Genesis Toys Sued by Coalition of Consumer Advocates

A coalition of consumer advocates sued Genesis Toys, claiming that the toy maker is violating COPPA (the Childrens’ Online Privacy Protection Act of 1998) by failing to adequately inform parents that their children’s conversations and personal data collected by the toys are being shipped off to servers and third-party companies.

The Toys at Issue

The toys at issue are the My Friend Cayla and i-Que, toys which listen, record, and send voice data to a defense contractor specializing in voice-recognition. The My Friend Cayla and i-Que toys connect via Bluetooth to a mobile phone app, accessing the internet in order to interact with kids and answer their questions. To do this, the apps collect and record the conversations between children and their toys, and use speech-to-text protocols to turn kids’ questions into searchable queries.

When you set up the app, you enter personal information so that the toy can converse more naturally with the child. For example, Cayla asks for personal information such as the child’s name, their parents’ names, their school name, their hometown, and many other questions. The app also allows for location setting and collects users’ IP addresses.

The app’s technology is run by Nuance Communication, a company that is well known for its Dragon speech-to-text dictation software and its presence in the healthcare dictation field. Nuance is also a defense contractor that sells products, including “voice biometric solutions,” to “military, intelligence, and law enforcement agencies.” 

Both Cayla and i-Que are governed by Nuance’s general privacy policy which states that,

We may use the information that we collect for our internal purposes to develop, tune, enhance, and improve our products and services, and for advertising and marketing consistent with this Privacy Policy… If you are under 18 or otherwise would be required to have parent or guardian consent to share information with Nuance, you should not send any information about yourself to us.

Complaint with the Federal Trade Commission

A coalition of consumer advocates, comprised of the Electronic Privacy Information Center (EPIC), the Campaign for a Commercial-Free Childhood (CCFC), the Center for Digital Democracy (CDD), and the Consumers Union filed a complaint against Genesis Toys with the Federal Trade Commission, arguing that the manufacturer of these interactive and robotic toys and the supplier of its voice-parsing services, Nuance Communications, violated COPPA, the Childrens’ Online Privacy Protection Act of 1998.

Under COPPA, companies that gather information and data from children must first give notice and obtain consent from their parents. The notice and consent requirements include privacy practices, access to parents to review or delete their children’s data, and giving parents the option of not sharing that data with third parties. According to the complaint with the FTC, Genesis and Nuance are not fulfilling the requirements of COPPA.

The complaint alleges that any privacy policies that do exist are hard to find, that the companion apps do not link to the privacy policy, and that Cayla’s Terms of Service are not available on the website or the app — they only show one time, as a pop-up, the first time you use the app.