FTC Files Amicus Brief Saying COPPA Can’t Force Parents Into Arbitration

The Federal Trade Commission filed an amicus brief in a lawsuit brought by a group of parents who are suing IXL Learning, Inc. The FTC’s brief disputes the company’s argument that under the Children’s Online Privacy Protection Act and the COPPA Rule, the schools’ agreement to binding arbitration also applied to parents.

The plaintiffs in the case – Shanahan, et al. v. IXL Learning, Inc. – are parents of school age children who allege IXL Learning illegally collected, used and sold their children’s data on their website and software in school. The parents’ putative class action lawsuit alleges that the education company violated various laws, including the Federal Wiretap Act and multiple California statutes, as well as common law privacy torts.

IXL Learning, which provides websites and school educational services, filed a motion to compel arbitration, claiming that the school districts agreed to the company’s full terms of service, including an arbitration provision. IXL Learning argued that under COPPA, school districts act as agents for the parents in the use of IXL’s educational services, and the parents are therefore bound by the full terms of service.

The FTC amicus brief clarifies that nothing in COPPA or the COPPA Rule dictates that parents and children should be bound by every part of the terms of service agreement between a company like IXL Learning and a school district, nor does COPPA support a claim that parents should be bound to arbitration in this case.

In December 2023, the Commission proposed amendments to strengthen the COPPA Rule by further limiting companies’ ability to monetize children’s data. The proposed Rule would require targeted advertising to be off by default, bar indefinite retention of kids’ data, and strengthen data security. The Commission’s review of this Rule is ongoing.

The agency filed its amicus brief in the United States District Court for the Northern District of California, San Francisco Division. 

The Commission voted 5-0 to file the amicus brief. Commissioner Andrew Ferguson issued a concurring statement.