The action against American Pop Corn Company was taken under a rule of the Children's Online Privacy Protection Act (COPPA), the fifth action of its kind by the FTC. The Act applies to operators of commercial web sites and on-line services directed to children under the age of 13, and to general audience web sites and on-line services that knowingly collect personal information from children.
Among other things, the Act requires that web sites get verifiable consent from a parent or guardian before they collect personal information from children. It also prohibits sites from conditioning a child's participation in an activity on the child's disclosing more personal information than is reasonably necessary to participate in such activity.
The America Pop Corn Company’s web site, jollytime.com, contained a "Kids Club" section that featured games, contests, and jokes targeting children under the age of 13. Without obtaining parental consent, the company collected personal information, including names, e-mail addresses and home addresses, from child visitors.