The Federal Trade Commission has obtained an order against education technology provider Edmodo for collecting personal data from children without obtaining their parent’s consent and using that data for advertising, in violation of the Children’s Online Privacy Protection Act Rule (COPPA Rule), and for unlawfully outsourcing its COPPA compliance responsibilities to schools.
Under the proposed order, filed by the Department of Justice on behalf of the FTC, Edmodo, Inc. will be prohibited from requiring students to hand over more personal data than is necessary in order to participate in an online educational activity. This is a first for an FTC order and is in line with a policy statement the FTC issued in May 2022 that warned education technology companies about forcing parents and schools to provide personal data about children in order to participate in online education. During the course of the FTC’s investigation, Edmodo suspended operations in the United States. The order, if approved by the court, will bind the company, including if it resumes U.S. operations.
“This order makes clear that ed tech providers cannot outsource compliance responsibilities to schools, or force students to choose between their privacy and education,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Other ed tech providers should carefully examine their practices to ensure they’re not compromising students’ privacy.”
In a complaint, also filed by DOJ, the FTC says Edmodo violated the COPPA Rule by failing to provide information about the company’s data collection practices to schools and teachers, and failing to obtain verifiable parental consent. The COPPA Rule requires online services and websites directed to children under 13 to notify parents about the personal information they collect and obtain verifiable parental consent for the collection and use of that information.
Until approximately September 2022, California-based Edmodo offered an online platform and mobile app with virtual class spaces to host discussions, share materials and other online resources for teachers and schools in the United States via a free and subscription-based service. The company collected personal information about students including their name, email address, date of birth and phone number as well as persistent identifiers, which it used to provide ads.
Under the COPPA Rule, schools can authorize collection of children’s personal information on behalf of parents. But a website operator must provide notice to the school of the operator’s collection, use and disclosure practices, and the school can only authorize collection and use of personal information for an educational purpose.
Those teachers and schools that did read Edmodo’s terms of service were falsely told that they were “solely” responsible for complying with the COPPA Rule. The terms of service also failed to adequately disclose what personal information the company actually collects or indicate how schools or teachers should go about obtaining parental consent. These failures led to the illegal collection of personal information from children, according to the complaint.
In addition, Edmodo could not rely on schools to authorize collection on behalf of parents because the company used the personal information it collected from children for a non-educational purpose—to serve advertising. For such commercial uses, the COPPA Rule required Edmodo to obtain consent directly from parents.
Edmodo also violated the COPPA Rule by retaining personal information indefinitely until at least 2020 when it put in place a policy to delete the data after two years, according to the complaint. COPPA prohibits retaining personal information about children for longer than is reasonably necessary to fulfill the purpose for which it was collected.
In addition to violating the COPPA Rule, the FTC says Edmodo violated the FTC Act’s prohibition on unfair practices by relying on schools to obtain verifiable parental consent. Specifically, the FTC says that Edmodo outsourced its COPPA compliance responsibilities to schools and teachers while providing confusing and inaccurate information about obtaining consent. This is the first time the FTC has alleged an unfair trade practice in the context of an operator’s interaction with schools.
The proposed order with Edmodo includes a $6 million monetary penalty, which will be suspended due to the company’s inability to pay. Other order provisions, which will provide protections for children’s data should Edmodo resume operations in the United States, include:
- prohibiting Edmodo from conditioning a child’s participation in an activity on the child disclosing more information than is reasonably necessary to participate in such activity;
- requiring the company to complete several requirements before obtaining school authorization to collect information from a child;
- prohibiting the company from using children’s information for non-educational purposes such as advertising or building user profiles;
- banning the company from using schools as intermediaries in the parental consent process;
- requiring the company to implement and adhere to a retention schedule that details what information it collects, what the data is used for and a time frame for deleting it; and
- requiring Edmodo to delete models or algorithms developed using personal information collected from children without verifiable parental consent or school authorization.
The Commission voted 3-0 to refer the civil penalty complaint and proposed federal order to the Department of Justice. The DOJ filed the complaint and stipulated order in the U.S. District Court for the Northern District of California.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendant is violating or is about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.
The lead FTC attorneys on this matter are Gorana Neskovic and Peder Magee from the FTC’s Bureau of Consumer protection.
originally published at Finance - RSVTV news