My Friend Cayla doll

The advent of Internet-connected toys, such as this year’s big sellers – My Friend Cayla and I-Que Intelligent Robot – are the subject of a complaint filed with the FTC by advocacy groups who claim the toys pose privacy risks to children.

The Wall Street Journal (WSJ) is reporting on the controversy brewing over the two dolls, both made by Genesis Toys, Inc., that collect and use personal information from children in violation of rules prohibiting unfair and deceptive practices.

“My Friend Cayla, a $60 interactive doll that users can talk to, uses speech recognition, a microphone and speakers to understand what a user is saying. The internet-connected toy submits the user’s queries through a Bluetooth connection to a smartphone app to come up with responses,” the WSJ reports.

The doll is preprogrammed with phrases that reference popular Disney movies such as The Little Mermaid which would be difficult for children to recognize as advertising.

A Disney spokeswoman says the company has no knowledge of the use of these phrases and has no agreement with Genesis to use them.

The I-Que Intelligent Robot functions in a similar way and sells for about $90.

My Friend Cayla is sold at Wal-Mart, Toys “R” Us and other retailers in countries around the world. The I-Que Intelligent Robot is sold at retailers in the U.K.

The complaint, which was filed by several groups, including the Campaign for a Commercial Free Childhood and Consumers Union, claims that Genesis Toys does not seek the consent of parents for the toys to collect children’s voice recordings and other personal data while they are using the toys. Genesis then sends the voice recordings to Nuance Communications, Inc., a speech-recognition software maker, that may use the data for other products. Little information is given parents about what information is collected, how it is used, or where it ends up, the complaint says.

“Children form friendships with dolls and toys with ‘personalities,’ and confide intimate details about their lives to them,” said Campaign for a Commercial Free Childhood executive director Josh Golin. “It is critical that the sensitive data collected by these toys be subject to the most stringent protections and not be used for manipulative and sneaky marketing.”

The introduction of Hello Barbie, another interactive doll sold by Mattel, sparked a similar controversy when it was launched last year. Outfitted in skinny jeans and a cropped metallic jacket to appeal to 6- to 8- year-old girls, the doll’s legs hold two rechargeable batteries and the small of her back hides a tiny USB port for charging. The necklace she’s wearing is a microphone which enables her to engage in two-way conversations.

As Newsweek reports, parents must first download a mobile app and connect the doll to a wireless network. Once this is done, their child’s conversations with the doll are transmitted over the Wi-Fi connection to the servers of ToyTalk, a San Francisco-based startup with which Mattel partnered to come up with the doll.

“Speech recognition software converts the audio into text, and artificial intelligence software extracts keywords from the child’s responses, triggering Barbie to reply with one of the 8,000 lines handcrafted by a team of writers,” Newsweek reports.

“What’s more, Barbie remembers every detail, building a cloud database of her owner’s likes and dislikes, which she can incorporate into future conversations. If a child tells Barbie that he or she has two mothers, for example, Barbie is equipped to say later on, ‘What’s something really special about your moms? What do you like to do together?’”

Sounds like fun, except that Barbie doesn’t keep secrets. The stored information is funneled into a “trend bucket” which shows Mattel and ToyTalk what little girls are talking about, thus enabling them to better target the doll’s conversations in the future.

If this doesn’t sound creepy enough, consider Mattel’s response when asked by Newsweek if the stored material might be used for other purposes.

“We will not use the information to make other product decisions within the Barbie line,” said Mattel spokeswoman Michelle Chidoni.

This leaves the door wide open for the possibility of the using the data in other ways, such as allowing “third-party vendors” to capitalize on the data for “research and development purposes.”

The bottom line is that parents should forgo these trendy new dolls until more stringent privacy protections are put in place.

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