Sony BMG Music Entertainment has agreed to pay $1 million to settle charges by the Federal Trade Commission that it improperly collected and disclosed personal information on thousands of children under 13 without their parents' consent.
The FTC said that the civil penalty is the largest ever to be paid in a case alleging violation of the Children's Online Privacy Protection Act. A representative for Sony Music did not immediately return a voicemail seeking comment.
"Sites with social networking features, like any websites, need to get parental consent before collecting kids' personal information," said FTC Chairman William E. Kovacic in a statement.
The FTC said Sony Music, which operates more 1,000 music sites for its music artists and labels, "knowingly collected personal information from at least 30,000 underage children without first obtaining their parents' consent" on 196 of its sites.
The FTC order requires Sony Music to delete all personal information collected and maintained in violation of the rule. For the next five years, Sony also must provide links to FTC consumer education materials on those websites that fall under the Children's Online Privacy act - including those that target or collect personal information on children.
The FTC's complaint was filed in federal court in New York. The settlement was submitted for the court's consideration at the same time.
Sony BMG is now Sony Music Entertainment Inc., after Japanese electronics giant Sony bought out its partner Bertelsmann AG for $900 million in a deal that closed October 1.
US-listed shares of parent company Sony Corp. rose 49 cents, or 2.4 per cent, to $21.34 in afternoon trading.