WASHINGTON (AP) — A cellphone game for kids about U.S. geography, "Stack the States," gets rave reviews from parents. Its creator, Dan Russell-Pinson, considered making the 99-cent app better by adding a feature to allow children to play online against one another. But with the Federal Trade Commission issuing more stringent online child privacy rules, he's not even pursuing the idea.

"It would require all kinds of data sharing," said Russell-Pinson, the founder and sole employee of Freecloud Design in Charlotte, N.C. "I would be kind of afraid to do that."

The software industry is bracing for new regulations that it says will stifle creativity and saddle small businesses with legal and technical costs to ensure their cellphone apps don't run afoul of the rules. The changes, which the FTC is expected to approve this week, would update a 14-year-old law prohibiting the collection of personal information from preteens. It raises these questions: What is the value of a child's privacy on the Internet, and who should pay for it?