Proposed changes to privacy laws could create major legal challenges for Facebook, Google and online marketing giants when dealing with Australian minors.
Under proposed legislation before parliament, organisations that collect personal information from individuals that are unable to give "informed consent" risk breaching privacy principles.
If passed by federal parliament, organisations will be subject to a new privacy principle requiring them to collect personal information using "lawful and fair means".
The Federal Privacy Commissioner's office said entities that collect information without gaining consent legitimately could find themselves falling short of their obligations under the new laws.
"Organisations that collect personal information from a person who lacks capacity to give informed consent to the terms and conditions governing its collection, risk breaching (the principle)," a spokeswoman for the office said.
The Commissioner's office was unable to give any firm guidance on what would qualify an individual as being able to give their informed consent.
"The Privacy Act does not specify an age after which individuals can make their own privacy decisions. Determining the decision making capabilities of a young person can be a complex matter, often raising ethical and legal questions.
"There will be younger persons, in certain circumstances, who have attained sufficient competence (maturity and understanding) to make their own decisions. Conversely, there may be older teenagers who lack such competence," a spokeswoman for the Commissioner wrote in a statement.
The new laws would also see the privacy commissioner given powers to financially penalise companies for breaches for the first time.
The commissioner would be given the power to seek court-ordered fines for organisations and individuals that make serious or repeated contraventions of Australia's privacy principles.
Jeff Goodall a partner at law firm Maddocks said online companies that rely on collecting personal information for their business models would be nervous about the proposed changes.
"Now doubt they've looked at those words and asked what it means and how it's going to impact on their business. What does fair mean? That would be the sort of lobbying that would be going on now I would expect," Mr Goodall said.
Broadband Minister Senator Stephen Conroy is investigating the impact of allowing Facebook to admit children under 13 to use its service.
Officially, Facebook bans under-13s. However, the site's age verification system is simple to fool and online audience ratings agencies estimate that about 200,000 Australian children under the age of 13 visit the site each month.
"(Senator Conroy) has asked the Consultative Working Group on Cybersafety for its views on this issue," a spokesman for the Senator said last month.
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