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Sony Hit With $1M Penalty For COPPA Violations 85

coondoggie writes "It really isn't a big enough penalty, and the company admitted no guilt, but Sony BMG Music Entertainment today agreed to pay $1 million as part of a settlement to resolve Federal Trade Commission charges that it knowingly violated the privacy rights of over 30,000 underage children. Specifically the FTC said the company violated the agency's Children's Online Privacy Protection Act (COPPA) and the FTC did say the penalty was its largest ever in a COPPA case. To provide resources to parents and their children about children's privacy in general, and social networking sites in particular, the penalty order requires Sony Music to link to certain FTC consumer education materials for the next five years."
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Sony Hit With $1M Penalty For COPPA Violations

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  • And... (Score:4, Insightful)

    by RulerOf ( 975607 ) on Friday December 12, 2008 @07:09AM (#26088263)
    Do the violated children get the money?
    • Re:And... (Score:5, Funny)

      by Krneki ( 1192201 ) on Friday December 12, 2008 @07:47AM (#26088463)

      No, but they can get some candy.

      Come, I have some of them in my van.

    • Re:And... (Score:4, Insightful)

      by Timothy Brownawell ( 627747 ) <tbrownaw@prjek.net> on Friday December 12, 2008 @08:33AM (#26088749) Homepage Journal

      Do the violated children get the money?

      I thought it was the parents who were "violated", by not getting the required assistance in keeping track of what their children are doing online (because putting the computer where they can see it is too hard)?

      • A good parent would teach their kids not to do bad stuff online, and have a good rootkit installed on the machine the kids use to make sure they don't. :-P
        • Re: (Score:1, Redundant)

          See, Sony isn't all bad. Weren't they shipping rootkits with music CDs for awhile?

          Oh well, there is no way I am giving up the opportunity to tell people that Sony violates children, even if they were nice enough to give everyone free rootkits.
    • No, it means the government now has another million dollars with which to look for and prosecute COPPA violations.

    • Seriously!? How does paying a fine fix anything? What's there to even fix? I hope these ridiculous fines go to at least the national debt.

      The COPPA is a joke. 30,000 Underage kids violated? Yeah right... they were just playing video games. The FTC says the COPPA is necessary and makes people give them money when they violate one of their "rules". Wake up parents, the world is, and always has been a dangerous place. Live with it, learn about it, and do what you can to protect your family. The FTC i
  • by syousef ( 465911 ) on Friday December 12, 2008 @07:14AM (#26088285) Journal

    Or do they weasel their way into spending $1M on anti-"Piracy" propaganda instead? "Look we're spending money educating the children!"

    However as I'm sure others will point out, Sony shareholders will only lose pocket money in lost profits (or alternately perhaps the execs can make do with 16 hookers at the corporate retreat instead of 20 this year). Boo-hoo.

    • by theaveng ( 1243528 ) on Friday December 12, 2008 @08:16AM (#26088633)

      >>>Or do they weasel their way into spending $1M on anti-"Piracy" propaganda instead?

      You're probably right. I recall when Tobacco companies were "fined" and forced to produce anti-smoking commercials. The problem was that the spokespeople for these ads were geeks & nerds, so the message sent was precisely opposite to what the government intended ("stop smoking and you'll be a geek like this guy").

      IMHO the CD Cartel settlement was better - companies were forced to set-aside X million dollars and refund money to any customer who asked for it. (I received $20 and so too did my mom, my brother, and two nieces.) That's a real punishment that also benefits the people who were wronged.

      • by richlv ( 778496 )

        ...and all that is not claimed is then taken away from them, i hope

        • The X million dollars was held for a set amount of time (6 months I recall) and then divided according to how many customers asked for refund. So if few asked I might $50, or if many asked I might only get $10.

    • by mcgrew ( 92797 ) *

      It doesn't matter, as you say it's just another cost of doing business. I'm sure they made more than a million by breaking the law.

      But a point I haven't seen yet is why, after all the illegal, immoral, evil, disgusting things they've done, idiots still buy their tainted goods.

      IMO anyone who would buy a piece of electronic gear, especially a computer, from a company that would put rootkits on music CDs is dumb as a box of rocks. I'd like someone here who still buys Sony anything to try and explain to me why

      • I'm actually going to side with Sony BMG on this one. It should not be their responsibility to control children access to their content. If they did, the only thing that would happen is that children will lie about their age (I did this all the time for certain unmentioned content back when I was 14 and just getting on the Internet). Parents need to first teach their kids to not be stupid, and they need to realize that a 12 year old being sexually solicited online is not going to damage them. Parents sh
        • Re: (Score:3, Interesting)

          by mcgrew ( 92797 ) *

          I'm not talking right and wrong, I'm talking about legal and illegal. I agree that COPPA is a bad law, but Sony is demonstrating once again that they are no better than the Governor of Illinois or the former head of NASDAQ, both of whom were arrested this week. [yahoo.com]

          I want to know when Sony's CEO is going to be indicted for placing that rootkit on my computer. If I did that to them I'd be behind bars.

