Children’s Advertising Review Unit Findings Should Not Be Ignored by App Developers

April 2019

The Children’s Advertising Review Unit (CARU), a self-regulatory advertising program approved by the Federal Trade Commission (FTC) under the Children’s Online Privacy Protection Act of 1998 (COPPA), recently found issues with the advertising approach taken by two mobile applications that happen to feature cats: KleptoCats and My Talking Tom. The contrast between the outcomes of these cases illustrates the perils of ignoring CARU.

In the self-regulatory review of the KleptoCats application, developed by HyberBeard, CARU and the Online Internet-Based Advertising Accountability Program found that third-party companies were collecting data through the app in a way that conflicted with CARU guidelines. After CARU's attempts to contact HyberBeard were ignored, the two organizations jointly referred the matter to the FTC. This referral could result in an FTC enforcement action and substantial monetary penalties, as seen in the recent FTC $5.7 million settlement with Musical.ly, which also originated from a CARU referral (discussed here in a March alert).

CARU's review of the My Talking Tom app led to quite a different outcome. CARU found that many advertisements within the application, such as ads for prescription drugs or teen-rated video games, were inappropriate for children and not clearly labeled or identified as ads. CARU felt that these in-app advertisements blurred the line between advertisements and game content in a way that would be misleading to children. Additionally, the application’s privacy policy included advertising and animated promotional images that CARU determined distracted from the policy and did not comply with COPPA requirements. CARU conveyed these concerns to the developer, Outfit 7 Ltd., which agreed to comply with CARU’s recommendations by removing the offending advertising and promotional images from its privacy policy and initiate a process of making ad disclosures clearer.    

These CARU cases provide reminders regarding advertising in mobile applications. First, even as advertising evolves across new media, the premise of advertising law remains the same: advertisements that hide the fact that they are advertisements are deceptive and misleading. Second, the FTC is not the only concern for businesses. CARU and other self-regulatory programs carry weight too, and responding to their concerns can help to prevent future issues with the FTC.

CARU’s press releases relating to the two mobile applications are available here for Kleptocats and here for My Talking Tom.

If you are unsure whether your business complies with COPPA or other applicable requirements or you would like guidance on how to respond to any inquiries from CARU or similar programs, please contact one of our Cybersecurity & Data Privacy attorneys.

Firm Highlights
Client Alert

Model COBRA Notices Under the American Rescue Plan Act

More
Client Alert

Federal Appellate Court Determines a Website Is Not a “Place of Public Accommodation” Under the ADA

More
Diversity & Inclusion

Two Lewis Rice Members Selected for Leadership Council on Legal Diversity Programs

More
Client Alert

EEOC Issues Updated Guidance on COVID Vaccination Policies

More
News

Meghan S. Largent and Lindsay S. C. Brinton Negotiate $700,000 Award to Cobb County, Georgia Landowners in Rails-to-Trails Case

More
Client Alert

Temporary COBRA Changes Under the American Rescue Plan Act

More
Client Alert

Missouri Supreme Court Reverses Overtime Wages Judgment Resulting from Employer-Mandated Screenings Under the Portal-to-Portal Act

More
Client Alert

Supreme Court Hands Down Unanimous Decision Limiting FTC’s Ability to Seek Monetary Relief

More
Diversity & Inclusion

Law Firm ILN-telligence Podcast Hosts Ronald A. Norwood to Discuss Mentorship, Diversity & Inclusion in the Legal Industry, and the Importance of Equity for All

More
Client Alert

The New Standard Contractual Clauses: Scope, Impact, and Next Steps

More
News

Lewis Rice Welcomes 2021 Summer Associates

More
Client Alert

CROWN Act Legislation on the Verge of Passage in St. Louis City & County

More
News

Jeremy P. Brummond Presents at Webinar for Experienced Construction Attorneys

More
Diversity & Inclusion

Lewis Rice Member Ronald A. Norwood Serves on Missouri Bar’s Special Committee on Lawyers of Color to Establish Diversity, Inclusion Programs

More
Client Alert

Public Access to Electronic Court Records in Missouri

More
News

Jeannine Moentmann Becomes President of St. Louis Paralegal Association for 2021-2022

More
Client Alert

DOL Publishes Cybersecurity Guidance for Benefits Plans

More
News

Brian P. Pezza Gives Advice on Vaccination Acceptance in the Workforce in Society for Human Resource Management Article

More
Client Alert

The Changing Workplace Following the Latest CDC Mask Guidance

More
Client Alert

COVID-19 Rescue Plan Act Expands Paid Leave Availability but Does Not Revive Employer Mandates

More