The Department of Justice, together with the Federal Trade Commission (FTC), today announced that KuuHuub Inc., a Canadian corporation, and two Finnish corporations, Kuu Huub Oy and Recolor Oy, have agreed to a settlement to resolve alleged violations of the FTC Act and the Children’s Online Privacy Protection Act of 1998 (COPPA) associated with the companies’ “Recolor” mobile app and digital coloring book.
In a complaint filed in the U.S. District Court for the District of Columbia, the United States alleged that the Recolor app included a “kids” category targeted at children, and that defendants also obtained actual knowledge that children 13 years old and younger were using and accessing the Recolor app not only to color images but also to use the app as a social media platform for communicating. The complaint further alleges that the Recolor app collected personal information of these child users without attempting to obtain verifiable parental consent, thus violating COPPA.
As reflected in the stipulated order entered by the court today, the defendants have agreed to a civil penalty of $3 million, with a payment of $100,000 due within a specified timeframe and the remainder suspended pending compliance with the order’s other provisions and based on ability-to-pay considerations. The order also prohibits the defendants from engaging in the challenged practices going forward and requires them to notify customers about the alleged violations; to delete children’s personal information currently in their possession; to seek the deletion of information held by third-party ad networks; to allow refunds requested by any current subscribers who were underage at sign-up; and to meet recordkeeping, certification and compliance obligations.
This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Marcus P. Smith of the Civil Division’s Consumer Protection Branch. Kerry O’Brien and Evan Rose represented the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.