FTC fines HyperBeard $150,000 for illegally collecting children’s data

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Federal Trade Commission (FTC) fines video game publisher HyperBeard $150,000 for illegally collecting children’s data

You shouldn’t and can’t save children’s data!!! This is not much difficult to understand but companies have over the years been disregarding this basic tech tenet with impunity. First, it was TikTok who is being investigated by Dutch privacy watchdog for collecting children’s data and allowing access to children. Now it is the turn of children’s video game publisher, Hyperbeard has been fined $150,000 for collecting children’s data illegally.

The U.S. Federal Trade Commission (FTC) had fined children’s app developer HyperBeard for $4 million but the company pleaded it only had $150,000 to pay for allegedly collecting children’s data in an unlawful way. The (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) U.S. antitrust law and the promotion of consumer protection including privacy.

On June 4, the Joseph Simmon’s led FTC announced that HyperBeard had agreed to pay a fine of $150,000. FTC also said that Hyperbeard will all the information it had collected from children under the age of 13 in order to settle allegations against it.

FTC’s actions come after a complaint was filed by the U.S. Department of Justice on behalf of the FTC. The complaint alleged that Hyperbeard was collecting children’s data in basic violation of the Children’s Online Privacy Protection Act Rule (COPPA Rule).

The complaint also alleged that Hyperbeard collected the data through third-party ad networks which deployed persistent identifiers on KleptoCats and some of its other child-themed apps. According to the complaint, Hyperbeard had given these identifiers to ad networks to display targeted ads to HyperBeard’s children app users.

FTC contends that Hyperbeard did not follow laid down norms like notifying the parents or obtaining their consent before collecting the data.

The FTC alleges that HyperBeard was aware that children were using its kids’ apps and promoted those same apps to children. From early 2017 through 2019, it promoted its apps on the kids’ entertainment website YayOMG. It also published children’s books and licensed other products, including stuffed animals and block construction sets, based on its apps’ characters.

As part of the proposed settlement, HyperBeard, Kozachenko, and Uribe are required to notify and obtain verifiable consent from parents for any child-directed app or website they offer that collects personal information from children under 13. They are also prohibited from using or benefitting from personal data they collected from children under 13 in violation of COPPA, and must destroy that data. The settlement includes a $4 million penalty, which will be suspended upon payment of $150,000 by HyperBeard due to its inability to pay the full amount. The full amount will be due if either the company or Kozachenko are found to have misrepresented their finances.

FTC Press Statement

HyperBeard will henceforth have to strictly follow the COPRA norms. The company along with the company’s CEO and managing director must gain parental consent before they collect information on an app or website that they market to children.

In addition to deleting all data unlawfully collected under COPPA, the company must also pay a $150,000 fine in lieu of a $4 million penalty, an amount which the app developer said it’s unable to pay.

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