A two-year investigation into online child protection concluded Tuesday, with several large firms paying a combined $835,000 settlement with the New York Attorney General's office. The firms – Viacom, Mattel, Hasbro, and JumpStart Games – were found to have been allowing third parties to track children’s Internet activity through their websites, using trackers such as cookies and IP addresses.
A press release from the office of the New York State Attorney General, Eric T. Schneiderman noted that the companies promptly took measures to fix the problem when they were notified. But even if they were unaware of the tracking that was going on, they were fined because federal law stipulates that they – rather than third-party advertisers – are responsible for any breaches of the law.
The investigation also flagged a problem with a Federal Trade Commission-approved program that Hasbro had used to protect children’s privacy. The FTC, a federal agency responsible for consumer protection, lays out very strict rules for the collection of data from children under age 13 under the Children’s Online Privacy Protection Rule (COPPA). It approves several "safe harbor" programs, including the one employed by Hasbro, to bring website data policies into compliance with COPPA regulations. Given that Hasbro had used an approved program, they were not fined following the investigation.
The response to this investigation has highlighted a growing disparity between Americans’ concern for the protection of children and their increasingly casual attitude toward tracking activities aimed at adults.
Adults may accept being tracked because they believe there is no way around it. Facebook and Google, both of which monetize their data by targeting ads based on users’ browsing history, are communication and information staples. Google gets more than 3.5 billion searches per day, while 1.13 billion people logged on to Facebook daily in June.
Simon Jones, a marketer in California, believes “you can’t protect your privacy in today’s world,” no matter what laws are in place. If everyone is being tracked, it almost doesn't matter, he told KQED News, an NPR-member radio station, since "you disappear into an ocean of names and numbers."
Is there a difference between tracking children and adults? The purpose of tracking remains the same. Advertising pays for consumers to use many online services for free. The ability to target that advertising using data keeps costs down for advertisers, while potentially increasing returns by improving the relevance of the ads that sites show consumers.
For some, the distinction hinges on the idea that children are particularly susceptible to advertising – all the more so when it is targeted at their particular interests.
"Is it fair to allow advertising to an audience that is too young to recognize commercial messages are biased and have a persuasive intent?" asked Dale Kunkel, a professor of communication at the University of Arizona, while speaking to the American Psychological Association about a report he authored in 2004. He explained that children viewing online content are often excessively persuaded by the ads because they lack adult skills to interpret the content.
By contrast, there’s an expectation that adults are capable of resisting advertising, no matter how targeted it becomes.
According to Ryan Calo, a professor at the University of Washington’s School of Law, that distinction is actually less than clear. Taking a long-term view of advertising trends, his 2013 paper, “Digital Market Manipulation,” suggested that all consumers will eventually need to be protected from the increasing savvy of corporations that gather personal data about them.
In the paper, he argued, “Firms will increasingly be able to trigger irrationality or vulnerability in consumers – leading to actual and perceived harms that challenge the limits of consumer protection law, but which regulators can scarcely ignore.”
In his view, the more consumer data corporations can use, the more they can personalize users’ experience, a phenomenon that can have both positive and negative consequences. As advertising improves, it may be able to find the things consumers need in places they have yet to look: better flights, cheaper hotels, or more convenient grocery stores.
Alternatively, websites may be able to profit from your weaknesses, driving up prices of children’s toys as your kids' birthdays get closer, or saving the most powerful advertising for times when it knows you have historically made impulse purchases.
If advertising pays for content, and tracking users makes advertising seem like a worthwhile investment, then is there any way around it? Dr. Calo has a controversial solution: paying for ad-free internet use.
“[Usage] fees may be the best way to both protect consumers and fund the tools we all use online,” The Atlantic summarized his position in 2013.