The Federal Trade Commission and US Department of Justice’s complaint against WW International for marketing a weight loss app for children and collecting their personal information without parental decision serves as a wake-up call for marketers to audit consumer targeting practices at children.
Experts shared those sentiments with CMSWire after this month’s ruling found the company, formerly known as Weight Watchers, marketed to children as young as 8 years old. Weight Watchers must now delete any information illegally collected from children under 8, destroy algorithms derived from such data and pay $1.5 million in penalties.
“It is a brutal reality, but given the FTC’s recent action against Weight Watchers, the market will now be difficult to operate for marketers,” said Nazy Rafaeil, SEO and marketing director at Jovani.
“Acquiring data from cookies on websites and understanding customer preferences has gotten complicated … Companies mark children as the biggest target for the audience that can improve engagement. …Marketers will have to be very cautious moving forward.”
Retaining Children’s Data Indefinitely
According to FTC officials, here’s what WW International and a subsidiary called Kurbo did in targeting children:
- Who was the target? Kurbo by WW, a health and wellness app and website, targeted children as young as 8, in addition to teens and families.
- What does the app collect? Food intake, activity, weight, names, email addresses, birth dates.
- Who could sign up? Until late 2019, users could sign up for Kurbo by WW’s service either on the app or website by indicating that they were a parent signing up for their child or a child over the age of 13 signing up for themselves.
- What law is in play? The FTC’s Children’s Online Privacy Protection Act Rule (COPPA Rule), which requires that websites, apps and online services that are child-directed or knowingly collect personal information from children, notify parents and get their consent before collecting, using or disclosing personal information from children under 13.
- What else did WW International do wrong? According to the FTC’s and DOJ’s complaint, Kurbo by WW:
- Encouraged younger users to falsely claim they were over the age of 13, despite text indicating that children under 13 must sign up through a parent.
- Failed to provide a mechanism to ensure that those who chose the parent signup option were indeed parents and not a child trying to bypass the age restriction.
- Gave parents notice about information collection only if they clicked a hyperlink buried in a string of other links.
- Violated the COPPA Rule’s data retention provisions by retaining children’s personal information indefinitely and only deleting it when requested by a parent.
“Parents have a right to know and consent before companies collect their children’s personal information,” US Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement. “The department is committed to enforcing the protections against unauthorized collection of information from consumers, particularly children.”
Can Brands Really Delete Data Per Sanctions?
What’s the big takeaway from this news? Government naivety, according to Andrew Frank, distinguished VP analyst at Gartner. It illustrates just how far behind legal and regulatory thinking is relative to the engineering and data science minds at big tech platforms.
The notion that retaining algorithms built on ill-gotten data is even a legal option for privacy violators seems “surprisingly naïve from a technology perspective,” Frank said.
“At the same time,” Frank added in an interview with CMSWire, “the idea that complex algorithms with many variations and instances spread across an organization can be simply and verifiably deleted also seems technically suspect. I think the FTC and other lawmakers need a lot more informed creativity to come up with effective treatments for privacy violators, especially the big ones.”
Why the FTC’s Decision Is Good for Marketers
Collecting anyone’s personal data has come under scrutiny for years. Marketers face forces from a regulatory perspective and moves from big data collectors like Google and Apple that impact their ability to collect consumer data.
This news from the FTC merely reinforces the hard truth that marketers must now change the dynamics of consumer data collection practices and focus on first-party data, according to Rafaeil.
“This would mean,” she said, “shifting to adults and teens as the long-term targets. It will fall well within the guidelines, but designing applications for children at the cusp of adulthood will amount to more revenue since they are easier to attract.”
The FTC’s decision impacts marketers in a positive way, according to Kamyar Shah, fractional COO at Kamyar Shah. “They can learn from the mistake made by WW International with its Kurbo app and ensure that they don’t copy it in any way, shape or form,” he said. “Marketers have to be on their toes when it comes to marketing to children and stay on top of the rules and regulations surrounding these types of situations.”
Marketers must provide a robust mechanism to ensure that those choosing to sign up as parents are indeed parents and not just children pretending to be the parents, trying to bypass the age restriction, Shah added.
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Why the FTC’s Decision Is Bad for Marketers
Not all feel this is positive news for marketers. Adam Crossling, marketing consultant at Zenzero, said the FTC’s decision is likely to harm marketers around the USA because it “paints them negatively and focuses on their nature of exploitation.”
“The general audience perception,” Crossling added, “would be greatly shaped by this decision since marketers would be seen as a predator eyeing for their prey, i.e., children.”
This regulation has also narrowed the scope of the target audience for marketers as they can no longer run advertisements targeted at children aged 13 or below, he added.
“It would limit the scope of impulse buying, as kids tend to spend recklessly online without giving it much thought,” he said. “Marketers should take this regulation seriously and not find loopholes in the system that they could exploit. Marketing professionals should stray further away from creating or redirecting ads towards children.”
Marketers should also create a set of guidelines for their respective departments. This would ensure, Crossling added, that current and newcomers are well-aware of the updated regulations.