Markets Wired

The operator of fan websites for music stars Justin Bieber, Rihanna, Demi Lovato, and Selena Gomez has agreed to settle Federal Trade Commission 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.

The FTC charged that the website operator, Artist Arena, violated COPPA and the FTC’s COPPA Rule, which require that website operators notify parents and obtain their consent before they collect, use or disclose personal information from children under 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, among other requirements.

“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,” said FTC Chairman Jon Leibowitz.  “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.”

According to the FTC, Artist Arena operated fan websites such as www.RihannaNow.com, www.DemiLovatoFanClub.net, www.BeiberFever.com, and www.SelenaGomez.com where children were able to register to join a fan club, create profiles and post on members’ walls.  Children also provided personal information to subscribe to fan newsletters.  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, the FTC alleged.

According to the FTC, Artist Arena operated fan websites such as www.RihannaNow.com, www.DemiLovatoFanClub.net, www.BieberFever.com, and www.SelenaGomez.com where children were able to register to join a fan club, create profiles and post on members’ walls. According to the complaint, Artist Arena knowingly registered over 25,000 children under age 13 and collected and maintained personal information from almost 75,000 additional children who began, but did not complete the registration process. 

The FTC has a publication, Living Life Online, to help tweens and teens navigate the Internet safely.

The Commission vote to authorize the staff to refer the complaint and the proposed consent decree to the Department of Justice was 5-0.  The DOJ filed the complaint and proposed consent decree on behalf of the Commission in the U.S. District Court for the Southern District of New York.  The court entered the consent decree on October 4, 2012..

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent decrees have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.