OpenX Technologies Agrees To Pay $2 Million To Resolve FTC Claims It Collected Children’s Data Without Parental Consent

FTC, OpenX Child Data Settlement Overview: 

• Who: OpenX Technologies has agreed to pay $2 million to settle an investigation by the Federal Trade Commission (FTC) into the advertising platform. 
• Why: The FTC claims OpenX knowingly collected data from children under the age of 13 without obtaining or attempting to obtain parental consent.
• Where: The lawsuit was filed in California federal court.

OpenX Technologies has agreed to pay $2 million to resolve an investigation by the Federal Trade Commission (FTC) into the online advertising platform’s alleged practice of collecting information from children under the age of 13 without their parents’ consent. 

OpenX will also delete certain data it has collected, implement a privacy program to ensure it complies with regulations and stop the alleged improper data collection practices as part of the agreement announced by the agency last week. 

The FTC claims OpenX had used apps targeted specifically at children to collect their data while failing to either obtain or attempt to obtain consent from their parents, according to a complaint that was filed alongside the proposed settlement. 

OpenX’s alleged actions put it in violation of the Children’s Online Privacy Protection Act (COPPA), the agency claims. 

Additionally, the FTC alleges OpenX deceived users by collecting geolocations from individuals who had specifically requested not to have their locations tracked. 

FTC Commissioner Says OpenX “Brought The Allegations Upon Itself”

While the original civil penalty portion of the settlement was set to be $7.5 million, the amount will be suspended once OpenX pays the agreed upon $2 million. 

“OpenX misrepresented its data collection practices on two fronts: by collecting and transferring location data when the consumer had not provided consent or had expressly denied consent; and by misrepresenting its COPPA-related activities and practices,” FTC Commissioner Noah Joshua Phillips says in a statement concurring with the settlement. 

In his statement, Phillips claims OpenX brought the allegations upon itself by gathering data from apps that it had reviewed to ensure they weren’t “child-directed.” 

Phillips claims that OpenX may not have been “subject to penalties at all” had it not done this since there would have been no proof it had knowledge it was collecting the information of children, a requirement for a COPPA violation. 

The commissioner noted that the practice of reviewing apps to ensure they aren’t directed at children in and of itself is not something the agency would ultimately want to discourage. 

“And, so, going forward, we need to be careful to weigh the instinct to penalize against the desire to foster a commercial environment where care is taken with regard to apps directed at children,” Phillips wrote. 

In a separate case, the FTC is currently sparring with Meta Platforms over the agency’s claims that the company formerly known as Facebook has monopolized the social networking market.

Has your child’s data been collected without your consent? Let us know in the comments! 

The FTC, OpenX Child Data Case is United States of America v. OpenX Technologies Inc., Case No. 2:21-cv-09693, in the U.S. District Court for the Central District of California.

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