Web site operator fined $1 million for illegally collecting data on children


Singer Justin Bieber performs during his "Believe" tour at The Staples Center on October 2, 2012 in Los Angeles, California. (Kevin Winter/GETTY IMAGES)
October 3, 2012

The operator of fan Web sites for musicians Justin Bieber, Rihanna and Demi Lovato has agreed to pay a $1 million fine for illegally collecting information about underage users, a violation of child online-privacy laws.

The Federal Trade Commission said Wednesday that the New York-based firm Artist Arena collected names, addresses, e-mail addresses, birth dates and genders of children age 12 and younger without asking permission from parents.

The site also registered children for fan newsletters, which also requires parental permission.

“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,” FTC Chairman Jon Leibowitz said in a statement, adding that a review of the Children’s Online Privacy Protection Act is underway to ensure that the agency “continues to protect kids growing up in the digital age.” The agency plans to update the rules by the end of the year.

The FTC’s proposed settlement with Artist Arena must be approved by an administrative judge.

The FTC said the company was well aware that it was collecting information from underage users because the children entered their birthdates during the registration process. Artist Arena operates fan Web sites where children are able to create groups such as “Idiot Club” for the band Green Day, post on members’ walls and create profiles of themselves.

The proposed settlement follows a string of FTC actions against Web sites that have violated the Children’s Online Privacy Protection Act. In March, it fined social game site RockYou $250,000 for collecting personal information from 179,000 underage users. Last November it found that Skid-e-Kids, a social network, also illegally collected children’s information without consent from parents.

The FTC said its update of child privacy rules is long overdue. The current rules are 12 years old, created before smartphones, location-based applications and embedded social-networking functions in Web sites became prevalent.

Online giants Facebook, Twitter, Google and Apple have protested portions of the proposal, saying they will be unfairly brought under the FTC’s watchful eye even if they are doing nothing wrong but their Web partners violate laws.

Privacy advocates reject the concerns, saying the firms are also benefiting from information collected from children and should be held to higher standards.

Cecilia Kang is a staff writer covering the business of media and entertainment.
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