information was collected and not for a secondary purpose. When such 
information is no longer reasonably necessary for the purpose for which 
it was collected, the operator must delete the information using 
reasonable measures to protect against unauthorized access to, or use 
of, the information in connection with its deletion. Personal 
information collected online from a child may not be retained 
indefinitely. At a minimum, the operator must establish, implement, and 
maintain a written children's data retention policy that sets forth the 
purposes for which children's personal information is collected, the 
business need for retaining such information, and a timeframe for 
deletion of such information that precludes indefinite retention. The 
operator must provide its written children's data retention policy in 
the notice on the website or online service provided in accordance with 
Sec.  312.4(d).
0
10. In Sec.  312.11:
0
a. Republish (b) introductory text;
0
b. Revise paragraphs (b)(2), (d)(1) and (2), and (d)(3)(iii);
0
c. Add paragraph (d)(4);

[[Page 2076]]

0
d. Redesignate paragraphs (f) and (g) as paragraphs (g) and (h);
0
e. Add paragraph (f);
0
f. Revise newly redesignated paragraph (g); and
0
g. Republish newly redesignated paragraph (h).
    The republications, revisions, and additions read as follows:


Sec.  312.11  Safe harbor programs.

* * * * *
    (b) Criteria for approval of self-regulatory program guidelines. 
Proposed safe harbor programs must demonstrate that they meet the 
following performance standards:
* * * * *
    (2) An effective, mandatory mechanism for the independent 
assessment of subject operators' compliance with the self-regulatory 
program guidelines. At a minimum, this mechanism must include a 
comprehensive review by the safe harbor program, to be conducted not 
less than annually, of each subject operator's information privacy and 
security policies, practices, and representations.
* * * * *
    (d) * * *
    (1) By [DATE SIX MONTHS AFTER PUBLICATION OF THE FINAL RULE IN THE 
FEDERAL REGISTER], and annually thereafter, submit a report to the 
Commission that identifies each subject operator and all approved 
websites or online services, as well as any subject operators that have 
left the safe harbor program. The report must also contain, at a 
minimum:
    (i) A narrative description of the safe harbor program's business 
model, including whether it provides additional services such as 
training to subject operators;
    (ii) Copies of each consumer complaint related to each subject 
operator's violation of a safe harbor program's guidelines;
    (iii) An aggregated summary of the results of the independent 
assessments conducted under paragraph (b)(2) of this section;
    (iv) A description of each disciplinary action taken against any 
subject operator under paragraph (b)(3) of this section, as well as a 
description of the process for determining whether a subject operator 
is subject to discipline; and
    (v) A description of any approvals of member operators' use of a 
parental consent mechanism, pursuant to Sec.  312.5(b)(4);
    (2) Promptly respond to Commission requests for additional 
information; and
    (3) * * *
    (iii) Results of the independent assessments of subject operators' 
compliance required under paragraph (b)(2) of this section; and
    (4) No later than [DATE 90 DAYS AFTER PUBLICATION OF THE FINAL RULE 
IN THE FEDERAL REGISTER], publicly post a list of all current subject 
operators on each of the approved safe harbor program's websites and 
online services. Approved safe harbor programs shall update this list 
every six months thereafter to reflect any changes to the approved safe 
harbor programs' subject operators or their applicable websites and 
online services.
* * * * *
    (f) Review of self-regulatory program guidelines. Every three years 
approved safe harbor programs shall submit to the Commission a report 
detailing the safe harbor program's technological capabilities and 
mechanisms for assessing subject operators' fitness for membership in 
the safe harbor program.
    (g) Revocation of approval of self-regulatory program guidelines. 
The Commission reserves the right to revoke any approval granted under 
this section if at any time it determines that the approved self-
regulatory program guidelines or their implementation do not meet the 
requirements of this part.
    (h) Operators' participation in a safe harbor program. An operator 
will be deemed to be in compliance with the requirements of Sec. Sec.  
312.2 through 312.8 and 312.10 if that operator complies with 
Commission-approved safe harbor program guidelines. In considering 
whether to initiate an investigation or bring an enforcement action 
against a subject operator for violations of this part, the Commission 
will take into account the history of the subject operator's 
participation in the safe harbor program, whether the subject operator 
has taken action to remedy such non-compliance, and whether the 
operator's non-compliance resulted in any one of the disciplinary 
actions set forth in paragraph (b)(3) of this section.
0
11. In Sec.  312.12, revise paragraph (b) to read as follows:


Sec.  312.12  Voluntary Commission approval processes.

* * * * *
    (b) Support for the internal operations of the website or online 
service. An interested party may file a written request for Commission 
approval of additional activities to be included within the definition 
of support for the internal operations of the website or online 
service. To be considered for approval, a party must provide a detailed 
justification why such activities should be deemed support for the 
internal operations of the website or online service, and an analysis 
of their potential effects on children's online privacy. The request 
shall be filed with the Commission's Office of the Secretary. The 
Commission will publish in the Federal Register a document seeking 
public comment on the request. The Commission shall issue a written 
determination within 120 days of the filing of the request.

    By direction of the Commission.
Joel Christie,
Acting Secretary.
[FR Doc. 2023-28569 Filed 1-10-24; 8:45 am]
BILLING CODE 6750-01-P