The company that makes official fan websites for tween favourites such as Justin Bieber, Selena Gomez and Rihanna has agreed to pay US$1 million to settle charges that it illegally collected data about more than 100,000 children.
The Federal Trade Commission (FTC), in a complaint filed in a New York district court on Tuesday, had accused Artist Arena of failing to get parental consent before collecting data such as the names and email addresses of children.
FTC spokeswoman Claudia Bourne Farrell said the company agreed to settle for US$1 million (NZ$1,217,653). The settlement must be approved by a judge, she added.
The company maintained the websites RihannaNow.com, DemiLovatoFanClub.net, BieberFever.com and SelenaGomez.com, and improperly collected data from an estimated 101,000 children aged 12 and under, according to the FTC complaint.
Under the Children's Online Privacy Protection Act, websites are required to give special treatment to children aged 12 or younger. Sites must get parental permission before collecting information about the children.
The FTC is in the process of updating the rules to further restrict companies and Web sites that target youths or are geared to young audiences.
Artist Arena did not return emails requesting comment.
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