Sony Hit With $1M Penalty For COPPA Violations

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."

Comments

And...

[RulerOf]

Do the violated children get the money?

Re:And...

[Krneki]

No, but they can get some candy.

Come, I have some of them in my van.

Re:And...

[irtza]

Come, I have some of them in my van.

The children or the candy?

Re:And...

[CarpetShark]

I believe he meant that his van is full of all sorts of violations.

Re:And...

[Timothy Brownawell]

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)?

Re:And...

[Anonymous Coward]

First one, then the other.

Re:And...

[jlarocco]

No, it means the government now has another million dollars with which to look for and prosecute COPPA violations.

Re:And...

[zigziggityzoo]

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:And...

[Anonymous Coward]

yes.

Re:And...

[thtrgremlin]

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.

Re:And...

[Anonymous Coward]

I thought the COPPA was struck down as unconstitutional or something years ago?

Re:And...

[Deathnutz]

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 is just another group in the way of progress and stealing from people because the law is only ever on their side. geh.....

Re:And...

[Haeleth]

That was COPA, which tried to prevent children from accessing porn. This is about COPPA, which is the completely pointless act that makes it a requirement for children under 13 to lie about their age regularly.

Do they actually cut a cheque?

[syousef]

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.

Re:Do they actually cut a cheque?

[Anonymous Coward]

or alternately perhaps the execs can make do with 16 hookers at the corporate retreat instead of 20 this year

Where does one find $250,000 hookers? Does that price include the blow?

Re:Do they actually cut a cheque?

[Andr T.]

His sentence could return false. Anyway, the sintax is pretty dizzy. He could use defines or something.

Re:Do they actually cut a cheque?

[Andr T.]

Man, I need a job like this. I mean, well, being an executive. My job sucks. In a bad way.

Re:Do they actually cut a cheque?

[hachi-control]

The issue is that your job doesn't suck.

Re:Do they actually cut a cheque?

[theaveng]

>>>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.

Re:Do they actually cut a cheque?

[Missing_dc]

My job sucks. In a bad way.

Call it a hunch, but despite the apparent $250,000 salary for services at that retreat, the hooker's job sucks too.

Re:Do they actually cut a cheque?

[Anonymous Coward]

Yeah, same here, my job is so incredibly brilliant.

I almost want to give roses to my boss, because he is such a fat hunk of muscle.

Re:Do they actually cut a cheque?

[Anonymous Coward]

Well, it better. Or she is going to get a low customer satisfaction rating.

Re:Do they actually cut a cheque?

[richlv]

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

Re:Do they actually cut a cheque?

[theaveng]

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.

Re:Do they actually cut a cheque?

[mcgrew]

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 they think it's worth the risk?

Re:Do they actually cut a cheque?

[richlv]

oh. that's actually even better, thanks for the detail :)

Re:Do they actually cut a cheque?

[DrLang21]

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 should also put the computer in their living room to limit their children from accessing material that they don't want them to access.

Re:Do they actually cut a cheque?

[mcgrew]

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.

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.

Re:Do they actually cut a cheque?

[Anonymous Coward]

His sentence could return false. Anyway, the sintax is pretty dizzy.

Does this "sin tax" refer to Sony's penalty for their wrongdoings?

Re:Do they actually cut a cheque?

[Anonymous Coward]

I bought a Sony LCD TV. I didn't give a damn that they had rootkits on their CD's, didn't affect me one bit. All I know is their Bravia Z Series LCD TV's are one fine line of TV's, and I'm proud to own one.

Re:Do they actually cut a cheque?

[Anonymous Coward]

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 they think it's worth the risk?

Perhaps because like any large conglomerate, all of these little divisions in a company can have very little to do with each other? Seriously, I don't boycott Warner Bros movies when my Time Warner Cable internet connection goes down right before an important teleconference, and I don't boycott Sony LCD TVs because of Sony/BMG.

Re:Do they actually cut a cheque?

[mcgrew]

The various divisions answer to the CEO and board. Dishonesty, corruption, and incompetence start at the top, just as honesty, ethics, and competence do. Crooks hire crooks, evil hires evil.

Your Time-Warner connection doesn't go down because they're evil, things break and shit happens. There is no analog between your ISP losing a router and a company intentionally installing illegal, malicious software on your PC.

Rootkits don't get installed on music CDs by accident. If they'll sabotage your PC with a music CD I don't see how you can trus them with anything. I expect every new Sony gizmo that connects to the internet to be rooted, keylogged, and trojaned. I don't see how anybody could expect otherwise.

Maybe a light at the end of the tunnel

[Andr T.]

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.

"over 30,000 underage children"

[Ztream]

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

Re:"over 30,000 underage children"

[YrWrstNtmr]

There are non-underage children?

Yes. COPPA only applies to those under 13.

Re:"over 30,000 underage children"

[Manuel M]

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:"over 30,000 underage children"

[dcsmith]

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.

Re:"over 30,000 underage children"

[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 "children". What are people being taught these days that such obvious and literal definitions are being questioned?

Re:"over 30,000 underage children"

[Anonymous Coward]

Someone 13 and over isn't a child, they're a teenager.

Re:"over 30,000 underage children"

[thtrgremlin]

Since most people are pretty stupid, and 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.

Re:"over 30,000 underage children"

[thtrgremlin]

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.

Re:"over 30,000 underage children"

[thtrgremlin]

I think the correct term in this case is minor. Teenager, though specific, does not have a legal definition like child (it is more slang). As long as we are being pacific.

