FTC Fines OpenX Technologies $2 Million for Violation of Privacy Laws
FTC Determines OpenX Violates COPPA Privacy Laws
After a lengthy investigation, the Federal Trade Commission (FTC) found OpenX Technologies, Inc. (“OpenX”) to be guilty of multiple violations of federal privacy laws, most notably the Children’s Online Privacy Protection Act (COPPA), which resulted in fines of approximately $2 million dollars.
DOJ Files Complaint Claiming OpenX Violates COPPA and Other Privacy Laws
OpenX Technologies is an advertising company located in California that is well-known for providing advertising services and a real-time bidding platform. Real-time bidding platforms generally refer to the act of buying and selling advertising inventory on a per-impression basis by auction. Such platforms generate revenue by monetizing websites or mobile apps via the sale of ad space.
On December 15, 2021, the Department of Justice, on behalf of the Federal Trade Commission, filed a complaint against OpenX alleging that the company knowingly collected the personal information of children under the age of thirteen without properly notifying parents or acquiring parental consent as required by COPPA.
FTC Fines OpenX for COPPA Violations and Sale of Sensitive Data
While OpenX argued that it did not directly provide services to children, the FTC found that OpenX had reviewed the terms of hundreds of mobile applications that they provided service to, with the mobile applications properly noting that their intended audiences were children under thirteen, but despite this, OpenX still failed to properly label these applications as being targeted toward children. By not doing so, not only did OpenX violate key provisions of COPPA but it further violated privacy laws by then proceeding to sell such sensitive data to third parties. Furthermore, beyond its COPPA violations, OpenX also improperly tracked the sensitive data of its users, specifically geolocation data, even if users chose to opt out of the collection of such location-tracking data.
As a result, the FTC has not only fined OpenX $2 million but has also ordered OpenX to delete ALL data it has collected to serve targeted ads. OpenX will also be required to implement a new privacy program that ensures and demonstrates strict compliance with COPPA as well as the cessation of collection and retention of personal data of children under thirteen.
Key Takeaways on Charges Against OpenX Violation of COPPA
The FTC recently found OpenX Technologies guilty of violations of federal privacy laws. Specifically, Open X was:
Found guilty of violating key provisions of COPPA and other federal privacy laws;
Fined $2 million dollars for such violations and ordered to implement a new privacy program; and
Ultimately ordered to delete the data it had collect to serve targeted ads.
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