FTC Urges Rules on Getting Info From Kids Online

WASHINGTON — The Federal Trade Commission on Friday strongly pushed online marketers to obtain parental permission before collecting personal information from children surfing the Internet.

FTC Commissioner Christine Varney, speaking at the end of four days of privacy hearings, said rules are needed to protect children from online marketers who collect names and addresses from kids and then sell the data to outside parties.

“If you intend to collect information about kids and sell it without consent--no,” Varney said, adding that she thinks three of five commissioners would support a rule preventing such collection.

She said she would seek guidelines that apply to children 11 and under.

Compounding the pressure on marketers Friday was the disclosure that a presidential task force is preparing similar recommendations. The task force is planning to urge federal action if marketers fail to obtain parental permission before collecting personal data from kids. The task force report is due July 1.

Self-regulatory measures adopted by the industry encourage marketers to obtain parental permission but do not require it.

Privacy activists have been seeking rules that would ban the collection of data from kids without parental permission. They argue that clever marketers are exploiting children with colorful Web sites and offers of prizes or other rewards.

One advocacy group told the FTC that of 38 kid-oriented Web sites surveyed, 90% sought personal information from children and 20% advise kids to get permission from parents. No site required parental permission.

On one Web site, young visitors were asked to answer 20 questions about themselves, including their name, address and interests, in order to receive a compact mirror. On another Web site, children were asked for the same information to receive free candy.

“This is happening under the radar of many parents,” said Elizabeth Montgomery of the Center for Media Education, which conducted the survey. “If we don’t have effective intervention now, I can envision hard-sell direct-response messages” to children.

Privacy activists told the FTC that software designed to prevent kids from visiting sites that collect personal information is cumbersome for parents to use and is easily defeated. Next-generation software that would offer parents greater control won’t be available for another year.

Representatives of Internet companies told the FTC on Thursday that they are taking steps to protect children’s privacy. William W. Burrington, assistant general counsel of America Online, the nation’s largest computer online service, said the service makes available software that allows parents to restrict where their children go within AOL and whether they can receive e-mail. He said less than 50% of parents use it.

“We are not happy with that,” he said. “We want to improve that.”

AOL has established new rules for its kids’ area that require advertisers to obtain permission before collecting information from kids. He said, however, that some sites haven’t complied because of previous contractual agreements and that AOL is working with those companies to comply.

AOL and representatives of four other online marketers--Time Warner, KidsCom, Yahooligans! and Digital Marketing Services--told the FTC they would not sell their lists of Web users.

“You are acting responsibly,” Varney said. “What should we do about the people who are not here? What should we do about everybody else?”