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Giants back child privacy rules

AOL and Microsoft agree to meet the online data collection standards of the children's advertising unit of the Council of Better Business Bureaus.

America Online (AOL) and Microsoft (MSFT) today backed Net privacy guidelines that say it's a no-no to collect private information from preteens without parental permission.

The new media giants aligned themselves with cereal companies and toy manufacturers by agreeing to help fund and meet the online data collection standards of the Children's Advertising Review Unit (CARU) of the Council of Better Business Bureaus. MediaLive, the producer of Surf Monkey, a Web browser and online service targeted at minors, also joined CARU today.

CARU's rules for marketing to children under age 12 were released last April.

The policy prohibits the use of cartoon characters or "kids' clubs" to sell products over the Net unless a site is labeled as advertising. To comply with the voluntary rules, sites also must "remind" young surfers to get parental permission before giving out information as well as clearly and prominently state that a child must get permission before making a purchase.

Like adults, many youngsters know their personal data is a commodity on the Net. They may exchange their name, address, and birth date for access to a game or free prizes, for example.

It is within the jurisdiction of the Federal Trade Commission to bust businesses for deceptive or unfair practices. Despite child advocates' efforts--and the existence of about 50 online privacy bills before Congress--no regulations have been adopted to explicitly outlaw soliciting valuable data from minors who troll the Net.

The bulk of the job of honoring consumers' online privacy has been left up to the industry, which pleases the big online players. However, the heat is on to gain wide acceptance of voluntary polices, or regulations could be passed.

"It is true that there will also be outliers, but the FTC, with its deception and unfair business practices laws, can already go after them," Elizabeth Lascoutx, director of CARU, said today.

Now that the two leading new media companies have joined, CARU is hopeful that others will follow. For example, AOL's partners that offer children's content will have to comply with the guidelines.

AOL admitted it violated the privacy of an adult member in January. The nation's largest online service was sued by a subscriber--Navy Senior Chief Timothy McVeigh (no relation to the Oklahoma city bomber)--for turning over his identity to a Navy investigator.

But when it comes to children, AOL would like to fare better. "We would like to be an industry leader, and lead by example," said Jill Lesser, AOL's deputy directory of law and public policy.