Topline
Kurbo and WW International—formerly Weight Watchers—agreed to pay $1.5 million to resolve allegations their weight management app illegally gathered personal information from children, the Department of Justice and the Federal Trade Commission announced Friday, as WW stock fell by about 44% year-to-date at $9.11 per share.
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Key Facts
Kids’ weight management platform Kurbo and parent company WW allegedly violated the Children’s Online Privacy Protection Act (COPPA) using the “Kurbo by WW” mobile app and website, which were designed and marketed for children as young as 8, federal authorities said in a complaint filed in the U.S. District Court for the Northern District of California.
The app and website were allegedly used to collect personal information from children, ranging from names and telephone numbers to height, weight and food intake, all without properly notifying parents or obtaining their consent, as required by COPPA, the DOJ said.
WW and Kurbo were ordered to delete their “ill-gotten data” and eliminate any algorithms developed from that data, said FTC chair Lina Khan in a statement.
Kurbo executive Michael Colosi said that the company never targeted kids with advertising or sold data to third parties, and always took action to address possible COPPA compliance shortcomings identified by the FTC.
The news came after months of lackluster market performance by WW, whose digital subscriber base shrank by 7% to roughly 3.4 million during the final quarter of 2021, as Covid-19 lockdowns loosened and the at-home fitness trend waned.
Jean Nidetch, founder Of Weight Watchers.
Key Background
Founded in 1963 by Jean Nidetch, Weight Watchers combined nutritional training with motivational rhetoric, growing from 1 million members in 1968 to over 4.6 million in 2019, according to company figures. In 2018, Weight Watchers was rechristened WW, signaling a shift toward general wellness and nutrition content separate from weight loss. The online therapeutics platform Kurbo was acquired by WW in 2019 for $3 million and relaunched as the “Kurbo by WW” app, billed as a way for kids age 8-17 to reach or maintain a healthy weight. However, some critics claimed that the app could cause children to develop an unhealthy body image. Registered dietitian nutritionist Rebecca Scritchfield told Insider that the app’s system of designating foods as “green,” “yellow” or “red” to indicate how much of them children should eat was likely to promote shame and other negative emotions around food.Report the details…
Crucial Quote
“Parents have a right to know and consent before companies collect their children’s personal information,” said DOJ Civil Division Principal Deputy Assistant Attorney General Brian Boynton in a statement. “The department is committed to enforcing the protections against unauthorized collection of information from consumers, particularly children.”
Contra
The settlement agreed to by Kurbo and WW does not constitute a legal admission of wrongdoing. “Kurbo takes child privacy very seriously and its highest priority is protecting its members and their personal data,” Colosi said. “Data collected in Kurbo’s paid counseling program is used in strict compliance with parental consent solely to help children learn better eating habits.”
Further Reading
“WW International Stock Faces Some Headwinds, But It’s Trading Cheap” (Forbes)
Source: https://www.forbes.com/sites/zacharysmith/2022/03/04/weight-watchers-app-violated-kids-privacy-doj-says/