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Posted at 08:36 AM ET, 08/22/2012

Groups ask FTC to investigate McDonald’s, General Mills over kids’ privacy law

Several privacy and children’s advocacy groups have written to the Federal Trade Commission asking the agency to investigate large companies such as McDonald’s and General Mills for using marketing techniques they say violate the Children’s Online Privacy Protection Act (COPPA). The letter also names Doctor’s Associates, Inc. — the owner of Subway — as well as Viacom and Turner Broadcasting Systems.

McDonald's Corp. signage stands outside of a restaurant in Chicago. (Tim Boyle - Bloomberg)
In the letter, groups including the Center for Digital Democracy, the American Academy of Child and Adolescent Psychiatry and Consumer Watchdog ask FTC to look into “refer-a-friend” marketing tactics used by these companies.

That term refers to a marketing technique that invites children to make a music video or play a game, and then share the video with their friends by entering the names and e-mail addresses of other people.

COPPA requires that companies collecting personal information from children under the age of 13 on child-directed Web sites notify and obtain advance permission from parents. The groups say this viral marketing technique circumvents that requirement and also places tracking cookies on the computers of those who participate in the marketing campaigns.

“They have created a kind of backdoor way to get around obtaining parental permission,” said Jeff Chester, the executive director of the Center for Digital Democracy. “This gets around the letter and the spirit of COPPA.”

In the letter, the groups point to research that indicates children are more susceptible to these viral marketing techniques and often don’t understand they are sending promotional material to friends.

And in the case of McDonald’s, the letter said, children are asked to upload a picture to the Web to be included in a music video, which is only supposed to be retained for two weeks. The groups have found that, at least in some cases, the pictures are retained for much longer.

“Children and teens are especially vulnerable to targeted advertising due to their use of social media tools, making it all the more important to update COPPA for the 21st century,” said Rep. Ed Markey (D-Mass.), co-chair of the bipartisan House committee on privacy and co-sponsor of the Do Not Track Kids Act, which is meant to update the children’s privacy law passed in 1998.

His bill, he said, will “add new privacy protections to ensure that children’s personal information isn’t collected or used without express parental permission and corporations do not target advertising at children.”

Chester said the FTC — which said last year that it would consider adding new protections for mobile browsing and online gaming to the 1998 law — should move quickly to update its rules.

“This shows companies still do not get COPPA,” he said, adding that FTC has been slow to address the matter. “Congress needs to act so that the privacy of children can be more protected.”

Hemanshu Nigam, an online privacy expert and CEO of consulting firm SSP Blue, said the technique itself may not be of concern to the FTC, but it may look at how companies are collecting the data.

“If they aren’t establishing a direct relationship with the referred friend and are not directly collecting or sharing any information from these referred friends, it’s difficult to say McDonald’s was in the wrong,” Nigam said.

By  |  08:36 AM ET, 08/22/2012

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