- The Washington Times - Tuesday, July 18, 2000

Half of all Web sites marketed toward children are breaking a new law intended to protect the privacy of young people, the Federal Trade Commission said yesterday.

The FTC yesterday notified Web sites that they conducted a sweep of children's sites in June to measure the effectiveness of the Children's Online Privacy Protection Act, which took effect April 21.

The agency has told some companies they could face stiff penalties because they aren't complying with the law, and investigations into some of the Web sites are under way.

"It's possible some of the sites may be subject to compliance action," FTC attorney Toby Milgrom Levin said. "We think there are a number of sites that are not in compliance."

The law is intended to protect the privacy of children ages 12 and younger by requiring on-line companies to get approval from parents before collecting personal data from them.

The law also requires companies collecting information to post privacy policies explaining to users that they will collect personal information and how they will use the data.

FTC enforcers posed as children during multiple visits to each site monitored to determine whether the Web companies were following the law.

Half of the Web sites are failing to post a privacy policy or to set up a mechanism that lets parents approve a company's request to collect data from children, FTC Bureau of Consumer Protection Director Jodie Bernstein said.

"That's higher than it should be," Mrs. Bernstein said.

Agency officials would not say how many Web sites they visited in their sweep and declined to say how many of those are violating the law.

The agency's concern stems partly from the increase in the number of young people using the Internet. About 10.4 million children ages 12 and younger used the Internet in 1999, according to New York research firm Jupiter Communications.

That figure is expected to grow to 13.7 million children by the end of this year and to 26.9 million by the end of 2009.

Despite the FTC's alarm over the number of companies flouting the law, Internet executives say most on-line companies especially big, popular Web sites like www.Disney.com or www.Nick.com are complying.

"The FTC's guidelines make a lot of sense. I don't think there are many companies out there that don't want to comply with COPPA," said Nina Benton, chief executive officer of BigChange Networks Inc., a District of Columbia-based firm that operates www.Allowancenet.com, a money management and financial education Web site for preteens.

That is a sign the industry is taking the FTC's mandate seriously, said Amy Aidman, research director for the Center for Media Education.

They are taking it seriously because of the $11,000 fine for each violation the FTC is prepared to levy against companies, said David Steer, spokesman for San Jose-based TrustE, a nonprofit group that grants its seal of approval to Web sites with comprehensive privacy policies.

"This law is intended to put companies not in compliance out of business. That's a good thing in the sense that it sends a message to the industry that this is not a blank law and it has teeth," Mr. Steer said.

Some Web sites have abandoned collecting information from children to ensure they don't break the law.

San Francisco-based Web site www.E-Crush.com, which sends e-mail messages on behalf of anonymous suitors trying to woo potential boyfriends or girlfriends, has deleted the accounts of all registered users younger than 13.

But the new privacy law was never intended to block children from having access to Internet content, and FTC regulators said they are disappointed that some companies have stopped providing content for children because they are concerned about complying with the law.

"Companies can put mechanisms in place to comply with COPPA," Mrs. Levin said.

Other sites are continuing to provide content for children, but have stopped asking for personal data.

About 25 percent of Web sites that FTC enforcers visited in their June sweep provided information for children, but didn't ask them for personal data.

The FTC has tentatively scheduled another sweep of Web sites for September.

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