Yelp Settles U.S. Suit Over Collecting Data on Children

Yelp Inc., the online customer-review service, said it paid $450,000 to settle a U.S. regulator’s lawsuit accusing it of collecting names and e-mail addresses from children as young as 9 without the consent of their parents.

The Federal Trade Commission alleged in its complaint that from 2009 to 2013, San Francisco-based Yelp violated privacy laws by gathering the information from children who signed up for an account and that the company failed to test the age-registration feature on its applications.

Yelp said yesterday that the situation stemmed from a “bug” in its mobile registration process that let children under 13 sign up to post reviews.

“Only about 0.02 percent of users who actually completed Yelp’s registration process during this time period provided an underage birth date, and we have good reason to believe that many of them were actually adults,” Yelp said in a blog post.

Yelp said it fixed the problem and closed affected users’ accounts. The company was ordered not to disclose the personal information it collected and to submit a compliance report in a year detailing methods to obtain parental consent to gather minors’ information and avoid collecting kids’ data, according to the settlement agreement filed in court yesterday.

The commission’s suit against Yelp follows earlier cases against Google Inc., Apple Inc. and Amazon.com Inc., which were accused of failing to get parental consent for purchases made by children with mobile devices.

Apple agreed in January to pay $32.5 million to consumers and Google agreed to pay at least $19 million. Amazon is fighting the agency’s claim.

Yelp, whose privacy policy says its service isn’t directed at children under 13, didn’t disclose the practice, notify parents or obtain parental consent, in violation of the 1998 Children’s Online Privacy Protection Act, according to the FTC complaint.

The case is U.S. v. Yelp, 14-04163, U.S. District Court, Northern District of California (San Francisco).

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