Reasons for Settlement

This statement accompanies the Consent Decree executed by defendant The Ohio Art Company, in settlement of an action brought to recover penalties and other equitable relief from the defendant for engaging in acts or practices in violation of the Commission's Children's Online Privacy Protection Rule), 16 C.F.R. Part 312. (the "Rule").

Pursuant to Section 5(m)(3) of the Federal Trade Commission Act, as amended (15 U.S.C.  45(m)(3)), the Commission hereby sets forth its reasons for settlement by entry of a Consent Decree and injunction:

On the basis of the allegations contained in the attached Complaint, the Commission believes that the payment of $35,000 in civil penalties by the defendant constitutes an appropriate amount upon which to base a settlement. The amount should assure compliance with the law by defendant and by others who engage in practices covered by the Rule. Further, defendant is permanently enjoined from engaging in acts or practices that are prohibited by the Rule. With the entry of such Consent Decree the time and expense of litigation will be avoided.

For the foregoing reasons, the Commission believes that the settlement by entry of the attached Consent Decree with The Ohio Art Company is justified and well within the public interest.