WASHINGTON, D.C. — The Federal Trade Commission will allow certain websites to use age-verification tools without facing enforcement under a federal children’s privacy rule, while separately securing a $100 million settlement with Walmart over alleged deceptive pay practices affecting delivery drivers.
What This Means for You
- Some websites may collect limited information solely to verify a user’s age without first obtaining parental consent, if strict conditions are met.
- The FTC voted 2-0 on both actions.
- Walmart agreed to a $100 million judgment and new compliance requirements tied to its Spark Driver program.
FTC Policy on Age Verification and COPPA
On Tuesday, the FTC issued a policy statement announcing it will not bring enforcement actions under the Children’s Online Privacy Protection Rule, known as COPPA, against certain operators that collect, use, or disclose personal information solely to determine a user’s age using age-verification technologies.
COPPA requires operators of commercial websites or online services directed to children under 13 — or those with actual knowledge they are collecting personal information from a child under 13 — to notify parents about their information practices and obtain verifiable parental consent before collecting, using, or disclosing a child’s personal information.
The FTC said some age-verification technologies may require collecting personal information, raising concerns about whether their use could violate COPPA.
“Age verification technologies are some of the most child-protective technologies to emerge in decades,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “Our statement incentivizes operators to use these innovative tools, empowering parents to protect their children online.”
Under the policy statement, the FTC will not bring an enforcement action against operators of general audience and mixed audience sites that collect personal information solely to determine age without first obtaining parental consent, provided they meet several conditions.
Those conditions include not using or disclosing the information for any purpose other than age verification, deleting it promptly after it is no longer needed, implementing reasonable security safeguards, providing clear notice to parents and children, limiting disclosures to third parties capable of protecting the data, and taking reasonable steps to ensure the technology used provides reasonably accurate age determinations.
The policy will remain in effect until the Commission publishes final amendments to the COPPA Rule in the Federal Register or withdraws the statement. The Commission voted 2-0 to issue the policy.
Walmart Agrees to $100 Million Judgment
In a separate action Wednesday, the FTC and 11 states announced that Walmart Inc. agreed to a $100 million judgment to settle allegations that it deceived delivery drivers about pay and misrepresented how tips were handled in its Spark Driver program.
The states joining the action are Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin.
According to the complaint, Walmart allegedly showed drivers inflated base pay and tip amounts, failed to disclose that tips had not been preauthorized and could be reduced if a charge failed, and split tips when deliveries were divided among multiple drivers without clearly informing them.
The complaint also alleges that Walmart reduced base pay and tips when modifying “batched” offers — which involve multiple deliveries in a single trip — sometimes without notifying drivers until after the work was completed.
The FTC further alleged that Walmart misrepresented incentive pay opportunities and falsely told consumers that “100% of tips go to the driver,” while at times failing to provide collected tips to drivers or refund them to customers.
“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” Mufarrige said. “Today’s settlement reflects the Trump-Vance FTC’s focus on ensuring a healthy labor market for American workers, which is critical to the nation’s success.”
The FTC alleges the conduct violated the FTC Act and the Gramm-Leach-Bliley Act — a federal law governing financial privacy — as well as state laws.
Under the proposed stipulated final order filed in the U.S. District Court for the Northern District of California, Walmart is required to implement an earnings verification program, is prohibited from modifying pay offers after they are made except in limited circumstances, and is barred from misrepresenting earnings or other material information in delivery offers.
The Commission voted 2-0 to authorize staff to file the complaint and proposed order. Under FTC procedure, a complaint reflects that the agency has “reason to believe” a violation occurred; the stipulated final order will have the force of law if approved and signed by a federal judge.
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