  • Well, I don't know how this really works, but they could be sued forever for this if they keep doing it, right?

    Maybe someone could sue any of the RIAA companies for looking at their p2p packets.

    • Re: (Score:3, Insightful)

      by liquidpele ( 663430 )
      Problem is, if the fines aren't enough it just becomes cost of business. That's why there is such a problem with illegal dumping - it's usually more expensive to properly dispose of the stuff than to pay the fines if you get caught.
  • by Ztream ( 584474 ) on Friday December 12, 2008 @07:28AM (#26088349)

    There are non-underage children? I guess technically everyone is someones child, but..

    • by YrWrstNtmr ( 564987 ) on Friday December 12, 2008 @07:40AM (#26088425)
      There are non-underage children?

      Yes. COPPA only applies to those under 13.
      • There are non-underage children? Yes. COPPA only applies to those under 13.

        GP asked (rethorically, I assume) whether a child can be "non-underage", not whether an underage person can be "not a child".

        So, does "underage children" convey any more information than just "children"? I don't think so, but you know, legalese is weird that way.

        • Re: (Score:3, Informative)

          by dcsmith ( 137996 )

          There are non-underage children? Yes. COPPA only applies to those under 13.

          GP asked (rethorically, I assume) whether a child can be "non-underage", not whether an underage person can be "not a child".

          So, does "underage children" convey any more information than just "children"? I don't think so, but you know, legalese is weird that way.

          Ummm, Let's try to answer in pseudocode then...

          switch (AgeofPerson) {
          case lt 13: Child = True, UnderAge=True;
          case ge 13: Child = True, UnderAge = False;

          Whether we agree with the concept of 'underage child' vs. 'child' or not, it is clearly defined in this context.

          • IANAL, but fairly sure child 13, 13-17 minor, underage is context specific. It was redundant. But I guess for people that may have no knowledge of COPPA or any of the real issues involved, as they try to write for a broad audience, the redundancy gives clarity to some who might not be able to follow.
            • by dcsmith ( 137996 )

              IANAL, but fairly sure child 13, 13-17 minor, underage is context specific. It was redundant. But I guess for people that may have no knowledge of COPPA or any of the real issues involved, as they try to write for a broad audience, the redundancy gives clarity to some who might not be able to follow.

              Hmph. I hate it when someone disagrees with me and makes sense. I checked and COPPA does define a child as being under age 13. The term "underaged" isn't used. You were right about the context... Good call.

        • Re: (Score:1, Insightful)

          by Anonymous Coward

          So, does "underage children" convey any more information than just "children"? I don't think so, but you know, legalese is weird that way.

          Uh, yes it does. "underage" has nothing to do with the age of the individual (child or adult) but an individuals age relative to some law or regulation.

          After all, the drinking age in the United States is 21. Would you consider an "underage" 20 year old a "child"? Of course not (though one might use the term to describe the persons relative youth). They are by all legal accounts an adult despite still being underage to drink.

          So, to answer your question, yes underage DOES give more information than just "

        • Since most people <del>are pretty stupid, and </del> wouldn't assume when they say children that they mean the legal definition of child, they are redundant to get the point across stronger, which is sadly often more effective than just saying the right thing if too many people won't understand. This is a 'news' article, not a white paper on privacy rights. There are limits.

          note: feeling suborned today. I want my damn strikethrough.
  • ...because it seems there is no statute that hasn't been overturned. Please help me to be better educated. Here's the best I could find on short notice...

    COPA, CIPA, COPPA, etc.

    http://www.washingtonpost.com/ac2/wp-dyn/A39748-2002May31?language=printer [washingtonpost.com] http://www.raphkoster.com/2008/07/23/child-online-protection-act-overturned/ [raphkoster.com]

    Why did Sony/BMG really pay money?

    E P.S.Sony/BMG when you send me your cute litle notes, do it on letterhead with a real signature. Automated PGP sigs have no validity.

  • by Darundal ( 891860 ) on Friday December 12, 2008 @07:38AM (#26088417) Journal
    The FTC's complaint alleges that Sony Music violated COPPA by failing to provide sufficient notice on the Sony Music Web sites of what information the company collects online from children, how it uses such information, and its disclosure practices; failing to provide direct notice to parents of Sony Music's information practices; failing to obtain verifiable parental consent; and, failing to provide a reasonable means for parents to review the personal information collected from their children and to refuse to permit its further use or maintenance.

