Artist Arena pays $1 Million to Settle FTC COPPA Charges That It Illegally Collected Children’s Information

On October 4th, 2012, the Federal Trade Commission (FTC) and Artist Arena, a company that runs celebrity Web sites for music stars Justin Bieber, Rihanna, Demi Lovato, and Selena Gomez have agreed to settle for $1 million. The FTC charges that Artist Arena violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children under the age of 13, including names, addresses, email addresses, birthdates, and gender without notifying parents and obtaining their consent.

The FTC’s COPPA Rule requires that Web site operators notify parents and obtain their consent before they collect, use or disclose personal information from children under the age of 13. The settlement will impose a $1 million civil penalty on Artist Arena, bar future violations of the rule, and require that Artist Arena delete information collected in violation of the rule. In addition, for the next five years Artist Arena must prominently display a link to the federal Web site, http://www.onguardonline.gov/, in places where they collect personal data. Artist Arena also agreed to strict record keeping and compliance monitoring requirements over the next ten years.

The FTC alleges that Artist Arena, which is owned by Warner Music Group, knowingly registered over 25,000 children under the age of 13 and maintained personal information from almost 75,000 additional children who began, but did not complete, the registration process. The company falsely claimed it would not activate a registration nor collect children’s personal information without prior parental consent. Artist Arena has neither admitted nor denied the allegations but no longer allows children under the age of 13 to register as members of their fan sites.

The FTC Chairman, Jon Leibowitz, said:

“Marketers 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 in the process of updating the COPPA Rule to ensure that it continues to protect kids growing up in the digital age.”

Businesspeople who want to learn about COPPA and how they can comply can visit You, Your Privacy Policy and COPPA - How to Comply with the Children's Online Privacy Protection Act for more information.

The complaint in its entirety can be viewed here. The consent decree, order for civil penalties, injunction, and other relief can be viewed here.

(Written by Jeff Wells, Fall 2012 IBLT Entrepreneurship Assistance Fellow)