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DMA Leads Business Community in Asking FTC for Extension to Implement COPPA Rule Changes


Post Date: April 23, 2013
By: Susan Taplinger

Washington, DC, April 23, 2013The Direct Marketing Association (DMA) today led the business community in sending a letter to the Federal Trade Commission (FTC) asking that the Commission extend the effective date for the amendments to the Children’s Online Privacy Protection Act (COPPA) Rule from July 1, 2013 to January 1, 2014.  DMA was joined in signing the letter by eighteen additional trade associations reflecting a broad cross-section of online content and service providers — including the US Chamber of Commerce, Association of National Advertisers, Motion Picture Association of America, National Association of Broadcasters, and National Retail Federation, among others.

The FTC announced its update to the COPPA Rule in December 2012, providing only a six-month period for implementation of the changes by the business community.  Taken together, the amendments extend the reach of the COPPA Rule to a range of data practices and data-collecting entities that were not previously subject to COPPA.  In particular, the Final Rule makes first-party operators liable for third-party data collection activities that benefit the first party.  Third parties will also be liable if they have actual knowledge that they are collecting personal information on a site or service that is directed to children.  DMA prepared a full analysis of the amendments for its members at the time of release. 

In today’s letter, DMA noted that its members have been working diligently to absorb the impact of the COPPA Rule amendments and to implement its new obligations, but in doing so have found that the amendments significantly impact the long-standing business model that these companies have relied upon in planning the capabilities of their products and services since COPPA’s inception.  DMA also noted that implementation has been challenging without the benefit of the FTC’s promised Frequently Asked Questions (FAQ), which are not expected until early May 2013.

“A modest delay until January 1, 2014 will allow the business community to ‘get it right’ the first time, and fully implement strategies for compliance with the COPPA Rule to guide their businesses for years to come,” DMA stated in the letter.

For more information, please contact Rachel Thomas, DMA’s vice president of government affairs.

The full text of DMA’s letter to the FTC follows below.

April 23, 2013

 

Donald S. Clark, Secretary

Federal Trade Commission

600 Pennsylvania Ave. N.W.

Washington, D.C. 20580

RE:      Extension of Time for Compliance with Amendments to the Children’s Online Privacy Protection Rule

 Dear Secretary Clark:        

            The undersigned trade organizations respectfully request that the Federal Trade Commission (the “FTC” or “Commission”) extend the effective date for the amendments to the Children’s Online Privacy Protection Rule (“COPPA Rule” or the “Rule”) from July 1, 2013 to January 1, 2014.  Collectively, we reflect a broad cross section of online content and service providers.  We wish to detail for you some of the difficulties that our members have encountered in preparing for the July 1st deadline that have necessitated this request.

            Our members have been working diligently to absorb the impact of the Rule and to implement its new obligations.  As responsible citizens of the business community, our members have been engaged in a long-term review of their own products and services since the initial notice of proposed rulemaking in September 2011, through the second round of additional proposed amendments in August 2012, culminating in the final amendments released in December 2012.  In fact, the undersigned trade associations and many of our individual members have been actively engaged in the process from its inception, by providing comments in response to all three rounds of solicitation for comments issued by the Commission, participating in the Commission’s public events on the topic, and engaging with the Commission through smaller group discussions and meetings.

            Despite this record of engagement and advocacy, as the Commission is aware, the final amendments released in December 2012 contained several unanticipated material changes from previous versions.  The expansion of data elements that are considered to be “personal information” have brought a number of new entities under the Rule, and expanded obligations for entities that were already subject to the existing Rule.  In many cases, the amendments contained in the COPPA Rule significantly impact the long standing business model that these companies have relied upon in planning the capabilities of their products and services since COPPA’s inception.  This has made the redesign of products and services, often occurring at the mid-stream point in product development cycles, a complex and difficult task.

Despite our members’ efforts to understand the impact of the entire amended COPPA Rule on their businesses, and to integrate these changes within their organizations, many unanswered questions remain open in the Internet community.  While our members appreciate the staff’s willingness to host public events to answer general questions about implementation of the Rule and to meet with smaller groups to discuss specific questions and concerns, implementation has been challenging without the benefit of the Commission’s FAQs, which are not expected until early May.  We expect that the FAQs will help explain how some of the nuances of the Rule are intended to be implemented, which will likely necessitate modifying new and existing products and services.  

Our members have expressed frustration at the short timeline for implementation.  In practice, product development cycles and strategic planning can last for extended periods of time, over the course of years in many cases.  For products already on the marketplace, determining how to retool and update software, and then pushing those software updates to market, is a time consuming process.  Making large-scale changes to products already in development presents an enormous challenge to the business community, especially in light of the many questions about implementation that remain regarding the COPPA Rule.

The amendments to the COPPA Rule warrant thorough consideration and careful planning.  In the dozen years since COPPA was enacted, the Rule has been subject to review three times, reflecting careful deliberation by the Commission over potential changes to it.  A modest delay until January 1, 2014 will allow the business community to “get it right” the first time, and fully implement strategies for compliance with the COPPA Rule to guide their businesses for years to come.

Thank you for your consideration.  We look forward to working with the Commission on these important issues.

 

Respectfully submitted,

 

American Advertising Federation

American Association of Advertising Agencies

Association of National Advertisers

Direct Marketing Association

Electronic Retailing Association

Entertainment Software Association

Interactive Advertising Bureau

MPA – The Association of Magazine Media

Motion Picture Association of America

National Association of Broadcasters

National Cable & Telecommunications Association

National Retail Federation

NetChoice

Newspaper Association of America

Online Publishers Association

Retail Industry Leaders Association

Software & Information Industry Association

Toy Industry Association

US Chamber of Commerce

 

About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing.  Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques.

In 2012, marketers — commercial and nonprofit — spent $168.5 billion on direct marketing, which accounts for 52.7 percent of all ad expenditures in the United States.  Measured against total US sales, these advertising expenditures generated approximately $2.05 trillion in incremental sales.  In 2012, direct marketing accounted for 8.7 percent of total US gross domestic product and produces1.3 million direct marketing employees in the US.  Their collective sales efforts directly support 7.9 million other jobs, accounting for a total of 9.2 million US jobs.

DMA’s most current initiative is the Data Driven Marketing Institute (DDMI), which advances and protects data-driven marketing by engaging the entire industry in a coordinated campaign to set the record straight about the countless ways that data-driven marketing benefits consumers and fuels the data-driven economy.

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