June 3, 2023

In legal regulations that could transform the market for kids ‘apps, Disney, Viacom, and 10 ad technology firms have agreed to remove certain ad software from kids’ apps to counter allegations that it has violated the privacy of millions of teenagers.

The agreements resolve three related class action lawsuits that involve some of the largest ad tech companies – including Twitter’s MoPub – and some of the most popular kids’ apps, including Subway Surfers, an animated game from Denmark that users around the world enjoy more than installed 1.5 billion times, according to Sensor Tower, an app research company.

The lawsuits accused the companies of incorporating tracking software into popular children’s game apps without the knowledge or parental consent, in violation of privacy and fair business practices laws. Such trackers can be used to profile kids across apps and devices, target them with ads, and get them to make in-app purchases.

As part of the settlements approved by a judge in the US District Court for the Northern District of California on Monday, the companies have now agreed to remove or disable tracking software that can be used to target children with ads. Developers can still serve contextual ads based on the content of an app.

“This will be the biggest change in the children’s app market we’ve seen in business models,” said Josh Golin, executive director of Campaign for a Commercial-Free Childhood, a Boston-based nonprofit. “Thousands of apps no longer target children with the most insidious and manipulative forms of marketing.”

The companies in the class actions did not admit any wrongdoing.

The settlements come because the Federal Trade Commission has been prosecuting child privacy cases against individual developers and ad tech companies. However, proponents of children said the class actions, which affected a much larger segment of the app and ad tech market, could drive industry-wide changes for apps and ads for young people.

Viacom, whose settlement covers one of its children’s apps called “Llama Spit Spit”, Kiloo, a Danish company that helped develop Subway Surfers, and Twitter declined to comment. Disney, whose settlement agreement covers its children’s apps in the United States, did not immediately respond to emails asking for comment.