Boston, MA 09/23/2014 (wallstreetpr) – The U.S. Federal Trade Commission (FTC) filed a complaint against the services of Yelp Inc (NYSE:YELP) at the U.S. District Court, California. According to the FTC, the Company violated series of rules including the COPPA (Children’s Online Privacy Protection Act).
The Company used their apps and accepted the registration of children with age group of below 13 for their services.
Therefore, the FTC charged the Company of violating the COPPA Rule and failed to obtain the parenteral consent over its information practices while collecting and using the personal information of children.
As a result, Yelp Inc (NYSE:YELP) accepted the complaint and ready to pay $450,000 for the settlement of charges on its services.
A faulty registration process
Yelp Inc (NYSE:YELP) registered their users through their website before 2009, which clearly prohibited the users who are under the age of 13. But, in 2009, the Company introduced the new mobile apps for the registration process and failed to implement the screening mechanism that prohibits underage people.
Consequently, it allows the users including children to register their account through this application in both iOS and Android versions. So, the registered data till April 2013 clearly specify from their date of birth that children are below the age group.
Yelp Inc (NYSE:YELP) claimed that birth dates are optional in nature, so it depends on the users whether they need to put the information or not. In addition, only 0.2% users who registered during the period have underage according to their date of birth. So, the Company believed that most of the users are adult who is using the services of the Company.
Proposed settlement
Yelp Inc (NYSE:YELP) accepted that the mobile apps have some faults that failed to disallow the underage people from registration process. The Company reached a settlement with the FTC and paid the fees for the violation of COPPA rules. The Company also accepted that it will destroy the underage children‘s personal information within 30 days as per the proposed settlement.
