Last month, the Federal Trade Commission (“FTC”), in response to a complaint filed by Electronic Privacy Information Center (“EPIC”) and other consumer groups, made the decision to review the potential privacy and security concerns associated with electronic, internet-capable children’s toys, namely My Friend Kayla and i-Que Robot, designed by Genesis Toys and Nuance Communications.

EPIC asked the FTC to investigate the toys to determine whether they violate the Children’s Online Privacy Protection Act (“COPPA”) or if the companies are engaged in unfair and deceptive trade practices. EPIC alleged that the toys engage in spying on children under the age of 13 in violation of privacy laws and collect information without parental consent while sending that information to Nuance, potentially exposing the information to unauthorized use by law enforcement and the military.

Takeaway: Advertisers and marketers should note that the FTC and other agencies are taking a proactive approach in investigating the security risks associated with internet-capable children’s toys and should ensure that such items comply with applicable privacy laws.