The Federal Trade Commission (“FTC”) has sent letters to two foreign electronics companies warning that their practices of collecting geolocation data from children without their parent’s permission may violate the Children’s Online Privacy Protection Act (“COPPA”) Rule.  The FTC stressed that foreign companies that direct their services toward U.S. children must comply with COPPA.

The FTC’s letters were sent to China-based Gator Group Co., Ltd., and Sweden-based Tinitell, Inc., both of which sell apps that assist parents with tracking their children’s location to make sure that they are safe.  Gator Group advertises a device called the “Kids GPS” Gator Watch, marketed by the company as a “child’s first cell phone,” and an app that connects to that device.  The app can track the child and enable parents to set an alarm when the child leaves a geo-fenced “safe zone.”  Tinitell, Inc., markets an app that connects to a mobile phone that a child wears as a watch, and likewise allows parents the ability to locate the child.

The FTC claims that Gator Group and Tinitell used their products to collect geolocation data from children without parental permission, thereby violating COPPA’s requirement that companies collecting personal information from children under the age of 13 provide direct notice and obtain verifiable parental consent before collecting, using, or disclosing that personal information.  The Rule also requires that companies take reasonable measures to secure any information that they collect. 

Of particular note is the FTC’s warning that foreign-based websites and online services involved in commerce in the United States must comply with COPPA when their services are “directed to children in the United States,” or when the companies “knowingly collect personal information from children in the United States.” 

The FTC’s letters also reveal that a company has continuing COPPA obligations as long as the devices it has sold are still in operation.  For example, although Tinitell had stopped manufacturing or selling its devices, the devices already in circulation will operate until September 2018, and the FTC was clear that the company must still comply with COPPA.