- The Washington Times - Friday, April 20, 2001

The Federal Trade Commission yesterday levied its first fines against three Internet companies for violating a new law intended to protect the privacy of children and shield them from unscrupulous marketers.
Meanwhile, an independent study indicated that Web sites are collecting less information from children but urged the government agency to continue enforcing the law.
The FTC said the $100,000 total fine, part of a settlement agreement with the Web site operators, were levied two days before the first anniversary of the Children's Online Privacy Protection Act.
An FTC official said most companies appear to be complying with the new privacy law, despite the violations.
"We are heartened by the fact that industry has gone to great lengths to be in compliance," said Lee Peeler, the FTC's associate director of advertising practices.
The FTC charged the operators of Girlslife.com, Bigmailbox.com and Insidetheweb.com with illegally collecting personal information from children younger than 13 years old without getting the consent of parents.
The agency said each Web site collected children's full names, home addresses, phone numbers and e-mail addresses, and charged that the Web sites collected more information than they needed for participation in the activities the children engaged in, also a violation of the new law.
The sites also failed to post privacy policies that comply with the law, the FTC said, and that Bigmailbox.com provided information it collected about children to third parties.
Bigmailbox.com had 547,000 visitors in March and Insidetheweb.com had 545,000 visitors that month, according to Nielsen Net Ratings, which measures traffic to Web sites. Girlslife.com had too few visitors to register on its tracking service.
Yesterday's action by the FTC came on the same day that a report from the District-based Center for Media Education concluded companies are beginning to comply with the Children's Online Privacy Protection Act.
In its survey of 153 Web sites, the center found that 19.8 percent of Web sites are collecting the street addresses of children, compared with 49 percent of sites that did so in 1998. Only 10.7 percent are collecting telephone numbers, compared with 24 percent of sites that collected them three years ago.
"That was the intent to cut down on the amount of data collected," Center for Media Education President Kathryn Montgomery said. "Overall the industry seems to be moving in the right direction."
But there are discouraging signs.
The number of Web sites collecting e-mail addresses of children rose from 96 percent to 99.2 percent, and only 19 of the 153 sites took adequate measures through the use of faxes, mail or telephones to obtain parental consent.
A separate study in March by the Annenberg Public Policy Center at the University of Pennsylvania found that almost half of 162 sites surveyed didn't have prominent links to privacy policies, which outline what data a site collects and how it plans to use the information. The FTC's fair information practices endorse posting privacy policies on Web sites and outlining how information is used.
Fourteen sites had no privacy policy.
"One year after the passage of COPPA, we found more Web sites skirting the COPPA requirements than following them carefully," said Joseph Turow, author of the study and a professor at the Annenberg School for Communication.
Other sites have avoided the trouble and expense of complying with COPPA by kicking children younger than 13 off.
San Francisco-based Web site ECrush.com said it would have cost $25,000 annually to screen for subscribers younger than 13 and obtain parental approval before collecting their personal information.
"We kicked them all off rather than institute a credible verification program," ECrush President Karen DeMars said.
Other Web sites have let children stay online by allowing them to use anonymous user names or nicknames, then asking the children to provide a minimal amount of personal information.
Those sites include Lego.com, Barbie.com and Nickelodeon's Nick.com.

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