Path Social Network Settling with FTC Over COPPA & Other Privacy Violations

Path Inc., operator of the Path social networking app has agreed to settle with the Federal Trade Commission (FTC) based on allegations that the company violated the FTC Act prohibitions on unfair and deceptive practices as well as the Children’s Online Privacy Protection Act (COPPA).

The Path app allows users to keep online journals, including photographs, thoughts, locations, songs, and names, as well as share that information with their network. The company’s app automatically collected information from the users’ contact list, including names, addresses, phone numbers, email addresses, dates of birth, and Facebook and Twitter user names to the extent that such information was included in the contact list. Additionally, with respect to children under the age of 13, Path permitted this group to register for the app and provide personal information without obtaining parental consent or complying with other COPPA requirements. This was done despite the fact that Path required users to input their dates of birth when downloading the app.

As a result of the FTC’s challenge, the company has now agreed to settle FTC charges by agreeing to (1) establish a comprehensive privacy program, (2) obtain independent privacy audits every other year for 20 years, (3) stop making misrepresentations about the extent to which they protect consumer information, (4) delete information collected from children under 13 and stop violating COPPA, and (5) pay an $800,000 fine.

The FTC has recently focused its attention on COPPA compliance and has publicly challenged several parties, including Artist Arena LLC, operator of fan websites for stars such as Justin Bieber and Demi Lovato, as well as RockYou Inc., operator of a social gaming website, for COPPA violations. It also recently announced changes to the COPPA Rule. Given this, mobile operators collecting data from children should ensure they are complying with all the recent guidance and the amended Rule, as the FTC is certainly making this the focus of 2013.

Arent Fox is monitoring this issue. For more information please contact the attorneys listed next to this article.