The Federal Network Agency (FNA) which enforces bans on surveillance devices has classified the My Friend Cayla doll,manufactured by the American company Genesis Toys, as an illegal espionage apparatus".
The doll, distributed across Europe by the UK-based Vivid Toy Group,allows children to access the internet through speech recognition software, and to control the toy via an app.
It works by sending a child's audio question wirelessly to an app on a digital device, which translates it into text and searches the internet for an answer, then sends back a response that is voiced by the doll.
"Items that conceal cameras or microphones and that are capable of transmitting a signal, and therefore can transmit data without detection, compromise people's privacy," FNA head Jochen Homann said.
His agency has warned retailers that they could face unspecific fines if they continue sellingthe item.
German regulations do not allow manufacture, sale or possession of surveillance devices disguised as another object and violating the lawcan result in a prison term of up to two years.
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Head of Geramny's Federal Network Agency Jochen Homann[/caption]The ruling by the German federal agency may prompt EU-wide consequences for toymakers.
Pointing to the ruling, EUs Commissioner for Justice, Consumers and Gender Equality Vera Jourov said,Im worried about the impact of connected dolls on childrens privacy and safety.
Vivid Toy Group has not responded to inquiries regarding the German ruling. The company has previously stated that instances of hacking using the doll were isolated and carried out by specialists.
The FNA ruling came after a Saarbrcken University student Stefan Hessel raised concerns about the smart doll, which was voted one of the top 10 toys of the year in 2014 by the German toy trade association.
Access to the doll is completely unsecured. There is no password to protect the connection, said Hessel as quoted in the local daily Saarbrucker Zeitung.
He further insisted that hackers could access the doll via its bluetooth connection from a distance of up to 15 meters, listening in on conversations as well as speaking directly to the child playing with it.
The German regulators in a statement warned that anything a child says, or other people's conversations, could be recorded and transmitted without parents' knowledge.
