Companies settle with New York to stop tracking children online

NEW YORK (WABC) -- New York Attorney General Eric Schneiderman announced Tuesday that he had reached settlements with four companies, stopping them from using tracking technology on their popular children's websites.

The settlements require Viacom, Mattel and Jumpstart to pay penalties totaling $835,000 following a two-year investigation dubbed Operation Child Tracker into violations of the 1998 federal law that prohibits unauthorized collection of children's personal information on websites directed at users under 13.

"What we found, frankly, was shocking," Schneiderman said. "Many of the sites that are home to our most popular TV shows and toys were littered with technology that can be used to track every move a child makes on that site."

Schneiderman said each allowed tracking technology such as cookies on their websites in violation of the law. Such technology can be used by marketers and advertisers.

"Federal law demands that children are off-limits to the prying eyes of advertisers," Schneiderman said. "Operation Child Tracker revealed that some of our nation's biggest companies failed to protect kids' privacy and shield them from illegal online tracking."

Hasbro says it cooperated with investigators and will closely monitor companies working on its behalf, and that it is rolling out a stricter online privacy protection policy.

"We are rolling out a new, stricter online privacy protection policy for our partners, and enacting new protocols and technology to scan our digital properties for any cookies, widgets or other applications that may violate our policy," spokeswoman Julie Duffy said.

Their websites include Viacom's Nick Jr. and Nickelodeon; Mattel's Barbie, Hot Wheels and American Girl; JumpStart's Neopets; and Hasbro's My Little Pony, Littlest Pet Shop and Nerf.

"We used to worry about our children wandering into bad neighborhoods," Schneiderman said. "Now our children live online, and we have to police the internet as we seek to police our streets."

Mattel said it takes online privacy and security seriously.

"Any time we become aware of a question about whether a Mattel-operated website is in full compliance with the Children's Online Privacy Protection Act or other laws, we take prompt action to investigate and, if necessary, remedy the situation and look for additional controls to avoid a re-occurrence," spokesman Alex Clark said.

Viacom and JumpStart didn't immediately reply to requests for comment.

All four companies signed agreements to regularly scan their children's websites to screen advertisers' or others' data collection practices to ensure legal compliance and update their privacy policies. Penalties are $500,000 for Viacom, $250,000 for Mattel and $85,000 for JumpStart.

The New York investigation is continuing. Schneiderman said he hopes other companies with websites for children will now remove similar tracking by advertisers or other third parties, he said, adding that there's an open debate about the need for a similar law to protect adults' privacy. "It's open season on adults," he said.

(The Associated Press contributed to this report)