IT'A SMALL WORLD AFTER ALL: HOW DISNEY'S TARGETED ADVERTISEMENTS IMPLICATE COPPA.

AuthorKorpita, Gianna
  1. Introduction

    The mission of the Walt Disney Company ("Disney") is "to be one of the world's leading producers and providers of entertainment and information." (2) Disney is ranked as one of the world's top ten most powerful brands and is certainly living up to that statement. (3) With 2018 revenues exceeding $55 billion, Disney has earned its spot as number 55 on the 2018 Fortune 500 list and number 176 on the 2018 Fortune Global 500 list. (4)

    Disney draws on treasured stories and characters from Disney, Pixar, and Marvel favorites to create interactive gaming experiences for "fans of all ages." (5) These gaming experiences are open to both children and adults, but require users to provide personal information such as email addresses, as well as enabling location tracking on mobile devices. (6) A recent class action lawsuit begs the question: what happens when the "fans of all ages" using the mobile applications include children under the age of privacy consent? (7) The plaintiffs allege that Disney mobile applications violate the law, by tracking users under the age of 13 without parental consent, in ways that facilitate "commercial exploitation." (8)

    As mobile applications become more prevalent and readily accessible in today's online marketplace, concern for children's privacy grows. (9) Children's apps often collect data about users without disclosing the practice to parents. (10) Device identification and usage, phone number, and geolocation are some of the items tracked by embedded software in the mobile applications resulting in a cause for parental concern. (11) This collected data can then be packaged in a detailed profile and transferred or sold to advertising companies and analytic providers. (12) In an attempt to regulate this data extraction process, the Children's Online Privacy Protection Act ("COPPA") puts parents in control of consent before companies can collect information through embedded software. (13) With this heightened protection for children, Disney is now in the spotlight, being accused of tracking children's habits through its mobile applications, without parental consent. (14) It may be no coincidence that the marketing and advertisements users receive are based upon Disney's embedded software in its mobile gaming applications that evade parental consent. (15)

    This Note will attempt to highlight the pending class action litigation against Disney by analyzing the legality of embedded software in Disney's mobile gaming applications under COPPA. First, this Note will undergo a history of the gaming industry and the regulations that have been enacted regarding online children's privacy. It will specifically focus on the 1998 COPPA regulation and the legislative history proceeding and anteceding its enactment. it will also provide a history of other litigation that has involved companies and COPPA violations. Second, this Note will present the creation and development of Disney's mobile applications and games, along with its financial strength in the entertainment industry. it will premise the mobile applications that are in question under the class action litigation. It will also premise the pleader's argument and the contrary argument of Disney. Then, this Note will analyze whether Disney has violated COPPA through its mobile gaming applications and the potential outcomes of the class action litigation. Finally, this Note will conclude with the likely outcome of settlement and what this result could mean for Disney and the mobile gaming industry.

  2. History

    1. History of the Gaming Industry

      In 1991, the World Wide Web ("Internet") was first introduced. (16) Computers were no longer simply used to send files back and forth between users; they became a gateway to an abundance of information that anyone could retrieve. (17) By the next year, Congress believed that the internet could be used for commercial purposes. (18) With the support of Congress, companies in all industries were quick to set up websites. (19) This would allow companies over the next few years to sell goods directly to consumers and increase their profit potential. (20) By 1993, the Internet became a part of the public domain, which allowed individual consumers to purchase monthly internet access through a service provider. (21) The public's new ease of access, combined with companies setting up websites, quickly expanded the Internet to an online marketplace for goods and services. (22)

      In addition to information access and a marketplace for goods and services, users embraced the Internet for gaming. (23) Since its commercial introduction in the 1950's, gaming has developed into one of the world's most profitable entertainment industries. (24) In the 1970's, Intel's invention of the first microprocessor for personal computers led to the implementation of the technology in in-home gaming consoles. (25) With numerous companies attempting to penetrate the market with their in-home consoles and games, the market quickly became saturated and the industry experienced the 1983 North American Video Game Crash. (26) With this crash, in-home gaming consoles were on the decline, and the popularity of home computers was on the rise and personal computer gaming took on a new life. (27) By the early 1990's, developments in personal computers brought about multi-player gaming, where multiple users on difference computers could play against each other. (28) With this, users saw the development of the Internet, and shortly thereafter, multiplayer gaming took on a new life. (29)

      Since the early 2000's, technological capabilities have greatly changed; the development of wireless internet, rapid computer processor technology, easier product accessibility, lower technology costs, and the development of smartphones and tablets have all contributed to the mobile gaming industry's success. (30) Mobile app stores entered the market in 2007 and changed the way people play games. (31) Entertainment at users' fingertips has widened the gaming demographics and brought the gaming industry to the forefront of technological developments. (32) In 2016 alone, the worldwide revenue of the mobile gaming market reached $40.6 billion. (33) Additionally, 37 percent of the revenue generated in the gaming industry was attributable to the mobile gaming segment. (34) For example, a popular mobile gaming app, "Angry Birds," made $200 million alone, and exceeded 2 billion downloads in 2014. (35)

    2. Foundation of COPPA

      So how does this affect children? (36) Kids under 13 spend an average of two hours per day playing mobile games. (37) Even before mobile gaming, however, the development of the internet raised concerns for children and their privacy. (38) Flashback to the 1993 public availability of the Internet. (39) The late 90's and early 2000's attracted many child users. (40) By 2001, 59 percent of children used the Internet. (41) In a time when more than half of children were using the Internet, online privacy became a greater concern for parents. (42) In the 1990's, online privacy protection for children centered around child pornography and an attempt to prohibit the exploitation of children under the age of consent. (43) With this growing concern from parents, Congress became involved. (44) With the internet being new to consumers there were no protections for children online, and as a response to this lack of protection, Congress passed the Children's Online Privacy Protection Act ("COPPA") on October 21, 1998. (45) Primarily enforced by the United States' Federal Trade Commission ("FTC"), it provided regulations for child safety and gathering personal information from a child under the age of 13 online. (46)

      In enacting COPPA, Congress extended the protection only to children under 13, recognizing that children specifically under this age are susceptible and vulnerable to overreaching by marketing and may not understand the safety and privacy issues created by disclosing their personal information online. (47) COPPA applies to "any person who operates a website located on the Internet.... who collects or maintains personal information from or about the users of or visitors to such website or online service". (48) These operators must obtain "verifiable parental consent" before they can collect information from children. (49) This consent means "any reasonable effort.... including a request for authorization for future collection, use, and disclosure.... to ensure that a parent of a child receives notice of the operator's personal information collection, use, and disclosure practices.... before that information is collected from that child." (50) This was the language that was passed by Congress in 1998 and was officially effective on April 21, 2000. (51)

      Between 2000 and 2012, technological advancements, including developments in mobile technology, raised additional concerns for parents and the Federal Trade Commission. (52) Mobile technology had not previously been addressed in the original COPPA enactment, and concerns grew about how to apply the enacted rules to mobile gaming operators. (53) On December 19, 2012, the Commission issued an amended COPPA rule which took effect on July 1, 2013. (54) Due to the advancements in technology from when the rule was first enacted, the amended rule provided for broader protection. (55) The amendment broadened the definition of what qualifies as a website or online service directed to children to include the scope of mobile applications. (56) The new rule makes it clear that "operator" covers an "operator of a child-directed site or service," which mobile applications would now fall under. (57) It also broadened the definition of personal information to include items such as geolocation and device identifiers, which were not around during the initial enactment. (58) The definition of "personal information" now includes "geolocation information and device identification, as well as photos, videos...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT