Tech companies warn privacy rules will kill innovation

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Wireless carrier trade group CTIA warned that the revision could hinder the ability of children to participate in "positive and valuable Internet-based experiences."

The FTC is looking to update the Children’s Online Privacy Protection Act (COPPA), which restricts the ability of websites to collect information from children younger than 13.

COPPA was passed by Congress in 1998, before the rise of smartphones and mobile apps. The FTC unveiled a proposal in August that would expand the law to cover not only websites, but also games, apps, ad networks and other online plug-ins.

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 update would allow sites that are aimed at children and adults 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.

Comments on the proposal were due on Tuesday by midnight, and the agency is still posting the responses online.

Even the Center for Democracy and Technology, a consumer advocacy group that usually pushes for tougher privacy protections, warned the update would "impose massive burdens" on general audience websites and could restrict free-speech rights.

"We agree that more should be done to stop unwanted behavioral advertising to children, but the proposed Rule significantly overreaches and raises real concerns for free expression and innovation in online services for children, older minors, and adults," the group wrote in its filing.

CDT, along with many of the other commenters, worried that third-party content that is not aimed at children could fall under the law's restrictions.

"For widgets and other embedded third party content, the responsibility for complying with COPPA should fundamentally lie with first parties who have the direct relationship with users, except in the rare circumstances when a plugin purposefully targets children or has actual knowledge that it's collecting children's information," CDT wrote.

But Reps. Edward Markey (D-Mass.) and Joe Barton (R-Texas), both hawks on online privacy protection, applauded the FTC's proposal.

Markey said the update is "necessary to adequately protect children" and that it is consistent with the intent of Congress in enacting COPPA.