COPPA Case Study: Music Website Fined Millions
Here’s one from the COPPA case files.
Artist Arena, a division of Warner Music Group, paid 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 and BieberFever.com, and, DeminLovatoFanClub.net. The problem: Artist Arena’s 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.
Officials estimate that Artist Arena compromised over 100,000 records, and now it has to pay up.
Two-Minute COPPA Explanation
The Children’s Online Privacy Protection Act is the only federal online privacy law that hasn’t been savaged by the Supreme Court of the United States. It’s goal? To protect the personally identifiable information of citizens aged 13 and younger.
If Kids Use — or COULD use — Your Website or App, COPPA Compliance Is A Must
The COPPA rule outlines several regulations that websites, which are “directed at children,” must follow. One of the main stipulations is parental consent before data collection. Or, to put it another way: websites can’t collect any information about minors before getting their parent or guardian’s John Hancock.
In Artist Arena’s COPPA case, the company sent an email instructing parents to disregard the message and do nothing if they didn’t approve of the data collection. And that would have worked, if Artist Arena’s system didn’t register the child anyway. That’s right, according to reports, Artist Arena collected birthdays, emails, addresses and names before the parental consent check.
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 over 100,000 children, it could be charged $1,111,000,000. (Heck, we could cure the national debt with a few well-argued COPPA cases!) But, of course, that is an absurd number, and cases of this size usually settle for a few million. In this COPPA case, Artist Arena agreed to pay $1 million in damages. The company has yet to admit any wrongdoing.
COPPA Rules Are Getting Stricter
The Federal Trade Commission takes COPPA violations seriously and recently tightened the rules. People who run websites for children — or a website that children may be attracted to even if they’re not the target demo — should familiarize themselves with COPPA rules.