Artist Arena creates fan Web sites for artists including Justin Bieber, Selena Gomez, and Rihanna. Calling itself "the expert in captivating fans," it also managed to gain the attention of the Federal Trade Commission after allegations were made that the firm illegally collected information about minors.
The company is a division of the Warner Music Group after being purchased by the corporation in 2010.
In a complaint filed in a New York district court on Tuesday, the FTC accused Artist Arena of failing to obtain parental consent before collecting the names and e-mail addresses of children, according to Reuters.
Artist Arena maintains the Web sites RihannaNow.com, SelenaGomez.com, BieberFever.com, and DemiLovatoFanClub.net. As part of the registration process, users have to submit their date of birth, e-mail address, and name. The FTC claimed that as the site knew the children's age, the company knowingly ignored regulation and did not notify their parents.
FTC spokeswoman Claudia Bourne Farrell said that the fan Web site company has agreed to settle the case for $1 million, pending approval by a judge.
"These were fan sites that knew that a very substantial percentage of users were 12 or under," said David C. Vladeck, director of the FTC's bureau of consumer protection, The New York Times reports. "There is really no excuse for violations like these."
The Federal Trade Commission is currently in the process of updating COPPA's rules to place further restrictions on data collection by Web sites targeted at young audiences. The act is controversial -- as some believe it impacts on freedom of speech -- and many Web sites refuse to accept underage users due to the additional paperwork and checks required.