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United States of America v. LAI Systems

United States District Court for the Northern District of California

Case No 2:15-cv-9691 (2015)

Facts

The Federal Trade Commission (FTC) (plaintiff) brought a complaint against LAI Systems, LLC (LAI) (defendant), alleging that LAI violated the Children’s Online Privacy Protection Act of 1998 (COPPA). Specifically, the FTC alleged the following. (1) LAI distributed mobile apps to consumers, including apps that were targeted at children under age 13. (2) LAI generated revenue by permitting third-party advertisers to collect personal data from the apps’ users. Specifically, LAI permitted advertisers to collect users’ persistent identifiers, which under COPPA were data points that could “be used to recognize a user over time and across different Web sites or online services,” including cookies, internet protocol (IP) addresses, and device identifiers. (3) LAI did not disclose to the advertisers that LAI’s apps were targeted at children. (4) Further, LAI did not provide adequate notice of the data collection to its child users or their parents, and it did not receive the parents’ consent for such collection. The FTC claimed that this alleged conduct violated COPPA.

Rule of Law

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Issue

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Holding and Reasoning

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