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Advocacy group accuses McDonald's, Subway of deceptive marketing

August 22, 2012

A coalition of children's, health, privacy and consumer advocacy organizations, led by the Center for Digital Democracy (CDD), has filed five separate complaints this week with the Federal Trade Commission, calling for an investigation into possible violations of the Children's Online Privacy Act (COPPA). Named as part of the investigation are McDonald's for its website, HappyMeal.com, and Subway's SubwayKids.com.

The CDD, along with the Consumer Federation of America, Center for Science in the Public Interest and the Privacy Rights Clearinghouse, also called on the commission to update its children's privacy rules to better protect youth from other forms of data collection, including the use of photos and "cookies."

In addition to McDonald's and Subway, other websites under investigation are General Mills' ReesesPuffs.com and TrixWorld.com, Viacom's Nick.com and Turner Broadcasting's CartoonNetwork.com.

According to the letter sent from the CDD, all of the child-targeted sites named in the complaints have been engaging in a form of digital peer-to-peer viral marketing known as "tell-a-friend" or "refer-a-friend" campaigns. Children participating in brand- or product-related games and activities are encouraged to share that experience with their friends, and asked to provide an email address of a friend, who is then sent a personalized online appeal to visit the site to try the game or activity.

For example, as the groups explained in a letter to the FTC, McDonald's HappyMeal.com invites a child to make a "music video" by uploading a picture or taking one using a webcam. The child's photo is digitally placed on the body of a cartoon character that dances along to music in a video, after which the child is encouraged to share the video with up to four friends by entering their names and email addresses. Each friend receives an email with the subject line, "You've been tagged for fun by a friend! Check it out! It's a Star in Video at the McDonald's Happy Meal Website."

According to the coalition, such tell-a-friend campaigns are "inherently unfair and deceptive when aimed at children, who often aren't even aware that they are being asked to generate advertising messages. The practices also violate existing privacy laws for children."

"It is very troubling that major companies as McDonalds, General Mills and Nickelodeon are collecting email addresses from children so they can send unsolicited marketing messages to their friends," said Georgetown Law Professor Angela Campbell. "These 'tell-a-friend' practices violate the Children's Online Privacy Protection Act because they are done without adequate notice to parents and without parental consent. The FTC should act promptly to stop this commercial exploitation of children."

Prof. Campbell, the co-director of the Institute for Public Representation at Georgetown Law School, serves as legal counsel to CDD and the other groups submitting the complaints.

Update to COPPA regulations

In addition to calling for an FTC investigation of the six children's websites, the consumer, privacy, and children's health organizations called for an updating of existing COPPA regulations to include data collection and behavioral targeting directed at children. Among the practices documented in an accompanying letter to the commission are the collection and storage of photographs online from children, as well as the placement of cookies used for types of behavioral advertising.

The following organizations joined with CDD in filing the complaints: the American Academy of Child and Adolescent Psychiatry, Berkeley Media Studies Group, Campaign for Commercial Free Childhood, Center for Media Justice, Center for Science in the Public Interest, Children Now, Consumer Action, Consumer Federation of America, Consumer Watchdog, ChangeLab Solutions, Global Action Project, Media Literacy Project, Privacy Rights Clearinghouse, Public Citizen, Public Health Advocacy Institute, Rudd Center for Food Policy & Obesity at Yale.

The complaints submitted are available at democraticmedia.org.

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