The parent company of Broken Thumbs Apps—a prominent iOS app maker responsible for games like Zombie Duck Hunt, Truth or Dare, and Emily's Dress Up—has today settled with the Federal Trade Commission over its apparent collection of children's personal data in its iPhone and iPod touch apps. Though the FTC has gone after other companies for similar violations, this case is the first focused on mobile apps.

Parent company W3 Innovations was targeted with an FTC lawsuit on Friday; the settlement was announced Monday morning. In its complaint, the FTC alleges that W3 "collected, maintained, and/or disclosed personal information" entered into its various kid-targeted apps—for example, the complaint claims that the company collected and maintained a list of more than 30,000 e-mails as well as personal information from more than 300 Emily's Girl World App users and 290 Emily's Dress Up users.

What kind of information could the company have on kids? After all, it's usually the parents who buy and download the apps. According to the complaint, some of W3's apps ask the kids to enter names before beginning the game. In the case of Emily's Girl World, they are given the opportunity to leave comments on a blog related to the app, details of which are saved to W3's archives.

The FTC says that these apps were clearly marketed to children and that the company has seen more than 50,000 app downloads since it first began offering games on the iPhone and iPod touch. And because these apps send and receive information via the Internet, the FTC says they are in violation of the Children’s Online Privacy Protection Act (COPPA) and the FTC's COPPA Rule, which requires parents to give consent before the company collects or uses the personal information of children. With W3/Broken Thumbs, parents were unaware that their kids' details were being collected and used for marketing purposes.

W3 didn't spend much time trying to fight the accusations—the company immediately agreed to settle, resulting in a $50,000 fine. The company has also agreed to delete all personal information that was collected in violation of the COPPA Rule and says that it won't make any future Rule violations.

COPPA on the beat

COPPA has been around since 1998 as a way to protect the private information of children, but members of Congress have already been talking about giving COPPA a major overhaul to cover more modern types of information, such as GPS data.

"We passed COPPA, but the whole world has changed since that happened. Some online technologies that are nearly ubiquitous today did not even exist a few years ago. Accessing these websites, whether they are well-known and popular or outright illegal, have enormous privacy implications that I fear parents are unaware of, and I know children do not understand," Senator Jay Rockefeller (D-WV) said during a committee hearing last year.

Although COPPA may not be the perfect solution for keeping apps out of kids' business, US Representative Ed Markey (D-MA) applauded the FTC's decision to pursue W3 and took the opportunity to advertise his recent attempt to update COPPA with the Do Not Track Kids Act of 2011.

"Since COPPA was signed into law in 1998, children increasingly connect to the Internet on the go, using an array of mobile apps and new services that did not exist when the law was enacted," Markey said in a statement. "Earlier this year, I introduced the ‘Do Not Track Kids Act’ with Congressman Joe Barton to bring COPPA up to date and add additional safeguards for teens. I look forward to working with my colleagues to move forward our bipartisan bill so that we can provide strong protections for children and teens, enabling them to learn, communicate and enjoy entertainment in a safe online environment."

Senator Amy Klobuchar (D-MN), who has been working to prevent deceptive in-app purchases on mobile devices, agreed with Markey. “This settlement is an important victory for online and mobile privacy. Mobile apps can be great tools for kids to learn and have fun, but parents should never have to worry that their child’s personal information is being collected or violated. I will continue to make sure we have clear rules of the road that allow consumers to have more control over their online and mobile information," she said in a statement.