Vtech settles FTC lawsuit over children’s data privacy
Two years ago, kids electronics maker Vtech suffered a data breach that exposed the personal info of five million customers (over half of whom were not adults). Naturally, the DOJ on behalf of the FTC brought a lawsuit against the company for violating online privacy laws for children, becoming the first such case involving Internet-connected toys. Today, Vtech agreed to pay a $650,000 fine as part of a settlement with the FTC.
Back in 2015, a hacker had broken in to Vtech’s systems and taken data from users who had registered accounts on the company’s ‘Learning Lodge’ app store. The DOJ complaint filed on behalf of the FTC that Vtech failed to directly notify product owners (i.e. parents) that they were storing data from users (i.e. children), nor collect the former’s consent to do so. Thus, the company violated the Children’s Online Privacy Protection Act (COPPA). The FTC also accused Vtech of failing to protect the data it acquired.