Bieber online fan site fined $1 million for violations of kids' privacy

Sites of Rihanna, Selena Gomez, Demi Lovatofan clubs also involved

By Martin Merzer

 The operator of Internet fan clubs for popular singers Justin Bieber, Rihanna, Demi Lovato and Selena Gomez encouraged thousands of young children to "grab a parent with a credit card," join the clubs and improperly share personal information, according to federal prosecutors and regulators.

Artist Arena LLC, the New York-based company that ran the websites, agreed this week to settle a variety of charges filed by the Federal Trade Commission and the U.S. Justice Department. The company agreed to pay a $1 million fine, delete the improperly collected personal information and promise to refrain from similar activity in the future.

More than 25,000 of the children ensnared by the websites were under 13 years old and about 75,000 other children provided some personal information without completing the registration process, according to the government. The involved sites tended to appeal primarily to young fans: BieberFever.com, RihannaNow.com, SelenaGomez.com and DemiLovatoFanClub.net. The latter site was taken down.

Clockwise from top left: Justin Bieber, Rihanna, Demi Lovato, Selena Gomez

"Marketers need to know that even a bad case of Bieber Fever doesn't excuse their legal obligation to get parental consent before collecting personal information about children," FTC Chairman Jon Leibowitz said in announcing the settlement.

He said Artist Arena repeatedly violated the federal Children's Online Privacy Protection Act. That law, passed in 1998, prohibits marketers from collecting personal information from children under 13 without their parents' consent.

Privacy experts were appalled by the case, which they said was particularly notable because the firm preyed on young children and often involved their parents' credit cards -- and the information associated with those accounts. The singers were not implicated in the violations.

"Online privacy is a huge problem for everyone, but when you're dealing with children, it becomes even more of a problem because they may not be fully aware of the techniques and the types of technologies that exist to gather data online," said Paul Stephens, director of policy and advocacy for the Privacy Rights Clearinghouse in San Diego, a nonprofit privacy advocacy group.

"They may end up revealing personally identifiable information without knowing how that information is going to be used," Stephens said. "You need to read a privacy policy, and most children are not going to have the necessary skills to know what that means. Even many adults don't have the skills to fully understand those policies."

Representatives of Artist Arena did not respond to requests for comment. The company's website offers concert tickets and offers to create fan clubs for and provide other services to singers and other artists by saying that its online managers "take time to develop and market each community on a daily basis.

"Working not only with the artist but the fans themselves, fosters community growth," the company says. "This allows the fans to stay close to the artist while receiving all the best and most exclusive content available."

According to the federal government's complaint, Artist Arena's practices varied to some degree from fan club to fan club, but the company basically encouraged children to join the clubs, create personal profiles, subscribe to newsletters (for a fee), post on members' Internet "walls" and sometimes purchase paraphernalia.

Regarding the BieberFever.com club, for instance, prospective members -- who were to be charged $8.99 per month -- were told to submit their email address, a user name and password, their country of residence and their birth date. Anyone whose birth date indicated an age under 13 was required to enter a parent's name and email address, but the user -- regardless of age -- immediately was told that the registration was successful and that he or she was logged in.

Early in the website's existence, the parent would receive an email saying that that child could not be logged in until the parent approved. Later, that element of parental control was dropped from the website, the government said. Children were told to "Grab a parent with a credit card" and the parent -- or the child holding the parent's credit card -- then would enter delivery, billing and credit card information to the account profile."

"It does sound somewhat underhanded, to put it mildly," Stephens said.

In other cases, the kids' cellphone numbers (the Rihanna fan club) and street addresses (the Demi Lovato fan club) were requested.

The government's complaint charged that Artist Arena:

• "In numerous instances" collected personal information online from children under 13 years old without providing direct notice to their parents or obtaining parental consent.
• Misled website users by saying or implying that it would not collect personal information from children without parental consent or would not activate an account without that consent.

In addition to the fine, the order to delete personal data and the requirement to not repeat the violations, the settlement also compels Artist Arena to place "a clear and conspicuous notice" on the fan club sites that directs visitors to OnGuardOnline.gov, a collection of tips from the FTC regarding practices to protect kids' privacy online.

Other online privacy resources for parents and others can be found at its websites "Living Life Online" and "The Children's Online Privacy Protection Act: What Parents Should Know."

"The FTC has been doing a really good job of trying to enforce its privacy responsibilities," Stephens said. "Nowadays, kids are using the Internet through various technologies, perhaps smartphones and certainly computers, from a very young age, so it's really a matter of parents instructing them about what is appropriate."

See related: The latest privacy invasion: retailer tracking

Published: October 4, 2012

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