Part of protecting a brand includes compliance efforts for advertising and websites in order to avoid unwanted regulatory attention. On September 6, 2012, the manufacturer of BMX bicycles—USA BMX/BMX Canada—agreed to modify its website in response to an inquiry by the Children’s Advertising Review Unit (“CARU”). See Sep. 6, 2012 CARU Press Release.
CARU is administered by the Council of Better Business Bureaus; the unit routinely monitors websites for compliance not only with federal law relating to children’s privacy but also with CARU’s self-regulatory program.
BMX Website Not Screened for Children 13 and Under
The BMX matter involved an advertisement in Sports Illustrated Kids Magazine that featured children riding BMX bicycles. The advertisement invited children to race their bikes at different locations in the U.S. in connection with a special event. Readers could register for the event at BMX’s website. This website registration allowed visitors to post their first and last names, email addresses, and passwords. The site did not screen registrants to determine whether they were age 13 or older prior to collecting that information.
The Federal Trade Commission’s current regulation under the Children’s Online Privacy Protection Act (COPPA) imposes restrictions on companies that operate websites or provide online services directed at children under the age of 13, and those companies that have actual knowledge that they are collecting personal information online from children under 13. In addition to those federal requirements, CARU has guidelines relating to advertising directed towards children. Upon receiving CARU’s initial inquiry, USA BMX / BMX Canada stated that it would bring the website into compliance with COPPA and CARU’s guidelines.
The FTC and Children’s Privacy
This matter demonstrates the importance of coordinating a brand’s advertising and a company’s website for compliance not only with federal requirements but also with industry guidelines. CARU is a self-regulatory organization. If a company decides not to participate or if it refuses to change its advertising after an adverse decision, the matter can be referred to the Federal Trade Commission. The FTC takes children’s privacy matters very seriously, most recently shown by its consent order settling a case with RockYou, which included a civil penalty of $250,000. See March 27, 2012 FTC Press Release and Consent Decree.