|The Center for Regulatory Effectiveness
11 Dupont Circle NW
Washington, DC 20036
A Private Sector Proposal to the FTC to Protect the Online
Privacy of Children
The Federal Trade Commission has initiated a rulemaking proceeding to determine whether
FTC should grant its seal of approval to a private company's "self-regulatory
guidelines" to ensure compliance with the Children's Online Privacy Protection Act
(15 U.S.C. § 6501 et seq.).
The Act is designed to ensure that parents are afforded the opportunity to control the
way websites collect and use information pertaining to website users who are children.
PrivacyBot.com, a private company, is now seeking FTC approval of a service it has created
to streamline website compliance with the new statutory requirements. PrivacyBot.com
would, for websites which buy their service, provide the required notices and assist in
dispute resolution. Detailed information about the FTC rulemaking may be obtained at
CRE believes, as a general policy matter, that federal agencies such as the FTC should
subject any self-regulatory mechanisms to the "good government" laws including
Executive Order 12866 -- Regulatory Planning and Review, and the Regulatory Flexibility
There are a number of aspects of the PrivacyBot.com proposal which should be reviewed
from the consumer's viewpoint. Because consumers using subscribing websites would rely on
PrivacyBot.com's service to obtain the privacy protections mandated by Congress, CRE
believes that the FTC should address the following issues before approving this or any
- The "mediation" that would be offered by the service would not involve a human
mediator, which raises the question of whether it is "mediation" as the
term is commonly understood. PrivacyBot.com would not actively mediate disputes between
websites and users. Instead, the website and the user would communicate directly with each
other through an electronic channel provided by PrivacyBot.com. Either party would have
the absolute right to unilaterally "dismiss" the user's complaint. In practical
terms, an aggrieved user would simply send an e-mail containing his or her complaint
directly to the website and hope that the website would take action. A website would have
the right, under the PrivacyBot.com service, to simply ignore the complaint.
- The self-regulatory service under consideration by the FTC, would "require"
consumers to read through more than 30 pages of procedures, terms and conditions in order
to fully understand their rights. Arguably this could place an undue burden on the average
consumer (i.e., parent) who has a relatively straightforward complaint about a website's
violation of a children's online privacy requirement.
- The service being considered by the FTC could lead consumers to believe that their
rights are limited to the e-mail complaint procedure ("mediation") described
above. There is a need for parents to easily understand that they have the right to take
their complaints directly to the FTC.