The Federal Trade Commission said the proposed settlement with New York-based Artist Arena still must be approved by a judge. An agency investigation found that the company collected the names, addresses, e-mail addresses, birth dates, and gender of children 12 years and younger without asking permission from parents.
The site also registered children for fan newsletters without first getting permission from parents, which also breaks the Children’s Online Privacy Protection Act.
“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 proposals to update COPPA are underway to ensure the agency “continues to protect kids growing up in the digital age.”
The FTC said the company was well aware that it was collecting information from users 12 years and younger because users entered their birthdate during the registration process. Artist Arena operates fan Web sites where children were able to create clubs like “Idiot Club” for the band Green Day, post on member’s walls and create profiles of themselves.
The enforcement action comes amid controversial changes to the 1998 Children’s Online Privacy Protection Act to better reflect the use of smartphones, location-based applications and embedded social networking functions in Web sites.
Online giants Facebook, Twitter, Google, and Apple have protested portions of the proposal, saying they will be unfairly swept under the FTC’s watchful eye even if their Web partners — not them directly — are violating laws.
Privacy advocates reject the concerns, saying the firms are also benefiting from information collected from children and should be held to stronger standards.
Correction: This story originally did not report that the proposed settlement must still be approved by a judge. It has been corrected.