-Caveat Lector- Government Finalizes Rules Protecting Kids Online October 20, 1999 WASHINGTON (AP) -- The government said today that for the next two years it will allow businesses on the Internet to send e-mail to parents for permission to ask personal questions of their children but only if that information is not shared with other companies. That compromise was among the most contentious provisions within the Federal Trade Commission's ruling on how it will enforce a new law aimed at protecting the privacy of children under 13 on the Internet. The FTC's ruling, approved 4-0 by commissioners, is expected to have a dramatic impact on hundreds of popular Internet sites aimed at children, which typically offer online games and entertainment in exchange for personal information that is valuable to marketers. The FTC decided that Web sites that share personal information disclosed by children with other companies must obtain a parent's permission through mailed or faxed paperwork, calls to a toll-free number, a credit-card number or e-mail that uses cutting-edge digital signature technology. The agency will begin enforcing the new rules in April. "There's a real problem out there," FTC Chairman Robert Pitofsky said today. "We're going to give the industry six months to get its act together to make changes. After that, we'll monitor these Web sites and we'll take enforcement action." The new law, the Children's Online Privacy Protection Act, requires operators of commercial Web sites to obtain consent from parents before asking children under 13 for their names, addresses, telephone numbers or other identifying information. "The FTC did a good, balanced job," said Ron Plesser, an attorney who worked with the Direct Marketing Association and other groups. "Everything's a compromise -- it's not all great for industry, but it resolves some major concerns." Jason Catlett of Junkbusters Corp., who has harshly criticized the FTC on privacy issues, praised the agency for a "remarkably good job, particularly considering the complexity of the technologies and given the intensity of the industry's lobbying for loopholes." "The intent of Congress and the common sense expectations of parents seemed to have survived intact," Catlett said. The problems facing regulators involve the faceless nature of the Internet, where children often know more about the technology than their parents and can easily impersonate an adult with a few mouse clicks. Pitofsky said that in two years the FTC will reconsider whether e-mail can be more widely used to seek a parent's permission, as techniques improve for ensuring the identity of e-mail authors. It's currently simple to impersonate another person -- or a parent _ using e-mail. "We wanted to leave elbow room to account for emerging technologies," Pitofsky said. The industry, which generally supported the privacy law, warned regulators that imposing barriers that are too onerous between a child and his favorite Web site might discourage kids from spending time online. But Pitofsky said rules requiring a parent to mail or fax their permission -- a process that could take days -- will be in effect "only if the company has in mind collecting the information, sorting it out and renting it. That is a sensitive enough area that the more rigorous approaches are justified." The FTC also will prohibit a company from using online games or prizes to entice children into disclosing "more personal information than is reasonably necessary." And it requires companies to allow parents to review and delete their child's information, and to refuse to allow further collection or use of those types of details. The new law does not require companies to obtain a parent's permission to collect children's e-mail address to send them information on a one-time basis, such as a digital coupon for a video game. The FTC also decided not to require companies that have already collected information online to ask parents to continue using their children's names and e-mail addresses. The privacy law, enacted in October 1998, was prompted by an FTC study last year of 1,400 Web sites, including one where children were asked to give their names, addresses, e-mail addresses and ages and say whether they ever received gifts of stocks, cash, savings bonds or certificates of deposit. Copyright 1999 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. ======================= Robert F. Tatman Computer Help Desk Desktop & LAN Services Systems Department Philadelphia Newspapers, Inc. 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