Barbie toymaker Mattel is one of several top children's brands who  illegally allowed marketers and advertisers to use their Web sites to spy on kids. (Photo: Getty)

Barbie toymaker Mattel is one of several top children’s brands who illegally allowed marketers and advertisers to use their Web sites to spy on kids. (Photo: Getty)

Barbie, Hot Wheels, American Girl and other top toy brands with their own Internet web sites were allowed by toymakers to be used illegally to spy children under the age of 13 on behalf of marketers and advertisers, a sweeping investigation has discovered.

Viacom, Mattel, JumpStart Games, Inc. and Hasbro are among the companies caught in the crackdown.

Other brand-related sites snared by the probe include Neopets (JumpStart) and My Little Pony, Littlest Pet Shop, and Nerf (Hasbro).

The companies violated the federal “Children’s Online Privacy Protection Act (COPPA),” according to New York State Attorney General Eric Schneiderman. His office conducted the two-year investigation, dubbed “Operation Child Tracker.”

How Targeted Advertising and Tracking Works
Most online shoppers have encountered advertisements for a product that seem to follow them from web site to web site. These advertisements are known as online behavioral advertisements or OBA. It’s a form of targeted advertising that selects an advertisement to serve to an individual based on previously collected information about that individual, such as the individual’s Internet browsing history, demographic information, or personal interests. One of the most common tracking technologies used for OBA is the web browser cookie, a small text file sent by a web site to a user’s computer and stored by the user’s web browser. Every time the user connects to the web site’s server, all of the cookies stored by that web site on the user’s computer are retrieved and their values are transmitted to the server. Where a third party is integrated into many web sites, cookies can be used to track a user’s browsing history across those web sites; each time a user visits a web site that incorporates the third party, the user’s browser will transmit information from the user’s cookie to the third party, thereby notifying the third party of the user’s visit to the web site.

Schneiderman said “dozens” of companies were engaged in illegal activities. They agreed to collectively pay $835,000 in fines and adopt comprehensive reforms to end the practice.

The first-of-its-kind investigation discovered that web sites operated by these companies were home to tracking technology that illegally allowed third-party marketers and advertising companies to track children’s online activity.

“Federal law demands that children are off-limits to the prying eyes of advertisers,” Schneiderman said in a statement.

“Operation Child Tracker revealed that some of our nation’s biggest companies failed to protect kids’ privacy and shield them from illegal online tracking,” he added.

Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection, said her office worked closely with the New York Attorney General’s office.

“These settlements send a strong message to companies about the importance of complying with the COPPA Rule,” she said.

Businesses, parents, and policymakers need to be more vigilant about protecting the online privacy of kids, added Ariel Fox Johnson, Senior Policy Counsel at Common Sense Media, which educates families about online privacy and security.

Specifically, the federal law prohibits the unauthorized collection of children’s personal information on “child-directed” web sites targeted at children under the age of 13.

In the future the companies must regularly monitor sites for third-party tracking technology, vet third-party data collection practices and provide notice of the law to third-parties, according to the settlement.

Viacom was ordered to pay $500,000; Mattel $250,000 and JumpStart $85,000. Hasbro participated in an FTC-approved “safe harbor” program and will not pay a penalty, Schneiderman said.

The illegal practices were found to be widespread.

For example, all 26 of Mattel’s web sites were involved, featuring content for young children, including online games, animated cartoons and downloadable content such as posters, computer desktop wallpaper and pages for young children to color.

The case was handled by Bureau of Internet and Technology Assistant Attorney General Jordan Adler, Deputy Bureau Chief Clark Russell, Bureau Chief Kathleen McGee, and Director of Special Projects Vanessa Ip. The Bureau is overseen by Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.

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