Advertising Platform OpenX Agrees to Injunctive Relief and $2 Million Payment in Case Alleging Violations of Children’s Privacy Law
Online advertising platform OpenX Technologies Inc. (OpenX) has agreed to a court order requiring it to pay $2 million and to be bound by injunctive relief provisions mandating its compliance with the Federal Trade Commission (FTC) Act and Children’s Online Privacy Protection Act (COPPA) Rule. This stipulated order resolves a lawsuit the government filed against OpenX in the U.S. District Court for the Central District of California.
The government alleged that OpenX’s Ad Exchange platform, which connects publishers of websites and mobile applications (apps) with advertisers who wish to display targeted advertisements, collected and maintained location data and other personal information from children under 13 without parental notice and consent and facilitated the use of that data for targeted advertising on hundreds of child-directed apps. According to the complaint, OpenX violated the FTC Act by misrepresenting its data collection policies as having been implemented with consumer consent, when such consent was frequently lacking, and also by misrepresenting its compliance with the COPPA Rule. The complaint alleges that OpenX violated the COPPA Rule by failing to provide notice to parents and by failing to obtain verifiable parental consent before collecting personal information from children or allowing third-party advertising networks to do so.
“Americans should be able to visit websites and use mobile apps with confidence that their privacy — and their children’s privacy — is being protected,” said Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division. “The Department of Justice and Federal Trade Commission are committed to ensuring that the digital advertising industry complies with federal privacy law.”
“OpenX secretly collected location data and opened the door to privacy violations on a massive scale, including against children,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Digital advertising gatekeepers may operate behind the scenes, but they are not above the law.”
The stipulated order requires OpenX to pay a civil penalty of $2 million and bars OpenX from committing future violations of the COPPA Rule or making related misrepresentations. It also prohibits OpenX from collecting location information without first obtaining express affirmative consent, mandates the deletion of data that OpenX collected in the past and requires OpenX to maintain a comprehensive program to protect the privacy of data collected from consumers and their devices.
The FTC referred this case and proposed stipulated order to the Department of Justice. The case was handled by attorneys in the Civil Division’s Consumer Protection Branch, including Trial Attorneys Zachary Dietert and David Crockett and Assistant Director Lisa Hsiao, in conjunction with attorneys at the FTC’s Division of Privacy and Identity Protection.