Under the terms of the settlements, Yelp will pay a $450,000 civil penalty while privately held TinyCo will pay a $300,000 civil penalty, the FTC said.
A law called the Children's Online Privacy Protection Act, or COPPA, requires that companies collecting information online about children under age 13 follow a number of steps to ensure that the children's information is protected.
The FTC alleged that Yelp, between 2009 and 2013, collected personal information from children through the Yelp app without first notifying parents and obtaining their consent.
Several thousand registrants provided a date of birth showing they were under 13 years of age, and Yelp nonetheless collected information from them including name, e-mail address and location, as well as any information that they posted on the site, the agency said.
Yelp also agreed to delete information it collected from consumers who stated they were 13 years of age or younger at the time they registered for the service.
"When this problem was brought to our attention, we fixed it immediately and closed the affected users' accounts," Vince Sollitto, Yelp's vice president for communications, said in a blog post. Yelp "doesn't promote itself as a place for children," he added.
Yelp shares were near steady in afternoon trading at $76.57.
The FTC's complaint against TinyCo alleged that the company targeted young children with many of its apps featuring brightly colored animated characters, which made it subject to the COPPA rule.
Many of those apps, such as Tiny Pets, Tiny Zoo, Tiny Monsters, Tiny Village and Mermaid Resort, included an optional feature that collected e-mail addresses from users, including children younger than age 13.
© Thomson Reuters 2014
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