Thursday, October 4, 2012

Music Fan Sites to Pay Privacy Fine

ERICA E. PHILLIPS/The Wall Street Journal

A division of Access Industries Inc.'s Warner Music Group that operates online fan clubs for pop-music stars will pay $1 million to settle charges it illegally collected personal information from the sites' child users.

Fan sites for Justin Bieber and others allegedly collected personal information on users under age 13.

The Federal Trade Commission filed charges in New York federal court Tuesday against Warner division Artist Arena LLC for violations of the Children's Online Privacy Protection Act, or Coppa, a law that forbids websites from collecting personal information from users under 13 years of age without parental consent.

According to the filing, more than 100,000 users' information was gathered illegally through websites for fans of four pop stars: Rihanna, Demi Lovato, Justin Bieber and Selena Gomez.

The four websites "attracted a significant number of children under age 13," according to the lawsuit, and "failed" to meet the requirements provided in Coppa.

In a proposed settlement filed the same day, Artist Arena agreed to pay a $1 million civil penalty, delete any information it collected in violation of the law and post a bold-faced link on all of its websites to FTC information on children's privacy protection. A judge has yet to approve the settlement.

A fan site for Rihanna is among the those in question.

Artist Arena didn't admit or deny wrongdoing in the filing, and a spokesman for the company declined to comment.

Warner Music Group acquired Artist Arena in December 2010. The sites in question all launched before that date. Artist Arena no longer owns the Rihanna, Selena Gomez and Demi Lovato fan sites. The Justin Bieber site has since changed its registration process to better comply with Coppa.

The sites in question were,, and

In a similar action last year, Walt Disney Co. DIS +1.58% subsidiary Playdom paid $3 million to settle FTC charges that 20 of its websites illegally collected kids' information without parental consent. That was the largest penalty to date in a Coppa case.

It is common for websites to collect personal information from visitors. Congress outlawed that practice for users under 13 with Coppa in 1998. Since then, advances in mobile and other online technology have opened loopholes in the law. The commission is expected to adopt new rules to close those loopholes by the end of the year.

Jeff Chester, an advocate for online consumer protection who led efforts to get Coppa passed, said companies are increasingly getting the message that this is a line they don't want to cross.

"Being named in a complaint or in a settlement is a digital badge of dishonor," Mr. Chester said. "Advertisers will certainly think twice before they'd want to see their brand on those pages."—Brent Kendall contributed to this article.

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