Parents are being reminded to exercise caution about the toys that the purchase their children, after the United States Federal Trade Commission (FTC) announced it had taken action against a robot toy maker.

A complaint filed by the US Department of Justice (DOJ), accuses Apitor Technology of breaching the Children’s Online Privacy Protection (COPPA) Rule, by failing to notify parents and obtain their consent before their toys collected childrens' geolocation information.

Apitor's robot toys are controlled with a free Android app, that requires location sharing to be enabled. According to the FTC, Apitor integrated a third-party library called JPush into their app, that allowed JPush's developer to collection location data and use it for any purpose, including advertising.

Apitor breached the COPPA rule by not notifying parents that a third party was collecting their children's location. According to the legal filing, the Chinese-developed JPush library was collecting geolocation information sufficient to identify the street where a child lived, as well as their city or town.

This level of precision could potentially reveal a child's home address, what school they attended, where they go after school, or specific places they visit.

COPPA treats such detailed geolocation data as highly sensitive personal information, which is why there are strict rules about collecting it from children under the age of 13 years old.

Apitor has been issued with a US $500,000 fine - suspended for now, because the company claims that it is currently suffering financial problems.

Although Apitor has neither admitted nor denied the allegations, it has agreed to the settlement terms.

As such, Apitor has been permanently banned from collecting childrens' sensitive data again without proper parental permission. Furthermore, it will erase all of the data that was illegally collected from children, and will face years of monitoring to ensure continuing compliance.

"Apitor allowed a Chinese third party to collect sensitive data from children using its product, in violation of COPPA," said Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection. "COPPA is clear: Companies that provide online services to kids must notify parents if they are collecting personal information from their kids and get parents' consent—even if the data is collected by a third party."

Separately, the FTC has announced that Disney will pay a 10 million dollar fine in settlement of claims it failed to correctly tag YouTube videos as "Made for Kids" (MFK) - a label that tells the streaming site to not collect personal data and stop serving personalised ads, as required by COPPA.