OpenX Technologies to pay $2 million for violating children’s privacy law

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FTC-lawsuit-Kochava-geolocation data

OpenX Technologies settled a complaint alleging that it violated the federal children’s privacy protection law.

The Federal Trade Commission (FTC) investigated OpenX and found that it failed to comply with the Children’s Online Privacy Protection ACT Rule (COPPA Rule) The California-based online advertising platform collected the personal information of children below 13 years old without parental consent.

Additionally, the FTC found that the company failed to flag child-directed apps that participated in the OpenX ad exchange. The company also passed children’s personal data to third parties that used child-directed apps to target ads for users. Its practices is a direct violation of the COPPA Rule.

The U.S. Department of Justice (DOJ) on behalf of the Commission sued OpenX for violating the COPPA Rule and the FTC Act by falsely claiming that it did not collect geolocation from users who opted out of such data collection.

According to the FTC, a $7.5 million civil penalty was entered against OpenX as part of a stipulated order to settle the case. It must pay $2 million to the Commision and the remaining monetary judgment will be suspended based on its financial situation.