Celebrity Fan Website Pays $1 Million to Settle FTC’s COPPA Charges

by Ervin Cohen & Jessup LLP
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The operator of fan websites for music stars, like Justin Bieber and Selena Gomez, aimed at the “tweeners” audience has settled with the FTC over charges that it violated the Children’s Online Privacy Protection Act (COPPA) by improperly collecting personal information from children under 13 without their parents’ consent.  According to court filings, Artist Arena has agreed to pay $1 million to settle these charges.

According to the FTC, Artist Arena operated fan websites such as www.BeiberFever.com and www.SelenaGomez.com where children were able to register for a fan club, create profiles and post on members’ walls.  Children also provided personal information to subscribe to fan newsletters.  The FTC alleged that Artist Arena falsely claimed that it would not collect children’s personal information without prior parental consent and that it would not activate a child’s registration without parental consent.  http://www.ftc.gov/opa/2012/10/artistarena.shtm

This case serves as a clear warning that the FTC is more aggressively policing websites designed to attract young users.  As FTC Chairman Jon Leibowitz put it: “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.”  This last statement refers to the FTC’s proposed changes to COPPA, which are expected to be soon issued as new regulations and will be the subject of a future Bytes, Sites & Rights entry [see FTC Issues its Revised COPPA Rule].

COPPA requires that websites or online services that are “directed to children” must:

  1. Post a clear and comprehensive privacy policy on their website describing their information practices for children’s personal information;
  2. Provide direct notice to parents and obtain verifiable parental consent, with limited exceptions, before collecting personal information from children;
  3. Give parents the choice of consenting to the operator’s collection and internal use of a child’s information, but prohibiting the operator from disclosing that information to third parties;
  4. Provide parents access to their child’s personal information to review and/or have the information deleted;
  5. Give parents the opportunity to prevent further use or online collection of a child’s personal information; and
  6. Maintain the confidentiality, security, and integrity of information they collect from children.                                                                                                                                                                      

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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