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Privacy concerns threaten sales of hi-tech doll

Regulators in Germany have already banned My Friend Cayla, and consumer-watchdog groups want the US Federal Trade Commission to follow suit.

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Genesis
My Friend Cayla, a doll that can talk and answer questions via tapping into the Internet, was banned by Germany over privacy concerns.

Thanks to a built-in microphone and Bluetooth connection, the My Friend Cayla doll can talk with a child 鈥 answer questions, tell stories, and be a "real friend."

The 18-inch tall doll won the Gadget of the Year award at the 2014 London Toy Fair.聽

But German regulators see this doll as a threat to child safety. On Friday, the country鈥檚 Federal Network Agency , stating that it was an unacceptable threat to children鈥檚 privacy.

Consumer-advocacy groups in the US and Europe filed complaints against Genesis Toys, which manufactures My Friend Cayla, this past December, when the Norwegian Consumer Council and found that its wireless connection was vulnerable to hacking.

The US complaint, filed with the Federal Trade Commission, claims that the dolls were not only vulnerable to hackers, but allowed corporations to gather data on children and place products 鈥 for instance, Disney movies 鈥 into their conversations with the toy.

Concerns about children鈥檚 online safety are almost as old as the World Wide Web itself, prompting the passage of the Children鈥檚 Online Privacy Protection Act (COPPA) in 1998. But the My Friend Cayla controversy could portend greater challenges for privacy advocates, as the Internet spreads beyond PCs and into phones, appliances, and toys.

"With the growing Internet of Things, American consumers face unprecedented levels of surveillance in their most private spaces, and young children are uniquely vulnerable to these invasive practices," , an employee of the Electronic Privacy Information Center, one of the parties to the FTC Complaint.

"The FTC has an obligation here to step in and safeguard the privacy of young children against toys that spy and companies that exploit their very voices for corporate gain."

As 海角大神鈥檚 Charlie Wood reported in January, speech-enabled devices like Amazon鈥檚 Echo and the iPhone 鈥渁re more ear than brain, and all the heavy-duty data crunching required for machines to understand human speech is done on far-away Amazon and Apple servers.鈥

My Friend Cayla works similarly. The doll鈥檚 microphone sends a child鈥檚 questions to a smartphone application, which searches the internet for answers. As the company advertises:

Cayla can understand and respond to you in real-time about almost anything. Ask her questions about herself, people, places, and things! She's the smartest friend you will ever have!

Cayla also loves to聽tell stories, play games, share photos from her photo album, and sing too. She聽is not just a doll...聽she's a real friend!聽

But watchdog groups have reason to suspect that those audio files go further. 鈥淭he cost of the device is not the ultimate revenue for these companies, Albert Gidari, the director of privacy at the Stanford Center for Internet and Society, told Wood. 鈥淎dvertising and personal information are what's at the end of the rainbow for them.鈥

In the case of Cayla, that audio files get sent to a database maintained by Genesis Toys鈥檚 technology partner, Nuance Communications, which also develops voice-recognition programs for law enforcement and the military. They also argue that Genesis and Nuance have failed to obtain parental consent for this practice, as required by COPPA.

In its , Genesis states that it is 鈥渃ommitted to safeguarding your personal information and the personal information of any child under your care.鈥

But on Friday, German regulators decided that the company鈥檚 efforts fell short. In the US, the FTC is currently reviewing the privacy concerns .

But already, watchdog groups on both sides of the Atlantic are gearing up for similar fights to protect children鈥檚 privacy from the growing number of microphones and cameras they鈥檙e likely to encounter.

Monique Goyens, head of the European Consumer Organization, that "EU product laws need to catch up with digital developments to deal with threats such as hacking, data fraud or spying.鈥

Meanwhile, Kathryn Montgomery, Professor of Communication at American University, that 鈥淭his will be a crucial test of the new FTC under the Trump Administration. Now more than ever, we must ensure that children's needs are high on the policy agenda for the Big Data era."

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