Rounding out 2020 a federal court right before Christmas squelched a significant litigation concerning alleged violations of children’s privacy rights brought against the operator of a video sharing platform and channel operators (including Cartoon Network, Inc., DreamWorks Animation LLC, Hasbro Studios LLC, and Mattel, Inc., among others). Hubbard, 2020 U.S. Dist. LEXIS 239936 (N.D. Cal. 2020). The court held that plaintiff’s common law privacy and other state law claims were preempted by the Children’s Online Privacy Protection Act (“COPPA”). However, it was not a complete win for defendants—the court allowed the plaintiffs “the opportunity to amend the complaint to allege facts showing that Defendants’ conduct amounts to more than solely a violation of COPPA’s requirements.” Read on below.
Particularly with COVID-related shutdowns, the popularity of video sharing platforms has reached an all-time high this year. For many of them, as was the case in this litigation, any individual can share videos through use of various social media accounts without registering with the video sharing platform itself. Often, there is no age verification required to view videos. As parents already know, it is commonplace for companies that manufacture and market products for children (e.g., toy companies) to upload content such as music videos, videos of kids unwrapping toys, and the like. As parents may not already know, however, the operators of those video sharing platforms collect the personal information of users through the use of cookies. These can track websites a user has visited and the amount of time spent on those websites, among other things. This information is then utilized and sold for advertising purposes (as allegedly occurred in Hubbard with the personal information of kids viewing video content produced by defendants).
Which is where COPPA comes in. What is COPPA? Generally speaking, it provides that “[i]t is unlawful for an operator of a website or online service directed to children, or any operator that has actual knowledge that it is collecting personal information from a child, to collect personal information from a child in a manner that violates the regulations prescribed [by the Federal Trade Commission].” 15 U.S.C. § 6502(a). COPPA applies to any operator of a commercial website or online service directed to children under thirteen years of age that collects, uses, and/or discloses personal information from children.
Additionally, the FTC has interpreted COPPA’s definition of “website or online service” to include individual channels on a general audience platform—according to the FTC, “content creators and channel owners” are both “standalone ‘operators’ under COPPA, subject to strict liability for COPPA violations.” (emphasis added). In order to determine whether a website or online service is “directed to children” the FTC is to “consider [the website’s or online service’s] subject matter, visual content, use of animated characters or child-oriented activities and incentives, music or other audio content, age of models, presence of child celebrities or celebrities who appeal to children, language or other characteristics of the Web site or online service, as well as whether advertising promoting or appearing on the Web site or online service is directed to children.” 16 CFR § 312.2.
COPPA contains a preemption provision: “[n]o State or local government may impose any liability for commercial activities or actions by operators in interstate or foreign commerce in connection with an activity or action described in this chapter that is inconsistent with the treatment of those activities or actions under this section.” 15 U.S.C. § 6502(d) (emphasis added).
Well, in Hubbard the parties agreed for purposes of defendants’ motion to dismiss that all of plaintiffs claims are premised on violations of COPPA (although plaintiff argued that their claims allege independent state law violations fully consistent with, but not identical to, COPPA). Defendants contended that plaintiff’s claims were preempted under Section 6502(d) of COPPA.
While plaintiff asserted that: (1) COPPA’s statutory text only preempts state laws that are “inconsistent” with COPPA, (2) the application of the state laws claims brought by plaintiff was not “obstacles” to the enforcement of COPPA, and (3) the state laws at issue did not make it “impossible” for defendants to comply both with COPPA and the state laws, the court disagreed. The reason for this was simple: the court held that the plain text of the statute “clearly indicates Congress’s desire to expressly preempt plaintiffs’ state law claims.”
Another day, another privacy litigation bites the dust at the pleadings stage (although stay tuned to see if plaintiff amends the complaint). While there is not yet a broadly applicable federal privacy law, the patchwork of federal privacy laws (including COPPA) will continue to impact the course of privacy litigations involving state law claims. CPW will be there. Stay tuned.