This is a case study of an online business busted for violating the Children’s Online Privacy Protection Act. If you operate a website or app, make sure you adhere to COPPA regulations — the only, current federal online privacy statute. Click here to set up an online privacy consult with an attorney, to ensure you’re operating on the right side of the law.
Artist Arena, a division of Warner Music Group, agreed to pay a hefty fine to settle a Children’s Online Privacy Protection Act (COPPA) claim.
Purveyors of online music entertainment, Artist Arena is a company associated with several websites, like SlenaGomez.com, BieberFever.com and DeminLovatoFanClub.net. The problem: Artist Arena websites allegedly collect the names, addresses and phones numbers of minors without first obtaining parental consent – a clear violation of the Children’s Online Privacy Protection Act.
According to records, officials estimate that the “records” of approximately 101,000 children, under the age of 12, were “compromised.”
Online Privacy Law For Websites: COPPA Explained
The Children’s Online Privacy Protection Act is the only federal online privacy law that hasn’t be knocked down in some manner by the Supreme Court of the United States. It’s goal, simply stated, is to protect the personally identifiable information of citizens aged 13 and younger.
If Kids Use — or MAY use — Your Website or App, You Have To Follow COPPA
The statute outlines several regulations that websites “directed at children” must follow. One of the main COPPA stipulations is that parents must provide consent before allowing children to reveal personal information.
In the case of Artist Arena, an email was sent to parents instructing them to do nothing if they did not “approve” and “no further action would take place.” The problem is that the Artist Arena’s system registered the child anyway. According to the filing, kids were able to submit their birthday, email, address and name before parental consent occurred.
According to the FTC, fines for violating the Children’s Online Privacy Protection Are as follows:
A court can hold website operators who violate the Rule liable for civil penalties of up to $11,000 per violation. The amount of penalties the court assesses may turn on a number of factors, including the egregiousness of the violation, the number of children involved, the amount and type of personal information collected, how the information was used, whether it was shared with third parties, and the size of the company.
In theory, if Artist Arena did inappropriately collect the data of 101,000 children, it could be charged $1,111,000,000. (Heck, technically, we could cure the national deficit with a few well-argued COPPA cases!) But, of course, that is an absurd number, and cases of this size usually settle in the single-digit-millions ballpark. In this COPPA case, Artist Arena has agreed to pay $1 million in damages if a judge approves. The company has yet to admit any wrongdoing.
COPPA Rules Are Getting Stricter
The Federal Trade Commission takes COPPA violations seriously. In fact, they love the legislation so much they’re about to tighten up the rules. If you run a website directed at children, or one that children like even if they’re not the target demo, make sure you familiarize yourself with the proposed COPPA changes. It could mean the difference between having a business a year from now and going bankrupt as a result of an FTC COPPA fine.
If you want to talk to an online privacy lawyer about your website’s COPPA compliance, contact Aaron Kelly or Daniel Warner.