Greater Privacy Regulation For Children Online Will Impact Data Collection

by Tristan Hugo-Webb 0

In the coming weeks, federal regulators fromthe Federal Trade Commission are expected to outline new ruleswhich will make collecting information from children’s onlineactivities much more difficult without parental consent. MaryEngle, the associate director of the advertising practices divisionat the Commission states, “Today, almost every child has a computerin his pocket and it’s that much harder for parents to monitor whattheir kids are doing online, who they are interacting with, andwhat information they are sharing.” She continues, “The concern isthat a lot of this may be going on without anybody’sknowledge.”

The current federal rule, the Children’s Online Privacy ProtectionAct of 1998, has become outdated due to new technological advances,say privacy advocate groups, despite the rule mandating the needfor websites to obtain parental permission to collect sensitivepersonal information from children under 13. For example, under theexisting rule, no regulation existed monitoring the use of webcamsand online photography. However, regulators are expected to mandatethat companies seeking children under 13 to submit photos ofthemselves online would require parental consent.

Generation Z children are the most computer and Internet literategeneration in history, and with new technologies and applicationscontinually produced that involve the exchange of personalinformation, privacy rules are vital. While no one is debating theimportance of maintaining the safety of children, both online andoffline, the new rules could potentially have a substantial effecton the payment industry, particularly for firms involved in thecollection of information and social media websites.

The growing number of Generation Z online users means that themarket represents a potential goldmine for online realtors andmarketers. The new rules, however, will likely change the abilityof firms to accurately target and market their goods and servicesfor the teen and pre-teen markets online. While the added securityin the new regulations will provide for children is important, itwill slow the growth and development of payment-relatedtechnologies for this emerging demographic.