    Seems to me like they were just a big, fat example, and this is possibly a sign of things to come.
  • A sexually-mature teenager with independent thoughts is clearly not the same as an immature child.

    And yet the law treats them identically. Just as we allow teens to start driving at age 16, perhaps we should allow them to register on websites. After all it's certainly safer to "submit a broad range of personal information, together with date of birth" to mileycyrus.com than to drive a 4000 pound vehicle. We forbid the former, but allow the later??? Not logical.

    • Re: (Score:3, Informative)

      by slimjim8094 ( 941042 )

      COPPA applies to under-13 only.

      See YrWrstNtmr's post.

    • theaveng: I know you wouldn't dare do 5 minutes of research, or read the summary, or the article, but at least read the comments. COPPA only affects those 13 and younger. The reason for that has to do with puberty, and whether or not a person has finished going through it.
    • child, legally, means 13. There are BIG legal differences between children and minors (mutually exclusive, someone is only a child OR a minor, or neither.). So be happy, it is the way you wished. The term 'underage children' was a very poor choice of words, obviously.
  • by Anonymous Coward

    So, it costs $1000000/30000 = $33.33 to violate one childs privacy? If they had violated only a single childs privacy, would they really have gotten away with a $35 dollar fine?

    A $1M penalty is a joke.

  • My mom and dad always warned me as a kid to never follow strange Sony execs into their van even if they promise candy or DRM-free MP3s.
  • Do the maths (Score:5, Interesting)

    by zotz ( 3951 ) on Friday December 12, 2008 @09:08AM (#26088995) Homepage Journal


    1000000/30000 = 33.34 rounded

    So, that's under thirty four dollars per child.

    Now how much do all these jokers want to get when a child violates the "privacy rights" of a song?

    Not that anyone actually did anything wrong in this case mind you. No.

    all the best,


    • At least we now know what violating a child costs.

      But hey, maybe they got a volume discount. Although... ain't it so that if you happen to repeat a crime more than once you get charged extra for repeated offense?

  • Is it because if they had a proper disclaimer which asked the user's age before use of a particular Sony product, it would raise suspicion about what exactly the product was doing behind the scenes?
    • I have seen different very clear disclaimers, sometimes they say 'content not suitable for children
      I can see people making the argument you mention, but I think it is false. It is perfectly possible to clearly express restrictions without freaking people out, like content rated PG. No one freaks out, but parents are informed that it may not be the kind of movie to leave a small child in front of unattended (if ever such an appropriate thing).
  • by A Guy From Ottawa ( 599281 ) on Friday December 12, 2008 @09:33AM (#26089209)

    So the RIAA typically goes after $750 per song for a COPYRIGHT violation (but has asked for much more if I remember correctly).

    For violating the PRIVACY of CHILDREN, Sony is charged $33 per child...

    Isn't it amazing what society values more? Oops...scary is the word I was looking for, not amazing.

    • I think $750 is the typical pre-settlement offer, not the statutory fines. FBI warning of doom gives a 6 digit fine + possible jail time.
  • Free online network too costly. Implement charge to offset cost.

    Thanks ever so much, FTC, for keeping me safe!

  • Actually, no child was hurt at all by Sony. At all. Quit casually throwing out the word "hurt" when you simply mean that children were exposed to things you think were "offensive" or "bad".

  • If I am reading this correctly, if someone makes a social networking site that asks for certain information, then that in itself could be illegal if someone under 13 registers on the site? That's absurd.

    It would make sense to me that Sony would be liable if they distributed that information, or sold it off, or something like that. But the article makes no mention of that. It simply says that the mere action of collecting information someone voluntarily gives to them is illegal.

    So if I put a form on a web

    • You have it pretty much right, which is why a lot of stock forum software asks you if you're younger than 13, why Myspace saya you must be 13 in their TOS etc.

    • There are guidelines for compliance, of course. You just have to ask if the user is 13 or over before collecting personally identifiable information directly from the user. It is weird, because you need to trust children to be truthful, but it makes compliance easy. But realistically, I think parents can tell their children "clicking the box when it is not true is bad, and it is for your own protection" is reasonable. It is a weak law with a narrow purpose.
  • by Anonymous Coward

    Sony's annual revenue exceed $5B/year, so a $1M penalty is 0.02%. That would be like fining the average American middle-class family $10. It's basically a parking ticket. Wow what a deterrent! With penalties like that you know they'll never do anything like that again!

    • Your area must have really cheap parking tickets. In San Francisco that is the 6 hour parking rate... which makes it much more like a cost of doing business.
  • Who came up with that figure, Dr. Evil?

The Macintosh is Xerox technology at its best.