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I have a website for a fan game. We do not profit from it in any way. We don't even have ads nor donations. Do we count as a non-profit and are therefore exempt from complying with COPPA under Section 1302(2)(B)?

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I don't typically make a habit of asking questions when answering one, however in this case, it's almost necessary. COPPA only applies to you if you are collecting information or targeting minors for the sale of goods, it's likely COPPA does not apply to you. 1302(2)(B) is a consumer protection law; from you very limited description, i doubt it applies to you.

You need to ask yourself if you are collecting this type of information from the site's visitors (assuming you're not selling anything:

First and last name; A home or other physical address including street name and name of a city or town; Online contact information; A screen or user name that functions as online contact information; A telephone number; A social security number; A persistent identifier that can be used to recognize a user over time and across different websites or online services; A photograph, video, or audio file, where such file contains a child’s image or voice; Geolocation information sufficient to identify street name and name of a city or town; or Information concerning the child or the parents of that child that the operator collects online from the child and combines with an identifier described above.

If you are a collecting this type information and you don't intend to ever profit from the site, then what is the point of tracking the identity of the users? If you are collecting this data, do you need to? And if you do, are you at least have guidelines for use that cite COPPA, saying children under the age of 13 cannot participate in the site, or have auto rejection measures for birthdays that reveal the person is a minor under 13, at least without parental permission?

I would suggest either not collecting this information or complying, because I highly doubt you're a non-profit (and even many non-profits are not exempt if their member's make money from their member benefit.

Not making a profit does not make you a non-profit or non-commercial, and you can still generate income as a business and be a non-profit so long as after operating expenses all money goes back into the business, among (many) other rules. This is a legal and tax exempt status, having very specific rules surrounding its structure prior to incorporation, its model, and how it treats any monies it does take in. If you were a non-profit, you would know you are. You must be registered as a non-profit with the IRS and have exempt status (like a 501(c)(3). First, you must request an Employer Identification Number (EIN) and then apply for recognition of exemption by filing Form 1023 (Charitable Organizations) or 1024 (Other Tax-Exempt Organizations), with the necessary filing fee. If you were allotted exempt status, you then may be exempt from COPPA, despite the fact that most non-profits still comply because it is the right thing to do.

This is a super complex law with big teeth, but it only applies to sites that are selling and/or collecting the information of minors.

You can always send in your self-regulating procedure to the feds under the safe harbor provision to be sure you're safe. If you're not, they won't come after you for past practices, but you'll need to get in compliance or shut down. Others simply don't comply as they are lax in enforcement (there are just too many sites to police) unless someone (a parent) complains or you get hacked and a bunch of children's identifying information get's dumped. If that happens, you'd better have some money somewhere because you will need a good lawyer when the lawsuits start getting served.

The way you describe your site, I can't envision why you need that type of information anyway.

  • We have a discussion forum so that we can get feedback from everyone who plays our game. This necessitates the creation of an account with a screen name. There is theoretically the possibility of everything else stated ending up on our website as well via the user's own actions. At present, if a user states their age as being under 13 we remove their account and posts from the website. We do not ever intend on selling the information. – ldxmzg Sep 21 '15 at 16:47
  • Under these circumstances you need to be in compliance. You could do this by simply requiring a credit card, even if you don't charge it.The courts have said that the use of a credit card shows either age of majority or implied parental consent. – gracey209 Sep 21 '15 at 17:03
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Whether you do or do not qualify as a non-profit should not be a factor in your compliance with COPPA, and not complying with it simply for that reason is a horrible idea that will probably get you into trouble.

The exception in COPPA for non-profits exists solely because the government is not able to prosecute a non-profit for not complying with it - not because they truly thought non-profits shouldn't comply with it (they should). Also keep in mind that the exception only prevents the government from prosecuting you for non-compliance.

If something were to happen at your fault due to your non-compliance, you are still completely open to civil suits from parents and other entities, and you also risk your entire reputation as a non-profit in the process. Remember that COPPA exists to protect children, and intentionally not complying is essentially saying "we don't care about protecting children."

  • We of course try our best to comply with COPPA. This question was mainly for informative purposes. – ldxmzg Sep 17 '15 at 20:40
  • Isn't being a nonprofit entity for legal purposes distinct from not profiting from an enterprise? It also seems like not every nonprofit is exempt, only those that "would otherwise be exempt from coverage under section 5 of the Federal Trade Commission Act". While your answer is good advice, it doesn't really address whether a fan website might be exempt. – ColleenV parted ways Sep 18 '15 at 13:59

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