Re:"over 30,000 underage children"

[dcsmith]

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.

COPPA? Which statute is that?

[gavron]

...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 http://www.raphkoster.com/2008/07/23/child-online-protection-act-overturned/

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.

Relevent part of the article...

[Darundal]

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.

Re:COPPA!

[TaoPhoenix]

Her name was Lolita
she was a showgirl
with yellow feathers in her hair
and a dress cut down to there.

At the COPPA ... COPPA cabana
The rights of kids online should matter.
at the COPPA-COPPA cabana
music and passion were always the fashion
at the COPPA
says she's not allowed...

Re:COPPA? Which statute is that?

[YrWrstNtmr]

...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.

Apparently, it is this one.
Children's Online Privacy Protection Act of 1998

Re:COPPA!

[Andr T.]

There's also Koopa Troopa.

piracy rights

[Anonymous Coward]

Did anyone else read it as: violated the piracy rights of over 30,000 underage children

Re:piracy rights

[iammani]

I did. Looks like our brain thinks Sony and Piracy are very related words. And when we hear/read Sony, we expect some mention of Piracy.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Thanks!

[gavron]

Looks like http://www.washingtonpost.com/ac2/wp-dyn/A39748-2002May31?language=printer describes it as:

COPPA: The Children's Online Privacy Protection Act

This law is not the same COPPA that outlaws digitally morphed images designed to look like children having sex. Rather, it is a much less controversial bill that has to do with protecting children's privacy from online marketers. The law has not been challenged. Highlights: Penalties are imposed for collecting personal data on children under 13 years old without receiving written parental consent.

Interesting.

E

IMHO laws need to be changed

[theaveng]

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:IMHO laws need to be changed

[slimjim8094]

COPPA applies to under-13 only.

See YrWrstNtmr's post.

Re:IMHO laws need to be changed

[Cowmonaut]

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.

Re:IMHO laws need to be changed

[thtrgremlin]

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.

Privacy really that worthless?

[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.

Re:Privacy really that worthless?

[ShadoxPrime]

Bulk discount. You know how it is.

Old lessons

[Drakkenmensch]

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

[zotz]

Gee.

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,

drew

Re:Do the maths

[Opportunist]

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?

Profit trumps lives

[Anonymous Coward]

Songs: $750 fine for violating "rights" of.

Children: $33 fine for violating rights of.

I don't have the words...

Re:Profit trumps lives

[thtrgremlin]

I thought $750 was some of the pre settlement offers, not the statutory fines.

Songs: $200,000 fine for violating "rights" of.

Children: $33 fine for violating rights of.

Holy S**T, WhAt ThE F**k!?!

There, I fixed it for ya.

COPPA? Seriously?

[Anonymous Coward]

Huh, go figure. On the one hand I hear from people how COPPA is a bad law, and now I'm hearing that the punishment for violating it was not enough. Won't somebody think of the children?

*smirk*

Why did they do this?

[isd.bz]

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?

Re:Why did they do this?

[thtrgremlin]

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).

Privacy vs Copyright

[A Guy From Ottawa]

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.

Re:Privacy vs Copyright

[Anonymous Coward]

Nope. I guess the "children" just need better lawyers. :) You know the better lawyers always win out over logic and circumstance...

~Anonymous Coward

Re:Privacy vs Copyright

[thtrgremlin]

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.

Re:COPPA? Which statute is that?

[glwtta]

Hmm, that is confusing... They should rename one of them to make it more specific:

Child Online Protection Act, for Filtering and Elimination of Electronic Lewdness

Lesson Learned

[Symbolis]

Free online network too costly. Implement charge to offset cost.

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

No child hurt.

[MindlessAutomata]

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".

Re:No child hurt.

[thtrgremlin]

Violating peoples privacy rights doesn't hurt anyone, and it protects us from terrorism!

I'm confused on what they did

[MobyDisk]

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 site that says "Enter your name, dob, and address below and you get a cookie" then I've done something illegal if someone under 13 fills that form out? Even if I send them the cookie and throw out the information immediately?

Maybe I need to read COPPA because this makes no sense.

Re:I'm confused on what they did

[Repossessed]

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.

Re:I'm confused on what they did

[thtrgremlin]

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.

I thought COPPA was struck down?

[Anonymous Coward]

Wasn't COPPA struck down / erased / ruled unconsitutional or something like that, last year????

Re:I thought COPPA was struck down?

[thtrgremlin]

Look it up and let us know. Sounds interesting, but considering the article, might be confusing it with something else.

$1M is 0.02% of Sony yearly revenue, $33/child

[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!

Re:$1M is 0.02% of Sony yearly revenue, $33/child

[thtrgremlin]

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.

Re:COPPA? Seriously?

[thtrgremlin]

It is a bad law because it requires the internet to operate in a way that it does not. Compliance as it has actually been defined, best to my knowledge, is that you have to ask the user if they are under 13, and if so, either not collect any personal information, or get written consent from the parent. Most sites I have seen just don't let you fill out the personal parts that are typically optional. It is one of those "how much do I have to do to say I tried?" things. Laws generally ( no matter how many times we seem to get it wrong) need to be in easy to understand language for compliance. That is not the case here, and this a bad law, in addition to not really having a set purpose that it defines and meets. This law just doesn't do what it was supposed to do, because it is pretty easy to sneak out of. How Sony over looked the 'loopholes' is mind boggling and they should be be punished for such lame violations.

One Million Dollars!!!!!!!

[gacl]

Who came up with that figure, Dr. Evil?