Here’s How New Privacy Laws Could Affect Facebook and Google

The Obama administration’s intentions to strengthen child privacy laws have Facebook (NASDAQ:FB), Twitter, and Google (NASDAQ:GOOG) protesting that the new rules would infringe upon Americans’ free speech.

The three Silicon Valley companies have filed written responses with the Federal Trade Commission regarding the government’s plans to update the Children’s Online Privacy Protection Act of 1998, which was written before the majority of American minors owned smartphones, before applications began tracking locations, and before Facebook’s “like” button came into being.

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The government’s decision to update privacy laws comes at a time when major companies, including app developers and data miners, appear to be collecting information about the online activities of underage Internet users.

Any website that embeds a plugin on another site, including Facebook, Digg, Twitter, and Google+, will be placed under the watch of the FTC. Under the new law, companies will be required to seek the permission from parents to collect data from users 12 and under and alert users that they are collecting personal information.

Twitter, Facebook, and Google all argue that the proposal is unworkable. In comments filed with the Commission, Google said the new rules would “undermine the ability of sites and services to provide engaging online resources to children.”

Furthermore, the companies say they do not have the resources or the ability to track all the users of their services on other sites. Other companies worry that the rules would hold software platforms like Apple’s (NASDAQ:AAPL) iOS or Google’s Android responsible for the thousands of apps that run on their devices.

But regulators and advocates of the updated privacy laws say that powerful Internet companies should take greater responsibility for the benefits they get from their vast Internet presence.

“The fact of the matter is, there is information being collected from children through child-directed Web sites and online services, and the question is who should be responsible,” Phyllis Marcus, a senior staff lawyer at the FTC’s Bureau of Consumer Protection, told the Washington Post.

The FTC aims to finalize new rules by the end of the year.

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