Last week, the FTC was warned that the rules due to take effect in April 2000, implementing the Children's Online Privacy Protection Act, could have significant effects on the ability of marketers and media companies to offer Web content aimed at kids.
At a daylong FTC workshop, participants said that tough standards on obtaining "verifiable" parental consent for information will make kids' sites economically unviable for all but the largest players and render site content boring or disenfranchising to children.
The law requires commercial sites aimed at children under 13 to seek "verifiable" parental consent to collect or post personally identifiable information, including a child's e-mail address, though a site can reply to a child's request for a specific e-mail or send a newsletter.
The FTC's job now is to determine what makes for "verifiable parental consent."
"We want to make sure the rules and regulations don't pick the winners and losers [of Internet sites]," said Jeff Richards, executive director of the Internet Alliance.
Parry Aftab, a lawyer who specializes in children's Internet issues, said children's sites that are bigger than mom-and-pop operations but smaller than those of large "conglomerates" have some of the best content for kids on the Web.
"You don't want to drive them out of business," she said.
Jorian Clarke, president of Circle 1 Network/Kids.com, noted the difficulty her Web site has had in trying to comply with the new law.
"We have learned that all parents don't read English and not all have credit cards," she said. "You have to look at the non-traditional family."
Children's privacy advocates suggested that voluntary efforts haven't worked and the legislation requires the FTC to impose strong standards.
Kathryn Montgomery, president of the Center for Media Education, said a recent study by her group showed nearly a fourth of the most popular Web sites for kids post no privacy policies.
Marketers and media companies urged the agency to take a sliding-scale approach to the requirement, with the extent to which sites have to verify determined by what use the sites make of the information.
A site that posts a child's artwork or comments and asks a parent for permission to identify the writer or artist might face less scrutiny than a site that lets children talk in real time or uses the information to market to kids.
A SLIDING SCALE
"A sliding scale is important," said Kris Bagwell, senior VP of MTV Networks Online. "Where you monitor what [kids' comments] will be put on a bulletin is different than when you are talking in real time."
Lee Peeler, associate director of the FTC's division of advertising practices, said the agency intends to offer Web site operators a variety of choices for obtaining parental consent.
"We are not looking for one way. Our goal is to offer the industry a range of