FTC releases new guidelines on kids privacy: The Federal Trade Commission on Wednesday issued an update to online child privacy laws that would require application makers to notify parents to collect a child’s photographs, videos and geo-location information, The Washington Post reported.

Companies also must get parental consent before using tracking tools such as cookies that peek into children’s IP addresses and device identification numbers.

Privacy advocates have long-called for these types of rules, which they say will help insulate the Web’s youngest users against more persistent tracking from developers and advertisers. But companies such as Disney and Facebook, the report said, have argued strict rules can curb innovation and that compliance puts a financial burden on individual developers.

Rockefeller introduces video game violence bill: Sen. Jay Rockefeller (D-W.V.) introduced a bill Wednesday that may reignite the debate over the effect that violent video games have on young people.

The bill would direct the National Academy of the Sciences to examine the effect that violent video games have on children and compare these effects against other violent media. The NAS must submit the report within 18 months to Congress, the FTC and the Federal Communications Commission.

In a statement, Rockefeller seemed to criticize a recent Supreme Court decision knocking down a California law that banned the sale of violent video games to minors.

“Recent court decisions demonstrate that some people still do not get it,” Rockefeller said. “They believe that violent video games are no more dangerous to young minds than classic literature or Saturday morning cartoons. Parents, pediatricians, and psychologists know better.”

Justice settles with Penguin over e-books case: The Justice Department announced Wednesday that it has settled with Penguin Books, one of the defendants in an e-books pricing case the implicated Apple and other publishers in a price-fixing scheme.

The proposed settlement was filed Wednesday in the U.S. District Court for the Southern District of New York. The Justice Department has already settled with Hachette, HarperCollins and Simon & Schuster over the allegations. The department is continuing litigation against Apple and Macmillan, who dispute the charges.

Instagram uproar continues: The uproar over Instagram’s changes to its privacy policy continued Wednesday, as users waited for the company to post new revisions to its terms of use. On Monday, Instagram posted new rules set to go into effect on Jan. 16, that appeared to give the service the right to include user photos and other content in advertisements without getting consent.

Instagram said subsequently that it never planned to put user photos in advertisements, but included the language to allow advertisers to do things such as show users which of their friends are also following a particular brand.

Nickelodeon to resubmit SpongeBob app: Nickelodeon said that it will resubmit an app, SpongeBob Diner Dash, to Apple’s App Store following a privacy group’s complaint to the FTC. On Monday, the Center for Digital Democracy said that it had found evidence that the app collected personal information from children in violation of the Children’s Online Privacy Protection Act.

In a statement, the company said that it could “confirm that no names, e-mail addresses or other personally identifiable information were collected, and, therefore, we believe that no violation of COPPA occurred.”Information such as names are stored locally to the device, the company said.

Nickelodeon did say the app had an “optional email prompt,” but was not operational within the program.