In recent years, a number of toy makers have come under fire for developing children's smart devices that turn out to be privacy nightmares, and a company called VTech Electronics has just settled the US Federal Trade Commission's first case involving an internet-connected toy. VTech will pay the FTC $US650,000 over charges it violated the Children's Online Privacy Protection Act (COPPA) and "failing to take reasonable steps to secure the data it collected," according to an FTC statement released this week.