The evidence continues to grow that the FTC is vigilant when it comes to children’s online privacy and is willing to seek large fines to make its point. In the latest settlement involving children’s online privacy, Sony BMG has agreed to pay a $1 million fine to settle various alleged violations of the Children’s Online Privacy Protection Act (“COPPA”). Given the large fines recently assessed by the Commission and the list of well-known companies that the Commission has targeted as COPPA violators, it may well be a good time to assess your own company’s COPPA compliance.
Sony BMG Music Entertainment operates over 1,000 websites for various musical artists. The company requires users to submit a range of personal information, along with date of birth, to register for these sites. On 196 of these sites, Sony allegedly collected personal information about 30,000 underage children without first obtaining parental consent. In addition, the FTC alleged, several of the Sony sites permit users to create personal fan pages, music reviews, upload photos or videos, post comments in online forums, and utilize personal messaging; allowing children to interact with users of all ages, including adults.
The FTC issued a complaint against Sony BMG, alleging that the company violated COPPA by failing to provide notice on its websites of what information is collected online about children, how such information is used and disclosed, failing to obtain parental consent, and failing to provide parents with Sony’s information practices and the ability to review the personal information collected from children. Sony’s $1 million penalty matches the highest amount collected for a COPPA case.
On a related note, earlier this week the Network Advertising Initiative, an industry self-regulatory group, released guidelines related to “behavioral advertising” or the monitoring of individual consumer internet activity designed to focus advertising content to individual interest. The guidelines prohibit using behavioral advertising techniques with children under age 13.