Yelp settled allegations on Thursday that it improperly collected children's personal information, meaning that the online review site will pay hundreds of thousands of dollars to rectify the situation, The Consumerist reported.
The Federal Trade Commission announced that Yelp agreed to pay a $450,000 civil penalty to settle charges it violated against the Children's Online Privacy Protection Act (COPPA), which requires that any company collecting personal information from children must get explicit consent from parents and clearly disclose how the information is used.
According to the complaint, from 2009 to 2013, Yelp was not in line with the rules set forth by COPPA. Instead, the company allegedly collected the personal information from children through its app without first notifying parents and getting consent.
Because the Yelp mobile app registration process includes a step in which users must enter their birthday, the FTC charges that the company was aware of the issue.
An investigation found that several thousand members provided a date of birth showing they were under 13 years of age, and Yelp continued to collect information, such as their names, location, email addresses and subsequent reviews.
Although Yelp has an age-screen mechanism on its website, by allowing young users to register on the mobile app, they were able to access the web version too.
The FTC found the company failed to implement a functional age-screen in its app and did not adequately test said apps for issues.
Yelp must pay the $450,000 civil fine under the settlement and must delete information it collected from consumers who stated they were 13 years of age or younger. Additionally, the company must submit COPPA compliance reports to the FTC for one year.
In another, similar incident, the FTC announced a settlement in which mobile app company TinyCo will have to pay a $300,000 civil penalty for violating the same COPPA Rule.
The FTC alleges that through the use of themes appealing to children, brightly colored animated characters and simple language, TinyCo targeted customers under the age of 13 and, in some instances, collected personal information from those children.
