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Sony Dinged $1 Million for Child-Privacy Breach

By Ryan Singel, Kevin Poulsen, Sarah Lai Stirland, Kim Zetter, and David Kravets

Sony Music agreed Thursday to pay $1 million to settle allegations that it knowingly collected and disclosed personal information of as many as 30,000 children under the age of 13.

It matched the Federal Trade Commission's largest fine levied under the Children's Online Privacy Protection Act. In 2006, the FTC dinged social-networking site Xanga.com $1 million on similar allegations. The settlement marked the 13th enforcement actionthe FTC has undertaken against companies for violating the act -- bringing to $3 milliion the amount in total fines.

According to an FTC lawsuit(.pdf) Sony unlawfully obtained and publicized personal information, including e-mail addresses and photos, from children under 13 via the registration process on its roughly 1,100 music sites.

Under the 1998 Children's Online Privacy Protection Act, known as COPPA, website operators must obtain the consent of parents or guardians before they may lawfully collect or publish personal identifying information of children under 13.

"On certain of the company's music sites, after collecting dates of birth from children indicating that they were under 13, Sony Music enabled children to create user profiles in the form of personal fan pages, through which children were able to interact with other Sony Music fans, including adults," the FTC's lawsuit alleged. "Sony Music publicly posted and made available for viewing on the internet certain items of information submitted by children in creating their user profile, including any photos they may have uploaded, as well as their gender, age, city and country."

The law cannot prevent kids under 13 from faking their dates of births or providing bogus e-mail addresses of their parents in a bid to acquire parental consent. Still, Sony collected and/or broadcasted on its websites information from 30,000 children who listed their dates of birth as being under 13.

"Sony Music is paying the penalty for falling down on its COPPA obligations," FTC Chairman William Kovacic said.

The lawsuit alleges that, since 2004, at least 30,000 children under 13 had registered on Sony's music websites, and that Sony had "actual knowledge" that it was breaching the law.

Businesses often use information they collect from web users for marketing purposes.

The Federal Trade Commission also faulted Sony for having a deceptive privacy policy. The policy indicated that if children marked they were under 13, they would be "restricted from participating in Sony Music's web page activities."

A spokeswoman for Sony was not immediately available for comment. The FTC said Sony is now complying with the protection act.

See Also:

• When Complaining About Your Job Becomes a Privacy Violation ...
• Barack Obama's Privacy Challenge
• Google Privacy Practices Worse Than ISP Snooping, AT&T Charges ...
• Bill Proposes Privacy for Americans' Laptops at Border
• Ask.com's Privacy Tool Tracks Users, Groups Tell Feds -- Updated ...
• Help Name the Homeland Security Privacy Pig - Closed
• Facebook Expands Privacy Features, Including a Faux One
• Bush Nominates Three to Empty Privacy Board
• ISPs Facing Privacy Scrutiny Likely to Point At Google

Full post as published by Threat Level on December 11, 2008 (boomark / email).