Sony BMG to Pay $1 Million for Violating Children's Privacy

Company illegally collected information on its Web sites, FTC charged

By Lisa Wade McCormick
ConsumerAffairs.com

December 11, 2008

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Sony BMG Music Entertainment will pay $1 million to settle federal charges that it violated the Children's Online Privacy Protection Act (COPPA) by collecting, maintaining, and disclosing personal information from thousands of children under the age of 13 without their parents' consent.

The Federal Trade Commission (FTC) announced the settlement, which matches the largest penalty ever in a COPPA case.

The settlement stems from personal information Sony Music allegedly collected about some 30,000 children on nearly 200 of its Web site for musical artists, the FTC said.

Sony Music represents hundreds of popular musicians and entertainers, including many artists who are popular with children. The company also operates more than 1,000 Web sites for its musical artists.

"Sony Music requires users to submit a broad range of personal information, together with date of birth, in order to register for these sites," The FTC said in a statement released on Thursday. "On 196 of these sites, Sony Music knowingly collected personal information from at least 30,000 underage children without first obtaining their parents' consent, in violation of COPPA."

Many of those sites, the FTC added, let children create personal fan pages, upload pictures, and engage in private messaging.

"In this way, children were able to interact with Sony Music fans of all ages, including adults," the FTC said. That action could put children at risk, FTC officials warn.

"Sites with social networking features, like any Web sites, need to get parental consent before collecting kids' personal information," said FTC Chairman William E. Kovacic. "Sony Music is paying the penalty for falling down on its COPPA obligations."

That law prohibits unfair or deceptive acts or practices in connection with the collection, use, or disclosure of personal information from and about children under 13 on the Internet, the FTC said.

It also requires operators to notify parents and get their consent before collecting, using, or disclosing children's personal information.

The FTC's complaint alleges that Sony BMG Music Entertainment, a subsidiary of Sony Corporation of America, specifically violated COPPA by:

• Failing to provide sufficient notice on the Sony Music Web sites of what information the company collects online from children, how it uses that information, and its disclosure practices;

• Failing to provide direct notice to parents of Sony Music's information practices;

• Failing to obtain verifiable parental consent;

• Failing to provide reasonable means for parents to review the personal information collected from their children and to refuse to permit its further use or maintenance.

The complaint also alleges that Sony Music falsely claimed in its privacy policy that users who state they're under 13 will be restricted from participating in the company's Web page activities.

"In fact, Sony Music accepted registrations from children who entered a date of birth indicating that they were under 13," the FTC said.

Besides paying a $1 million civil penalty, Sony is prohibited from violating any provisions of COPPA and must delete all personal information it improperly collected and maintained about underage children.

The FTC said settlements reached with its agency are not necessarily admissions of guilt by the defendants.

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