A company that maintains fan sites for Justin Bieber and Rhanna faces a $1 million fine for collecting personal data from preteens without permission.
The Federal Trade Commission (FTC) filed a complaint in a New York district court on Tuesday against Artist Arena LLC, a company that creates and maintains fan websites for popular celebrities like Justin Bieber, Selena Gomez and Rihanna. The websites listed in the FTC complaint included RihannaNow.com, DemiLovatoFanClub.net, BieberFever.com and SelenaGomez.com.
According to the FTC, these four sites allowed children to register to join a fan club, create profiles, and post on the walls of other members. They also allowed preteens to provide information for subscribing to the site's fan newsletter. The complaint states that Artist Arena LLC knowingly registered over 25,000 children under the age of 13. The company also collected and maintained personal data from an additional 75,000 children who began the registration process but did not finish.
"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 said on Thursday. Information obtained from the children included names, addresses, email addresses, birthdates, gender and other information, the FTC said.
Collecting information without parental consent is a violation of the Children's Online Privacy Protection Act (COPPA) which states that websites must give special treatment to children 12 and under, and must obtain parental permission prior to collecting their information. Artist Arena's penalty was a $1 million fine and an order to delete all collected information that violated COPPA 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 said on Thursday that Artist Arena LLC agreed to settle for $1 million USD bar future violations of COPPA. However the settlement must be approved by a judge before the case is closed. Currently the FTC is working on updated COPPA rules that will make it even harder for companies and teen-focused websites to collect data from minors without parental permission.
The complaint can be obtained as a PDF here.