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Arthur T Knackerbracket has found the following story:

Woobo is a cuddly interactive toy that talks to kids. Also, it records their conversations.

It's a source of anxiety for any parent: getting rid of your child's beloved toy.

That's exactly what regulators in Germany told citizens to do with My Friend Cayla. And it wasn't enough to just throw Cayla away; parents actually had to destroy the blonde, peppy-looking doll.

The smart toy, which records conversations with kids, fell into the category of "hidden espionage devices," according to the regulators. My Friend Cayla was accused of asking children personal questions, like their favorite shows and toys, and saving the data to send to a third-party company that also makes voice identification products for police.

Just a day after the German ban was announced, Toy Fair kicked off in New York -- and smart toys were all over the place. Teddy Ruxpin, the storytelling bear beloved by '80s babies, returned with a high-tech makeover, as did Hologram Barbie, a voice-assistant animated sequel to the controversial Hello Barbie. Toy Fair also featured smart toy newcomers like Woobo, essentially a cuddly version of the Amazon Echo and Google Home speakers.

The contrasts illustrate the fine line between protecting one's privacy and the desire to create compelling and engaging products. It's the same broader debate that's raging throughout the technology and consumer electronics world, with companies like Google hoovering up personal data to better serve you ads. Only this time, the issue affects impressionable children.

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.

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.

-- submitted from IRC

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