New online child privacy rules will keep anonymous advertisers and marketers from siphoning personal information about preteens but won't restrain innovation among technology companies and businesses that rely on the Internet to reach consumers, government officials said Wednesday.
Those assurances failed to win over software developers who said the cost of complying with the new regulations and the risk of violating them will cause many responsible businesses to abandon the children's marketplace.
Information about children that cannot be collected unless a parent first gives permission now includes the location data that a cellphone generates, as well as photos, videos and audio files containing a human image or voice, according to the rules issued Wednesday by the Federal Trade Commission.
Data known as "persistent identifiers" that allow a person to be tracked over time and across various websites are also considered personal data and covered by the rules, the agency said.
The rules offer several new methods for verifying a parent's consent, including electronically scanned consent forms, video conferencing and e-mail.
The rules ensure that a 14-year-old law, the Children's Online Privacy Protection Act, keeps pace with evolving technology, including cellphones, tablets, software apps and social-networking sites, FTC Chairman Jon Leibowitz said at a Capitol Hill press conference.
The agency tried to achieve a balance between protecting kids and ensuring a key sector of the economy keeps growing, Leibowitz said.
Liability for violations of the rules won't extend to Google, Apple and other companies that operate online stores offering public access to kids' apps, the FTC said. Google and Apple had warned that if the rule were written to include their stores, they would exclude many apps specifically intended for kids. That would hurt the nation's classrooms, where new and interactive apps are used by teachers and students, Apple said.
But the Application Developers Alliance, an industry association, said the rules leave the app industry, which is made up primarily of small businesses, liable for violations. The risk may drive entrepreneurs out of the children's app marketplace, said Jon Potter, the alliance's president.
Companies are not excluded from advertising on websites directed at children, allowing business models that rely on advertising to continue, Leibowitz said. But behavioral marketing techniques that target kids are prohibited unless a parent agrees to them. "You may not track children to build massive profiles," he said.
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