United States v. Yelp Inc., N.D. Cal., case no. 3:14-cv-04163

On September 16, 2014, the Federal Trade Commission (“FTC”) brought a complaint against Yelp Inc for violation of  Children’s Online Privacy Protection Act (COPPA) Rule, 16 C.F.R. Part 312.

16 C.F.R. Part 312 applies to any operator of a commercial website or online service that has actual knowledge that it collects, uses, and/or discloses personal information from children. Among others, the Rule mandates that website operators meet specific requirements prior to collecting online, using, or disclosing personal information from children, in order to strengthen their personal information protection.

Yelp, which allows users to search for and review local businesses, provided the possibility to register for and access Yelp’s service through an Internet website and mobile applications.

While users’ registration through the website was possible only after a screening mechanism to prohibit users under the age of 13 from registering, Defendant failed to implement a functional age-screen mechanism in the new in-app registration feature. As a result, the Yelp App accepted registrations from users who input dates of birth indicating they were under the age of 13.

According to the Complaint “All users who completed registration, including those who provided birth dates indicating that they were under 13, were granted full access to the Yelp service through the Yelp App and the Yelp website. For example, they could add information to their personal profiles, including photos, their current city, hometown, and any other information they chose to provide in free-form text fields”.

Since users provided birth dates indicating that they were under 13, the FTC deemed Yelp to have “actual knowledge” under the COPPA Rule that it was collecting information from several thousand children under 13, and violated COPPA Rule by not providing the required data protection.

As a result, Yelp, Inc. agreed to settle FTC charges by paying a $450,000 civil penalty.

FTC complaint can be found here. Open Pdf

Order for Injunction and Civil Penalty Judgment can be found here. Open Pdf