The State of Michigan Attorney General, Dana Nessel, sued the Roku streaming service, which offers a sizable library of anime, gaming, on-demand and live TV, and movies, over allegations that Roku violates the Children’s Online Privacy Protection Rule (“COPPA”), multiple other data privacy laws, and the Consumer Protection Act. Roku is one of America’s top streaming services, available in an estimated 50% of Internet-connected homes as of 2023.
Nessel’s allegation of a COPPA violation would mean that, while failing to seek parental consent, Roku is an app directed to children, thus offering content and promotion that can appeal to any demographic, but would include children below 13 years old, all the while collecting data from them.
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Nessel says that since Roku doesn’t allow individual user profiles, it turns a blind eye to data collected on children, which it must know it has through the child-directed content and promotion. While not having individual profiles could, in theory, make it harder to do targeted advertising, Roku works with partners like Kochava, which can identify members of the same household, distinguish them, and track their spending habits through individual device and geolocation data. Using Kochava data, Nessel says a Roku advertiser can “better determine when a user who saw a given ad made a purchase as a result of seeing that ad.“
Nessel continues that Roku would benefit from turning a blind eye to advertising directed to children, because it gets to decide on 30% of the advertising run on third-party channels, keeping 100% of the money gained from that; advertising for demographics older than children was suggested to be more lucrative. A study by privacy analytics firm Pixalate, cited by Nessel, said 350 channels available on Roku offered content “directed to children”. Nearly all these channels collect data on IP addresses and geolocation, and sell this data to advertisers.
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Roku Accused of Sharing User Watch Data, Names, Addresses, Email Addresses, Geolocation Data With Third Parties Like Google & Meta
Nessel also alleges that Roku has shared identifiable information on Michigan customers who have requested specific videos and services from Roku with third parties, violating the Video Privacy Protection Act and the Preservation of Personal Privacy Act. These parties include Meta, LinkedIn, New Relic, Nextdoor, and Google Analytics; the data includes URLs of watched titles, names, addresses, geolocation data, and emails, which could easily be linked to a person’s online persona.
A violation of the Video Privacy Protection Act comes with a $2,500 penalty for each violation. Roku was also accused of misleading customers about data opt-outs — violating the Michigan Consumer Protection Act ($25,000 for each persistent and knowing violation). Given Roku delivers its services to “millions of Michigan homes,” per the lawsuit, it’s easy to see how Nessel’s request for damages would be rather high. Furthermore, since Roku is accused of unjustly enriching itself while violating these data protection laws, thus violating the Michigan Consumer Protection Act, Nessel requested a court order for Roku to give up all the profits made from its unjust actions.
Roku is an online streaming service allowing users to access numerous third-party channels and services in one place, such as Netflix, Crunchyroll, Paramount+, Hulu, and Peacock. It also offers its own free ad-supported channel called The Roku Channel, with major anime titles like Naruto, Hunter x Hunter, and JoJo’s Bizarre Adventure, TV series like Bones and Walker, Texas Ranger, and movies like John Wick 4. You can also read about another recent COPPA violation with Genshin Impact distributor, HoYoverse, which agreed to settle with the U.S. government this year.
Source: DANA NESSEL, Attorney General of the State of Michigan, ex rel. THE PEOPLE OF THE STATE OF MICHIGAN, Plaintiff, v. ROKU, INC., Defendant. (pdf)
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