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A company that operates numerous music Web sites will have to pay the largest civil penalty levied to date over violating the Children's Online Privacy Protection Act (COPPA), and the Federal Trade Commission is apparently serving public notice that it intends to vigorously enforce the privacy rules.

UMG Recordings, Inc. has been ordered to pay $400,000, after charges were made by the Federal Trade Commission (FTC) alleging violations that include collecting personal information from children online without first obtaining verifiable parental consent.

In addition, Bonzi Software, a software distributor, will pay civil penalties of $75,000. The settlements also prohibit future COPPA violations, mandate the deletion of personal information collected, and allow the FTC to monitor COPPA compliance by the companies. [Editor's Note: For more on COPPA, see "Coping With COPPA" in our January 2004 issue.]

The FTC claimed that each of the companies collected birth date information through their online registration processes, and thus had actual knowledge that they were collecting and maintaining personal information from many children under the age of 13. The complaints also said the companies neglected to post clear and complete privacy policies, and failed to give sufficient direct notices to parents of what personal information they intended to collect from children.

According to the FTC, the settlements with UMG and Bonzi constitute the ninth and tenth COPPA settlements forged by the FTC since its COPPA Rule went into effect in April 2000.

Companies that direct their Web sites or online services to children under the age of 13 or that know should make sure they're in compliance. The FTC's Web site at www.ftc.gov/privacy/privacyinitiatives/childrens.html provides information that will help.

In addition, the FTC is releasing a business alert on the “actual knowledge” standard of its COPPA Rule to help Web site operators and online service providers in meeting the Rule's requirements. The alert can be accessed at www.ftc.gov/bcp/conline/pubs/alerts/coppabizalrt.htm.

A company that operates numerous music Web sites will have to pay the largest civil penalty levied to date over violating the Children's Online Privacy Protection Act (COPPA), and the Federal Trade Commission is apparently serving public notice that it intends to vigorously enforce the privacy rules.

UMG Recordings, Inc. has been ordered to pay $400,000, after charges were made by the Federal Trade Commission (FTC) alleging violations that include collecting personal information from children online without first obtaining verifiable parental consent.

In addition, Bonzi Software, a software distributor, will pay civil penalties of $75,000. The settlements also prohibit future COPPA violations, mandate the deletion of personal information collected, and allow the FTC to monitor COPPA compliance by the companies. [Editor's Note: For more on COPPA, see "Coping With COPPA" in our January 2004 issue.]

The FTC claimed that each of the companies collected birth date information through their online registration processes, and thus had actual knowledge that they were collecting and maintaining personal information from many children under the age of 13. The complaints also said the companies neglected to post clear and complete privacy policies, and failed to give sufficient direct notices to parents of what personal information they intended to collect from children.

According to the FTC, the settlements with UMG and Bonzi constitute the ninth and tenth COPPA settlements forged by the FTC since its COPPA Rule went into effect in April 2000.

Companies that direct their Web sites or online services to children under the age of 13 or that know should make sure they're in compliance. The FTC's Web site at www.ftc.gov/privacy/privacyinitiatives/childrens.html provides information that will help.

In addition, the FTC is releasing a business alert on the “actual knowledge” standard of its COPPA Rule to help Web site operators and online service providers in meeting the Rule's requirements. The alert can be accessed at www.ftc.gov/bcp/conline/pubs/alerts/coppabizalrt.htm.