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Big Business is a Danger for Children's Online Privacy

Internet Freedom
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EDITOR NOTE: Products designed for children. Products aimed at children. Products exploiting children. There’s certainly a mad rush to court next-gen consumers among a wide swathe of businesses, from toy manufacturers to media companies to, believe it or not, financial brokerages. It seems as if the notion of what’s appropriate and what’s not is getting blurrier and blurrier. Perhaps the guiding principle of online privacy should concern “who” owns the risk--the business or the children. If it’s the children, then it’s an unethical or immoral enterprise. Hear that, Fidelity? Sadly, the same can be said on many aspects of education as well, in which institutions benefit from ideological capital leading to the justification of the overall and semi-fraudulent system we know today, including the Federal Reserve, banking institutions, the normalization of financial coercion (i.e. taxes), and the necessity of fiscal spending for the sake of the greater good. In this system, the risks are heavily weighted toward you, to the advantage of a few in power. 

Companies are increasingly chasing next-gen consumers: America's youth.

What's new: Fidelity today said 13- to 17-year-olds can trade stocks using an account in teens' full control once it's opened by a guardian. It's an industry first — and other brokers could follow.

Why it matters: Kids are a lucrative market given how much younger they are developing online habits (something the pandemic has only made worse).

What they're saying: "It's basically hook 'em as young as you can, period," says Jim Steyer, founder of Common Sense Media, a children's advocacy group that's called for more regulations on this front.

  • "They market to kids and teens because a) you hook them at a young age and b) you get their parents."

It's happening across a slew of industries.

  • Media companies like Netflix and ViacomCBS are pouring millions of dollars into content for kids. The New York Times is testing kid-friendly digital subscriptions.
  • 44 state attorneys general urged Facebook to drop plans for a version of Instagram for those under 13. (It already has the controversial Messenger Kids.)
  • One toy retailer now "lets kids as young as 3 years old shop for gifts ... without requiring further signoff from an adult," the Wall Street Journal reported this week.

The big picture: For decades, there's been caution around what is too dangerous to be marketed to kids (think cigarettes and toy guns). But the line between what should and shouldn't be off-limits is getting blurrier.

What to watch: Big Tech's reputation for getting kids onto its platforms is the source of bipartisan ire. One concern: These companies have fallen short on privacy for adult users — the same will happen for children.

  • "Unfortunately, when it comes to putting children ahead of their profits, Big Tech always fails," Sen. Ed Markey (D-Mass.) said at a congressional hearing on children's online privacy today.

Of note: Fidelity says there are guardrails to ensure trading teens — who can't trade on margin — are supervised.

  • Guardians must agree to receive activity statements, plus they can sign up for alerts on all transactions, a spokesperson says.

Originally posted on Axios

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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