Music Star Website Operator Faced with $1 Million FTC COPPA Settlement

Published On October 8, 2012 | By Melissa Maalouf | FTC & State AG, General, Litigation, Privacy
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Artist Arena, the operator of fan websites for celebrities Justin Bieber, Rihanna, Demi Lovato, and Selena Gomez, has agreed to settle FTC charges that it violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting personal information from children under 13 through its websites without first obtaining parental consent.

COPPA requires that website operators notify parents and obtain their consent before they may collect, use, or disclose personal information from children under 13.

The FTC’s complaint alleged that Artist Arena violated the rule by collecting the names, addresses, email address, birthdates, gender, and other information from fans, including children under the age of 13, who signed up on the music star websites (www.RihannaNow.com, www.DemiLovatoFanClub.netwww.BeiberFever.com, and www.SelenaGomez.com) during website registration or who subscribed to a fan newsletter.  Even if a user’s registration indicated that he/she was a child under the age of 13, the user was still able to complete registration, join a fan club, create a profile, and post on other members’ walls.  The FTC also alleged that Artist Arena falsely stated that it would not collect children’s personal information or activate a child’s account without prior parental consent.

The FTC claimed that Artist Arena knowingly registered over 25,000 children on its websites and collected personal information from 75,000 additional children who started, but did not complete, the registration process.

In addition to the $1 million penalty, the settlement bars Artist Arena from engaging in future COPPA violations; requires Artist Arena to delete information collected in violation of COPPA; and mandates that Artist Arena include a link to www.OnGuardOnline.gov (the FTC’s website containing children’s online safety tips) in the privacy policy, direct notice, and information collection points on any website where it collects personal information from children.

As stated by FTC Chairman Jon Leibowitz following the release of the proposed consent decree, “[m]arketers need to know that even a bad case of Bieber Fever doesn’t excuse their legal obligation to get parental consent before collecting personal information from children.”

The FTC is currently in the process of updating the COPPA Rule, and is reviewing comments it received on 9/24/12 about the FTC’s latest proposed revisions.

 

About The Author

Melissa Maalouf’s practice focuses on advising a broad range of clients, from start-ups to established companies, on both U.S. and international data privacy and security issues. Melissa assists clients in drafting appropriate website disclosures, implementing legally-compliant e-commerce flows, responding to FTC Section 5 and state AG enforcement actions, analyzing advertising claims, and children’s online privacy and safety issues. She also regularly helps clients obtain certification under the EU-US Safe Harbor and navigate compliance with divergent international privacy laws.

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