On July 1, 2021, the Federal Trade Commission settled a complaint brought under the Children’s Online Privacy Protection Act (“COPPA”) against Toronto-based Kuuhuub Inc. and its Finnish subsidiaries Kuu Hubb Oy and Recolor Oy, operators of the online coloring book app, Recolor. The FTC alleged that the app operators violated the COPPA Rule by collecting and disclosing personal information from child users of the app without first notifying their parents or obtaining verifiable parental consent.

The Recolor app provides images that users can digitally color on their mobile devices and social media features that allow users to upload images for others to view, comment on, and like. To access the social media features, users must register for an account by providing an email address, screen name and optional profile description and picture. In its complaint, the FTC alleged that, while the app was billed as a “coloring book for adults,” a portion of the app was directed to children, therefore making the app subject to COPPA. The FTC alleged that some children, including those under 13, were able to register for an account with the app and use the app’s social media features. According to the complaint, the operators received numerous complaints from parents concerned with their children’s use of the app’s social media features to interact with adult users. The FTC also alleged that Recolor allowed third-party advertising networks to collect children’s personal information (in the form of persistent identifiers collected through cookies), and failed to instruct the ad networks to refrain from using such data for online behavioral advertising purposes.

Under the settlement, the operators agreed to a $3 million penalty, which will be suspended upon payment of $100,000 due to their inability to pay the full amount. The operators also must comply with COPPA; delete all personal information previously collected from children under 13 unless they obtain COPPA-compliant parental consent; offer refunds to paid app subscribers who were under 18 years old at the time of sign-up; and implement a pop-up alert about the settlement to be displayed to all app users.