According to regulators, smart toys record dialogue with children, belonging to the “hidden spy device” category. My friend Cayla is accused of asking the child’s personal questions, such as their favorite programs and toys, and save the data sent to third parties to make voice recognition products for the police.

One day after the announcement of the German ban, the New York Toy Fair opened – smart toys are in this place. Teddy Ruxpin, 80 years of baby love story bear, with high-tech transformation with the return, Hologram Barbie, a funny sequel to help the interesting Hello Barbie. Toy Show also features smart toys Novice like Woobo, essentially a cute version of Amazon Echo and Google home speakers.

The contrast shows the nuances between the desire to protect personal privacy and create engaging products. This is the same extensive debate in the whole technology and consumer electronics world raging, such as Google’s company hoover up personal data to better serve your ad. Only this time, this problem affects the infected child.

Smart toys are a multibillion-dollar industry that’s only getting larger as more kids are growing up connected and clamoring for the next high-tech distraction. Parents are flocking to connected toys for tots, with one research firm predicting that revenue for smart toys will reach $8.8 billion by 2020.

The booming market could be blowing up even faster if only children’s online privacy concerns weren’t in the way, members of the toy industry lamented at Toy Fair. While parents are looking out for their kids’ safety and privacy, toymakers say data collection is necessary to make the next generation’s iconic toy.

Playing with privacy

The Children’s Online Privacy Protection Act, passed in 1998, requires companies targeting kids under 13 to get consent from parents before collecting personal information from children, as well as allowing parents to review any data a company collects on their kids. The data also must be deleted within 30 days of its use. COPPA’s author, Sen. Edward Markey, a Massachusetts Democrat, questioned the makers of My Friend Cayla about potential violations of the act “given the sensitive nature of children’s recorded speech.”

The toy industry, unsurprisingly, takes a different view.

“To take smart toys to the next level of engagement and give kids what they want, you have to take data and create an engaging experience that’s connected to their friends and based on their persona,” said Krissa Watry, CEO of Dynepic, the company behind iOKids, a social media platform for children and their parents.

Watry originally tried to create a smart toy but stopped after finding security and privacy for children a massive burden for toy companies — a fate she’s seen elsewhere among her peers.

“This is why the 5-12 category sucks,” Watry said at the Digital Kids conference earlier this week, commenting on COPPA’s restrictions on toy innovations. Companies have been moving cautiously when it comes to smart toys because children’s privacy gets a great deal of scrutiny.

One mistake, and you could end up being banned in Germany.

Parental control

The folks at Woobo are walking that thin line with their smart toy, a cuddly companion with a screen for a face, touch sensors on its belly and microphones around its head. They’re looking to develop a voice assistant that learns how to talk with kids — mispronunciations and all.

To do that, it needs to keep recordings of children playing with it so the artificial intelligence can learn how to process language, said Tony Landek, Woobo’s product manager. It’s the same reason Amazon saves all its voice data from the Echo and Apple does so with Siri recordings. The difference is that Amazon and Apple aren’t primarily recording children.

Landek said Woobo plans on abiding by COPPA’s regulations and deleting all recordings stored within 30 days. His hope is that the artificial intelligence learning is so efficient that eventually it wouldn’t need to store recordings. But he admits that’s a pipe dream, so his plan for now is to be as transparent as possible about storing children’s data.

It’s still in the works, but Landek is considering a dashboard on which parents can see everything that’s being recorded in a simple way, and delete it if they’d like. He believes that with smart toys, privacy isn’t the issue, transparency is.

“We’ve talked to a lot of parents and they think that’s awesome that their toys can improve over time with their kids talking to to it,” Landek said. “We tell them what data we’re going to collect, and they don’t seem too flustered by it.”

No kidding

People in the industry argue that parents don’t care that companies are watching their kids, they just want to be aware of it.

Toymakers see collecting data on children as a necessity to making smart toys better. With social media giants like Facebook and Google collecting data on users to make their products better, toy companies feel they are being excluded from a treasure trove.

“The government would love to make a zero-data policy on kids,” Watry said. “We as an industry need to stop them, because the only people who will win is everybody else.”

The Electronic Privacy Information Center, which first accused My Friend Cayla of violating COPPA laws in a US Federal Trade Commission complaint, is firmly against constant surveillance on kids.

Children are particularly vulnerable to ads, and susceptible to psychological development issues when raised getting used to toys that record their conversations, said Claire Gartland, EPIC’s director.

Smart toys can inspire children to trust their friends’ ability, my friend Cayla behind the company Genesis Toys did not respond to comment requests.

“It sounds really anti-utopian and must train children to prevent surveillance,” Gartland said. “There is no reason why these recordings need to be kept indefinitely.

In order to balance, these recordings are the easiest way to improve how to connect toys to play children. Exercise behavior is easy, because parents have been more aware of the data collection, toy companies can see their failure as a warning, what should not be done.

“We do not want the German prime minister to tell everyone to crush your Woobo,” Landek said. “It’s soft and fluffy, so it’s harder.

 

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