FTC to Sony: Hey, Record Label, Leave Those Kids Alone

Sony’s (SNE) music label will pay a $1 million fine as part of a settlement with the U.S. government in an online privacy case. The official release explaining the deal should be out Thursday, but here’s Reuters’s explanation:

The music company improperly accepted registrations on its music websites from users who were under 13, without obtaining consent from their parents, according to the lawsuit filed in U.S. District Court in Manhattan.

The civil suit, which seeks unspecified monetary penalties, said Sony Music was in violation of the Children’s Online Privacy Protection Rule, which is enforced by the Federal Trade Commission. The case was brought by the U.S. Attorney’s Office in Manhattan.

A Sony BMG executive told Reuters that the litigation is in the process of being resolved, with the company agreeing to pay a fine of $1 million, to put in place a screening process that complies with the FTC rules and hire a Web compliance officer to monitor the issue.

The executive declined to be identified, saying the news of the settlement was to be officially announced by the government as early as Thursday.”

Before the blogosphere makes the synaptic leap between Sony + music + online + lawsuit and yells “ROOTKIT!,” some context: Sony isn’t the only record label to run afoul of COPPA, the 1998 law that is supposed to protect the privacy and safety of children–Universal Music Group paid a $400,000 fine in a similar case in 2004. Nor is it the only big company, period: Other culprits include Hershey’s and Mrs. Fields.

I’m not quite sure how they ran afoul, mind you–from what I can tell, COPPA pretty much requires sites that may collect personal information from kids to stick a link to a privacy policy somewhere on the page. Can someone please explain how a company could screw that up–or how such a link actually helps protect kids?