OpenX Ad Exchange fined $2M for targeting ads to children

OpenX Ad Exchange charged 2 million dollars for selecting ads for children without parental permission. It also violated geolocation ad targeting choices. The United States Federal Trade Commission charged OpenX Ad Exchange 2 Million dollars for overstepping the COPPA Rule or Children’s Online Privacy Protection Act Rule.

This rule needs parental approval before disclosing, using, or collecting the personal information of kids. OpenX is a scheduled ad exchange that trades advertisements on more than 1,200 premium publishers. It trades on at least 50,000 mobile applications. The FTC discovered that OpenX was in violation of the FTC’s COPPA Rule by deliberately trading in personal data.

They collected the information from children under 13 years and toddlers. And they also uncovered kids to behavioral targeting advertisements in violation of COPPA Rules. What uncovered OpenX to this outcome was the truth that they promoted their ad exchange. They advertised as having human analysts conducting commerce quality checks.

OpenX offers ad assisting technology to position ads on websites. It conducts real-time bidding for the sequence of those advertisements. One of the creators of OpenX is Tim Cadogan. He is presently the CEO of GoFundMe and was previously Senior Vice President of Global Advertising Marketplaces at Yahoo.

The government created the Children’s Online Privacy Protection Act to provide parents power over the types of information. They collect this data about their kids. They only apply these regulations to sites directed to kids. Also, they apply this law to the websites that have information that they are obtaining data from kids.

Websites that are for children under 13 years and toddlers have to receive parental approval. Besides trading advertisements to toddlers, OpenX also traded ads depending on a website viewer’s geographic area. However, they had excluded geographic targeting. As per the FTC, the offense of users who excluded geolocation tracking occurred on Android mobiles.