ArtistArena.com to Pay $1 Million to FTC for COPPA Violation

Sites include artistarena.com . Published on October 11th, 2012. Written by Anthony West.

The debate over what is appropriate and what isn’t with regards to the collection of data on children who use the internet just got a little more interesting. In dollar terms, things have got interesting by the grand sum of $1 million.

This is the amount of money Artist Arena will have to pay over to the FTC for breaching sections of the COPPA Act when it collected data from users that were under 13—allegedly in an illegal manner.

What on earth is COPPA?

You might be wondering why on earth the FTC would care about data collection of underage users and perhaps what COPPA (sounds like ‘Copper’ doesn’t it?) has to do with anything. Well COPPA as a piece of legislation was born back in 1998 and taking effect in April 21, 2000 stands for Children’s Online Privacy Protection Act.

Wikpedia describes the premise of the legislation thus: “The act, effective April 21, 2000, applies to the online collection of personal information by persons or entities under U.S. jurisdiction from children under 13 years of age. It details what a website operator must include in a privacy policy, when and how to seek verifiable consent from a parent or guardian, and what responsibilities an operator has to protect children’s privacy and safety online including restrictions on the marketing to those under 13”.

That description is the friendly face of COPPA; beyond that it is a complex piece of legislation and the main reason many websites took the bold move to just not allow children under 13 to join their site—Facebook and Google of course, being very prominent examples.

So what did Artist Arena do?

Artist Arena became a division of Warner Music Group by acquisition back in 2000 and the division is responsible for maintain websites of popular artist and celebrities. RihannaNow.com, SelenaGomez.com, BieberFever.com and DemiLovatoFanClub.net are all run by Artist Arena.

The company got in hot water with the FTC because most of the sites under its management require users to sign up with their name, email and date of birth. As you can well imagine, Justin Bieber has a lot of fans who are 8. The FTC charged that Artist Arena knew many of these users were under 13 and failed to notify their parents of their membership to Artist Arena-run websites.

As David C. Vladeck, director of the FTC’s bureau of consumer protection puts it, “These were fan sites that knew that a very substantial percentage of users were 12 or under. There is really no excuse for violations like these.”

A district court in New York agreed with Vladeck and Artist Arena has settled, agreeing to over the $1 million. This settlement will no doubt muddle the waters and make it even more treacherous for companies like Facebook who want to start advertising to kids. As we all know, online advertising is all about ‘targeting’ and if you can’t collect data, you can’t target.

We’ll certainly be keeping an eye on this one.