The U.S. District Court for the Southern District of New York entered a consent decree between the United States and a company that operates fan club websites for popular recording artists such as Justin Bieber and Selena Gomez, the Justice Department announced today. The government’s complaint, filed in connection with the decree, charges the company with violating both the Federal Trade Commission (FTC) Act and the Children’s Online Privacy Protection Rule. The company has agreed to pay a $1 million penalty to settle these charges.
In a complaint filed on Oct. 2, 2012, the government alleged that Artist Arena LLC, a company based in New York City, violated the Children’s Online Privacy Protection Rule by collecting email addresses, street addresses, birth dates, phone numbers and other information from children under the age of 13 without obtaining parental consent. According to the complaint, some of the company’s fan club websites made no attempt to obtain parental consent, while others made attempts that fell far short of the rule’s requirements. The complaint alleged that in some cases, Artist Arena sent parents emails stating that the company would not collect personal information from children without prior parental consent when in fact it already had done so.
Additionally, the complaint alleges that Artist Arena also violated the FTC Act by making these false and misleading statements in emails to parents. Along with the civil penalty, the defendant agreed to injunctions barring future violations of the FTC Act and the Children’s Online Privacy Protection Rule and also agreed to delete all information previously collected from children under age 13.
The Federal Trade Commission, which oversees the Children’s Online Privacy Protection Rule, referred the case to the Justice Department. The lawsuit, United States v. Artist Arena LLC, was filed in the Southern District of New York.
“As more and more kids get online, the rules established by the Children’s Online Privacy Protection Act play an important role in helping parents to keep their kids safe,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “Companies that collect personal information from children must follow the law, and the Justice Department will work with the FTC to ensure that they do.”
Acting Assistant Attorney General Delery thanked the Federal Trade Commission for referring this matter to the Justice Department. The Consumer Protection Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Southern District of New York brought the case on behalf of the United States.