The Federal Trade Commission announced a settlement with VTech Electronics Limited and its U.S. subsidiary in the FTC’s first case involving Internet-connected toys.
VTech had been charged with violating the FTC Act and the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children without providing direct notice and obtaining their parent’s consent, as well as failing to properly secure the data it collected. The settlement includes a payment of $650,000 in civil penalties, injunctive relief, and the establishment of a comprehensive security program.
VTech, a Hong Kong corporation, and VTech Electronics North America, advertise, market and distribute electronic learning products (ELPs). The companies offer online games available through the ELPs and operate the Learning Lodge Navigator online service, a platform similar to an app store that allows customers to download child-directed apps, games, e-books and other online content. As of November 2015, approximately 2.25 million parents had created accounts with Learning Lodge for nearly 3 million children, according to the FTC.