The U.S. Federal Trade Commission (FTC) today announced<\/a> a settlement of $150,000 with HyperBeard, the developer of a collection of children’s mobile games over violations of U.S. Children’s Online Privacy Protection Act Rule (COPPA Rule<\/a>). The company’s applications had been downloaded more than 50 million times on a worldwide basis to date, according to data from app intelligence firm Sensor Tower.<\/p>\n A complaint<\/a> filed by the Dept. of Justice on behalf of the FTC alleged that HyperBeard had violated COPPA by allowing third-party ad networks to collect personal information in the form of persistent identifiers to track users of the company’s child-directed apps. And it did so without notifying parents or obtaining verifiable parental consent, as is required. These ad networks then used the identifiers to target ads to children using HyperBeard’s <\/a> games.<\/p>\n The company’s lineup included games like Axolochi, BunnyBuns, Chichens, Clawbert, Clawberta, KleptoCats, KleptoCats 2, KleptoDogs, MonkeyNauts and NomNoms<\/a> (not to be confused with toy craze Num Noms)<\/a>.<\/p>\n The FTC determined HyperBeard’s apps were marketed toward children because they used brightly colored, animated characters like cats, dogs, bunnies, chicks, monkeys and other cartoon characters, and were described in child-friendly terms like “super cute” and “silly.” The company also marketed its apps on a kids’ entertainment website, YayOMG<\/a>, published children’s books and licensed other products, including stuffed animals and block construction sets, based on its app characters.<\/p>\n Unbelievably, the company would post disclaimers to its marketing materials that these apps were not meant for children under 13.<\/p>\n Above: A disclaimer on the NomNoms game website. <\/em><\/p>\n In HyperBeard’s settlement with the FTC, the company has agreed to pay a $150,000 fine and delete the personal information it illegally collected from children under the age of 13. The settlement had originally included a $4 million penalty, but the FTC suspended it over HyperBeard’s inability to pay the full amount. But that larger amount will become due if the company or its CEO, Alexander Kozachenko, are ever found to have misrepresented their finances.<\/p>\n The complaint explained that HyperBeard let third-party advertising networks serve ads and collect personal information in the form of persistent identifiers, in order to serve behavioral ads — meaning, targeted ads based on users’ activity over time and across sites.<\/p>\n This requires parental consent, but companies have skirted this rule for years — or outright ignored it, like YouTube did.<\/p>\n The ad networks used in HyperBeard’s apps included AdColony, AdMob, AppLovin, Facebook Audience Network, Fyber, IronSource, Kiip, TapCore, TapJoy, Vungle and UnityAds. Despite being notified of the issue by watchdogs<\/a> and the FTC, HyperBeard didn’t alert any of the ad networks that its apps were directed towards kids, not to make changes.<\/p>\n The issues around the invasiveness of third-party ad networks and trackers — and their questionable data collection practices — have come in the spotlight thanks to in-depth reporting<\/a> about app privacy issues, various privacy experiments<\/a>, petitions<\/a> against their use and, more recently, as a counter-argument to Apple’s marketing of its iPhone as a privacy-conscious device<\/a>.<\/p>\n![\"\"](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-04-at-5.47.29-PM.png?w=680\")
<\/p>\n![\"\"](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/06\/Image-from-iOS-12.png?w=314\")
HyperBeard is not the first tech company to be charged with COPPA violations. Two high-profile examples preceding it were YouTube and Musical.ly (TikTok)’s settlements of $170 million<\/a> and $5.7 million<\/a>, respectively, both in 2019. By comparison, HyperBeard’s fine seems minimal. However, its case is different from either video platform as the company itself was not handling the data collection — it was permitting ad networks to do so.<\/p>\n
![\"Screen](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-04-at-6.07.54-PM.png?w=730&crop=1\")
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Contact Information:<\/b>
Sarah Perez<\/p>\n
Tags:<\/b>![\"image\"](\"\")
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<\/a>, Wire<\/a>, United States<\/a>, English<\/a><\/p>\n
Contact Information:<\/h3>\n
Sarah Perez<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
The U.S. Federal Trade Commission (FTC) today announced a settlement of $150,000 with HyperBeard, the developer of a collection of children’s mobile games over violations of U.S. Children’s Online Privacy Protection Act Rule (COPPA Rule). The company’s applications had been downloaded more than 50 million times on a worldwide basis to date, according to data from app … Continue reading FTC fines kids’ app developer HyperBeard $150K for use of third-party ad trackers<\/span><\/a> Continue Reading →<\/span><\/a><\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,22,54],"tags":[],"class_list":["post-20779","post","type-post","status-publish","format-standard","hentry","category-english","category-united-states","category-wire"],"yoast_head":"\nFTC fines kids\u2019 app developer HyperBeard $150K for use of third-party ad trackers - Business<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/ipsnews.net\/business\/2020\/06\/05\/ftc-fines-kids-app-developer-hyperbeard-150k-for-use-of-third-party-ad-trackers-3\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FTC fines kids\u2019 app developer HyperBeard $150K for use of third-party ad trackers - Business\" \/>\n<meta property=\"og:description\" content=\"The U.S. Federal Trade Commission (FTC) today announced a settlement of $150,000 with HyperBeard, the developer of a collection of children’s mobile games over violations of U.S. Children’s Online Privacy Protection Act Rule (COPPA Rule). 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