A Washington trade group that represents independent apps developers criticized the agency for addressing the concerns of large businesses while doing too little for the startups that make educational apps parents and teachers want. The FTC's belief that the apps industry will figure out how to thrive under the new rules is akin to jumping off a cliff then building a parachute, said Morgan Reed, executive director of the Association for Competitive Technology.
"While that may work for big companies, small companies lack the silk and line to build that parachute before they hit the ground," Reed said.
Companies are not excluded from advertising on websites directed at children, allowing business models that rely on advertising to continue, Leibowitz said. But behavioral marketing techniques that target children are prohibited unless a parent agrees. "You may not track children to build massive profiles," he said.
The agency included in the rules new methods for securing verifiable consent after the software industry and Internet companies raised concerns over how to confirm that the permission actually came from a parent. Electronic scans of signed consent forms are acceptable, as is video-teleconferencing between the website operator or online service and the parent, according to the agency.
The FTC also said it is encouraging technology companies to recommend additional verification methods. Leibowitz said he expects that this will "unleash innovation around consent mechanisms."
Emailed consent is also acceptable as long as the business confirms it by sending an email back to the parent or calling or sending a letter. In cases of email confirmation, the information collected can only be used for internal use by that company and not shared with third parties, the agency said.
The FTC's investigation of apps developers came after the agency examined 400 kids' apps that it purchased from Apple's iTunes store and Google's apps store, Google Play. It determined that 60 percent of them transmitted the user's unique device identification to the software maker or, more frequently, to advertising networks and companies that compile, analyze and sell consumer information for marketing campaigns.