By Brendan Sasso - 08/01/12 04:33 PM EDT
The FTC will now accept comments on the proposal and is expected to finalize the rules by the end of the year.
Stephen Balkam, CEO of the Family Online Safety Institute, called the proposal "a good next step" and said the FTC is doing its "best to adapt to new technologies."
Ioana Rusu, regulatory counsel for the Consumers Union, said the proposed ules "would close some loopholes and give parents the peace of mind that their children aren’t being tracked on websites designed for kids without permission."
The proposal would also ban ads on children's websites from installing tracking files, known as cookies, on users' computers.
Advertisers install cookies to track users' browsing history and display targeted ads to them.
The proposal acknowledges that some websites are aimed at both children and adults.
The update would allow sites to create a log-in page for users to reveal whether they are older than 13. Users younger than 13 would still be able to access the sites, but the sites would face restrictions on the use of the children's information.
Adam Thierer, a senior research fellow for the Mercatus Center, said the FTC is wading into murky legal territory.
"The question that remains to be asked is will COPPA be applied to ESPN.com or USAToday.com," Thierer said. "I assume many kids are interacting on those sites."
He noted that general audience sites can pose more dangers to children than sites specifically tailored for young audiences. But he said the FTC risks constitutional challenges if it goes too far in restricting the public's access to websites.
The FTC's proposed rules on mixed-audience sites could lay out a legal roadmap for Facebook, which is looking to expand to children younger than 13.
Andrew Noyes, a Facebook spokesman, said the company appreciated the opportunity to submit comments on the proposal.
"We commend the Commission for leading this thoughtful review process and we look forward to evaluating its most recent proposal," Noyes said.
Thierer said the FTC deserves credit for not trying to expand COPPA to cover children older than 13.
The Do Not Track Kids Act, introduced by Reps. Edward Markey (D-Mass.) and Joe Barton (R-Texas), would toughen COPPA's privacy safeguard and extend certain protections to teens between 13 and 17.
In a statement, Barton said the FTC's proposed changes are a "step in the right direction," but he said the stronger protections of his Do Not Track Kids Act are still needed.
"I will continue to stress the importance of allowing consumers to have control over their personal information, and I hope that more of my colleagues will join me in this effort,” Barton said.