Zeeks.com Shuts Down Chat Room

S A N  F R A N C I S C O, Sept. 14, 2000 -- While federal officials work out the kinksof implementing a law aimed at protecting children from onlinepornography, at least one major Web site for kids is saying themeasure is hurting its legitimate business.

Steven Bryan, CEO of Zeeks.com, said Wednesday the costs ofcomplying with the 1998 Children’s Online Privacy Protection Actare simply too high. Zeeks.com, the 15th most popular entertainmentsite for children according to Media Metrix Inc., will pull itse-mail and chat-room services Oct. 1. and try to make up for thepredicted 20 percent loss in traffic with additional games.

COPPA requires commercial Web sites to obtain “verifiableparental consent” before any child under 13 participates in anyinteractive activity such as e-mails or chat rooms. It alsorequires parental consent before a site uses any personalinformation, such as a name or address, from children under 13.Consent can be verified, among other ways, through postal mail or atelephone call.

Zeeks.com, which gets about 1,000 new members a day and hasabout 650,000 registered users, estimated that it costs the company$200,000 a year to comply with the law. The costs includeprocessing parental consent forms and hiring a dozen employees tomonitor the chat rooms for 12 hours each day.

“It was the straw that broke the camel’s back,” Bryan said ofthe law, which went into effect in April. “It’s expensive to runthose services already and with COPPA, it got more expensive, andit can’t be paid for with marginal advertising revenue.”

Law Important Tool Against Pedophiles

Proponents contend the law is important in deterring childpredators from using such sites and for protecting the privacy ofchildren in the same way they are protected in the real world.

“The alternative is for those sites to put kids at risk,” saidLee Peeler, the Federal Trade Commission’s associate director foradvertising practices.

But businesses need to learn that there are exceptions and waysto get around the law before they decide to eliminate theirinteractive services, he said. For instance, he said, Web sites canoperate children’s chat rooms under the law without parentalconsent if they delay the release of the chat and remove first anymaterial that is inappropriate or would somehow identify the child.

“There are a lot of sites that are making a go at it, and ifyou’re in it for the long run, parents’ trust is important, andthat’s what COPPA provides,” Peeler said.

It’s unclear how many other child-oriented Web sites aresimilarly falling victim to the high cost of compliance, but Bryanpredicted that Zeeks.com, which launched two years ago as Congresswas debating the measure, will not be alone.

FreeZone.com, another popular children’s Web site, agreed thatcomplying with the law has been expensive. It costs the 5-year-oldcompany at least $100,000 a year — without counting the staff ittakes to monitor the chat rooms, said the company’s managingdirector Ali Pohn.

But the advantage for FreeZone.com is that it was doing whatCOPPA required even before the law was passed, Pohn said.

“There does need to be some regulation of what’s going on outthere,” she said. “And what I hope COPPA does is make parentsaware that when their kids are on the computer, they’re not justsitting in the living room or the family room but that they’reactually out there in the world.”