FTC Announces First COPPA Action Involving Connected Toys

A Hong Kong-based electronic toy manufacturer and its U.S. subsidiary agreed to pay the Federal Trade Commission (FTC) $650,000 to settle allegations that they violated the Children's Online Privacy Protection Act (COPPA) by collecting personal information from children without providing appropriate notice and consent, and by failing to take reasonable steps to secure the data that they collected. Notably, this is the FTC's first COPPA case involving connected toys, but it may not be its last, as connected toys continue to play a more prominent role in children's lives.

Background

The companies, VTech Electronics Limited, a Hong Kong corporation, and Illinois-based VTech Electronics North America, LLC (VTech), develop products and services for children, including electronic learning products (ELPs) and online games available through their ELPs or the Internet. The companies also develop and operate the Learning Lodge Navigator online service, which functions