FTC Imposes Unprecedented Fine for Violations of Children’s Online Privacy Rules

Operators of the video social networking app Musical.ly have agreed to pay a record penalty of $5.7 million to settle an enforcement lawsuit brought by U.S. Federal Trade Commission (FTC). The lawsuit alleged that Musical.ly violated the U.S. federal Children’s Online Privacy Protection Act (COPPA) by failing to notify parents about the app’s collection and use of personal information from users under 13, obtain parental consent before such collection and use, and delete personal information at the request of parents.

Musical.ly’s app allowed users to create short videos lip-syncing to music and share those videos with other users. Registering users were required to provide an email address, phone number, username, first and last name, a short biography, and a profile picture. In addition to creating and sharing videos, the app allowed users to interact with other users by commenting on their videos and sending direct messages.

The FTC indicated that operators of the Musical.ly app had actual knowledge that a significant percentage of its 65 million users in the U.S. were younger than 13. In addition, the operators of Musical.ly allegedly received thousands of complaints from parents that their children under 13 had created accounts.

User accounts on Musical.ly were public by default, such that a child’s profile bio, username, picture, and videos could be seen by other users. The FTC’s complaint noted public reports of adults trying to contact children via the Musical.ly app.
The settlement also requires the app’s operators to comply with COPPA, and to take offline all videos made by children under the age of 13.

CLICK HERE to read the FTC’s proposed settlement with Musical.ly.