On December 6, 2016, The Electronic Privacy Information Center, The Campaign for a Commercial Free Childhood, The Center for Digital Democracy and Consumers Union filed a Complaint and Request for Investigation, Injunction and Other Relief (the “Complaint”) with the Federal Trade Commission (FTC) against Genesis Toys (Genesis) and Nuance Communications (Nuance) regarding alleged violations of the Children’s Online Privacy Act (COPPA) and unlawful unfair and deceptive practices within the meaning of Section 5 of the FTC Act. Genesis sells the My Friend Cayla (Cayla) and the i-Que Intelligent Robot (i-Que) toys. Cayla and i-Que are interconnected toys that talk and interact with children through capturing, storing and analyzing spoken communications utilizing Nuance’s systems and technology. Each toy consists of a physical doll with Bluetooth and a connected mobile app. The toys collect personal information concerning the child and transmit the information to Nuance for storage and processing. The Complaint includes an analysis of each privacy policy, terms of service, various notifications, and user acceptance, including parental permission for collection and use of information concerning children under the age of thirteen. As described in the Complaint, the policies and terms of use are inconsistent, fail to inform of the actual use of the information and do not contain the appropriate parental consent mechanisms. Further, the Complaint alleges that manner of storage and sharing of the collected information is unclear and may exceed what is necessary for use of the toy. The Complaint also identifies a technical flaw that would, under certain circumstances, allow unauthorized parties with a cell phone within Bluetooth range to listen in on the child and even communicate directly with the child. The BBC has reported that an additional complaint has been filed by the Norwegian Consumer Council in Norway, and additional complaints are planned in France, Sweden, Greece, Belgium, Ireland and the Netherlands.
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