Balderas v. Tiny Lab Productions

CourtDistrict Court, D. New Mexico
DecidedFebruary 2, 2021
Docket1:18-cv-00854
StatusUnknown

This text of Balderas v. Tiny Lab Productions (Balderas v. Tiny Lab Productions) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Balderas v. Tiny Lab Productions, (D.N.M. 2021).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO

STATE OF NEW MEXICO EX REL. HECTOR BALDERAS, ATTORNEY GENERAL,

Plaintiff,

v. No. 18-854 MV/JFR

TINY LAB PRODUCTIONS; TWITTER INC.; MOPUB, INC.; GOOGLE, INC.; ADMOB, INC.; AERSERV LLC; INMOBI PTE LTD.; APPLOVIN CORPORATION; and IRONSOURCE USA, INC.

Defendants.

MEMORANDUM OPINION AND ORDER

THIS MATTER comes before the Court on Defendant Google’s1 Motion for Reconsideration or, in the Alternative, Interlocutory Appellate Review and Stay (“Motion for Reconsideration”) [Doc. 93]. The Court, having considered the motion, briefs, and relevant law, and being otherwise fully informed, finds that the Motion for Reconsideration is well-taken in part and will be granted in part and denied in part. BACKGROUND I. Introduction A federal statute known as the Children’s Online Privacy Protection Act (“COPPA”) prohibits app developers and ad networks from collecting certain personal information from app

1 “Defendant Google” is Google LLC and AdMob Google Inc. 1 users who are children without first taking certain precautions. In a Memorandum Opinion and Order entered on April 29, 2020 (“April 2020 Opinion), this Court addressed what appeared to be an issue of first impression, namely, under what circumstances ad networks may be held liable under COPPA for their collection of personal information from app users who are children, in addition to how issues of preemption and state law come into play. Google now

moves for reconsideration of the April 2020 Opinion, arguing that while the Court correctly held that ad networks cannot be held liable if they do not have “actual knowledge” that the app in which their software is embedded was not “directed to children,” the Court incorrectly held that the additional issue of whether children were the “primary target audience” of the app was not relevant to the “actual knowledge” determination. According to Google, because the April 2020 Opinion, as it applied to Google, turned on the Court’s legal error, that Opinion must be reconsidered and, upon reconsideration, its outcome altered. II. Facts Tiny Lab Productions (“Tiny Lab”), a Lithuanian company, is a developer of child-

directed, mobile game apps including Fun Kid Racing, Candy Land Racing, Baby Toilet Race: Cleanup Fun, and GummyBear and Friends Speed Racing. Doc. 1 ¶ 3. AdMob, Twitter/MoPub, InMobi/AerServ, Applovin, and ironSource (collectively, the “Ad Networks”) sold their proprietary software development kits (“SDKs”) to Tiny Lab for installation and use in its gaming apps. Id. ¶ 13. When a Tiny Lab app is downloaded onto a child’s device in New Mexico, the Ad Networks’ SDKs are also installed as app components. Id. ¶ 5. Once so embedded, while a child in New Mexico plays one of the apps, the Ad Networks’ SDK collects personal information about that child and tracks the child’s online behavior to profile the child for targeted advertising. Id. ¶¶ 43-46. This activity is invisible to the child and her parents,

2 who simply see the given app’s game interface, and occurs “without (1) reasonable and meaningful notice to parents, or (2) verifiable parental consent.” Id. ¶¶ 46, 55, 66, 74. Google runs not only AdMob, its ad network, but also Google Play, a “service” that allows a user to “browse, locate, view, stream, or download Content for [his or her] mobile, computer, tv, watch, or other supported device.” Doc. 50-4. Google Play has a program

called “Designed for Families,” “which allows [app] developers to designate their apps and games as family-friendly.” Doc. 67-2. Google markets AdMob for use in conjunction with apps that participate in the Designed for Families program. Doc. 50-6. App “developers can opt [] their app or game [into the Designed for Families program] through the Google Play Developer Console.” Doc. 67-2. Google represents that, once developers opt into the Designed for Families program, “[f]rom there, our [Google’s] team will review the submission to verify that it meets the Designed for Families program requirements.” Id. Those program requirements include that all participating apps “be relevant for children under the age of 13.” Doc. 67-3. Google similarly represents that to participate in the

Designed for Families program, there are “specific guidelines and policies” that the developers’ apps “need to meet, which are assessed in the app content review.” Id. The Complaint alleges that “the majority” of Tiny Lab’s apps were submitted to and accepted by Google for its Designed for Families Program, where the apps were available for download. The Complaint describes Tiny Lab’s apps as “fun, free, kid-focused games” with a “cartoonish design and subject matter,” with “levels [] designed specifically for children” – “toddlers,” in particular. Id. ¶¶ 100, 30-31, 119. The games are “for kids,” will keep them “entertained for months,” and “are expressly to be played by [] children.” Id. For example, one of Tiny Lab’s apps, called “Fun Kid Racing,” gives players “an assortment of cartoonish

3 cars” to race along to a “child-friendly soundtrack,” and is designed for children aged 2 through 10, with “levels” and “controls” that “even a toddler” can use “without any problem.” Id. ¶ 31. In the spring of 2018, security researchers at the University of California, Berkeley, notified Google that 84 Tiny Lab apps participating in the Designed for Families program were “potentially incorrectly listed as directed to ‘mixed audiences’” rather than being listed, as they

should have been, as “primarily directed to children,” thereby causing app users under 13 years of age to be subjected to “COPPA-prohibited behavioral advertising.” Id. ¶ 114. In response, Google conducted “a thorough investigation of each of the apps that [the researchers] highlighted in [their] research paper.” Id. ¶ 118. Google “did not come to the same conclusion that any of these 84 Tiny Lab Productions apps were violating COPPA,” and advised the researchers that it did not consider “these apps to be designed primarily for children, but for families in general.” Id. ¶ 47. III. Procedural History The State of New Mexico (“Plaintiff”) commenced this action, asserting a federal

statutory claim against Tiny Lab and the Ad Networks for violation of COPPA, along with a state statutory claim against Tiny Lab and the Ad Networks for violations of the New Mexico Unfair Practices Act (“UPA”), a state common law claim against Tiny Lab and the Ad Networks for intrusion on seclusion, and a state statutory claim against Google for an additional violation of the UPA in connection with its operation of Google Play. Id. ¶¶ 207-248. Thereafter, all the Ad Networks other than AdMob (collectively, the “SDK Defendants”) together filed one motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, in which Google joined. Additionally, Google filed its own motion to dismiss. The State objected to both motions.

4 In the April 2020 Opinion, the Court granted the SDK Defendants’ motion in its entirety but denied Google’s motion in part. As to Plaintiff’s COPPA claim, the Court explained that ad networks may be held liable under COPPA for the collection of personal information from child app users only if they have “actual knowledge” that the apps in which their SDKs are embedded are directed to children. The Court found that the Complaint does not plausibly allege actual

knowledge on the part of the Ad Networks by virtue of the communications between their SDKs and their servers but does plead additional factual content that allows the Court to draw the reasonable inference that Google had actual knowledge of the child-directed nature of Tiny Lab’s apps.

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