Fan Website Operator, Artist Arena, Agrees to Pay $1 Million to Settle FTC Charges that it Violated COPPA

Artist Arena, the operator of fan websites for music stars Justin Bieber, Rihanna, Demi Lovato, and Selena Gomez, has agreed to pay $1 million to settle Federal Trade Commission ("FTC") 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. COPPA (and the FTC's COPPA Rule) requires that website operators notify parents and obtain their consent before they collect, use, or disclose personal information from children under the age of 13.

According to the FTC, Artist Arena operated fan websites where children were able to register to join a fan club, create profiles, and post on other members' walls. Children also provided personal information to subscribe to newsletters. The FTC charged 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. According to the FTC's complaint, Artist Arena collected children's names, addresses, email addresses, birthdates, gender, and other information without properly notifying parents or obtaining their consent.

In a statement, FTC Chairman Jon Leibowitz said that "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." Chairman Leibowitz also noted that 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." The impact of the revisions to the COPPA Rule on industry, in fact, were the subject of a spirited discussion at a session yesterday during the annual CARU Conference.

This settlement, and the pending revisions to the COPPA Rule, should remind marketers of the FTC's vigilance in safeguarding on-line privacy, especially children's privacy.

*Mr. MacDonald was formerly a lawyer with Olshan's IP Department.

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