$1 Million COPPA Penalty for Sony

Children's Online Privacy Protection Act (COPPA) violations cost Sony...
Sony allegedly violated the FTC’s COPPA Rule, and Section 5 of the Federal Trade Commission Act by knowingly collecting personal information from at least 30,000 underage children on 196 of the company’s interactive music fan sites without first obtaining parental consent. Sony collected this information despite representations in its privacy policy that users who indicated they were under age 13 would be restricted from participating in the company’s web page activities.

In addition to the $1 million penalty, the consent decree requires Sony to delete all personal information collected and maintained in violation of COPPA, and link to certain FTC consumer education materials for the next five years.
Source: COSN Member Bulletin 12/15/2008
From the actual report:
Many of these sites also enable children to create personal fan pages, review artists’ albums, upload photos or videos, post comments on message boards and in online forums, and engage in private messaging. In this way, children were able to interact with Sony Music fans of all ages, including adults.

“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.”

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