FTC Settles with Children’s Gaming Company For Falsely Claiming To Comply With International Safe Harbor Privacy Framework

Washington, DC - A children’s online entertainment company has agreed to settle Federal Trade Commission charges that it falsely claimed it was abiding by an international privacy framework known as the U.S.-EU Safe Harbor that enables U.S. companies to transfer consumer data from the European Union to the U.S. in compliance with EU law.

According to a complaint filed by the FTC, Fantage.com, the maker of a popular multiplayer online role-playing game directed at children ages 6-16, deceptively claimed, through statements in its privacy policy, that it held current certifications under the U.S.-EU Safe Harbor framework. The U.S.-EU Safe Harbor framework is a voluntary program administered by the U.S. Department of Commerce in consultation with the European Commission.

To participate, a company must self-certify annually to the Department of Commerce that it complies with the seven privacy principles required to meet the EU’s adequacy standard: notice, choice, onward transfer, security, data integrity, access, and enforcement. A participant in the U.S.-EU Safe Harbor framework may also highlight for consumers its compliance with the Safe Harbor by displaying the Safe Harbor certification mark on its website.

The FTC complaint charges Fantage.com with representing that it held a current Safe Harbor certification, even though the company had allowed its certification to lapse. The Commission alleged that this conduct violated Section 5 of the FTC Act.  However, this does not necessarily mean that the company committed any substantive violations of the privacy principles of the Safe Harbor framework or other privacy laws.

Under the proposed settlement agreement, which is subject to public comment, the company is prohibited from misrepresenting the extent to which it participates in any privacy or data security program sponsored by the government or any other self-regulatory or standard-setting organization.

Consumers who want to know whether a U.S. company is a participant in the U.S-EU Safe Harbor program may visit http://export.gov/safeharbor to see if the company holds a current self-certification.

This case is being brought with the valuable assistance of the U.S. Department of Commerce. The company was also the subject of complaints filed in 2013 by Chris Connolly and Galexia, Inc.

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