Intellectual Property, Internet & E-Commerce Articles
FTC Announces $1 Million COPPA Settlement
February 01, 2009
The U.S. Federal Trade Commission (FTC) recently announced a $1 million settlement with Sony BMG Music Entertainment (Sony Music) to resolve charges that Sony Music violated the Children's Online Privacy Protection Act of 1998 (COPPA). The FTC Complaint alleged that Sony Music improperly collected, maintained, and disclosed personal information from thousands of children under the age of 13 on certain Sony Music websites, without their parents' consent.
COPPA and its implementing rule prohibit the unauthorized or unnecessary collection of children's personal information online by operators of commercial websites or online services. COPPA rules describe website operators' general obligations to protect childrens' privacy and safety online, set out the information that website operators must include in privacy policies, and provide guidance about when/how website operators must notify parents regardling collection/consent to disclosure of childrens' information.
The Consent Decree entered by the U.S. District Court for the Southern District of New York on December 15, 2008 provided some significant remedies. In addition to the $1 million civil penalty, Sony Music was prohibited from violating any provision of the COPPA Rule, required to delete all personal information collected and maintained in violation of COPPA, required to distribute the FTC's publication How to Comply with the Children's Online Privacy Protection Rule to its personnel, must link to FTC consumer education materials, and must comply with detailed compliance, reporting, and record-keeping requirements under COPPA. The Consent Decree also addresses the social network aspect, in that Sony Music must include links to the social networking section of the FTC's onguardonline website on any Sony Music site that allows users to create publicly-viewable profiles
The FTC Complaint is not a finding or ruling that Sony Music actually violated the law, and the Consent Order is for settlement purposes only and do not necessarily constitute an admission by the defendant of violation of any law.