(Recasts first paragraph and adds comments from Sony executive
on expected settlement of case; adds background on Sony
purchase of full Sony BMG joint venture)
By Martha Graybow
NEW YORK Dec 10 Sony BMG, which is changing
its name to Sony Music Entertainment, was sued on Wednesday by
the U.S. government, which accused the music company of
violating federal rules aimed at protecting the online privacy
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
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.
The lawsuit said Sony Music's notice of its information
practices on its website did not clearly or accurately disclose
how it collected and used the information.
Sony Corp (6758.T)(SNE.N), the Japanese consumer
electronics company, agreed in August to buy full ownership of
the Sony BMG music group, saying it would purchase Bertelsmann
AG's (BTGGg.F) 50 percent stake in their joint venture for
around $900 million.
The new music company, the second biggest after Vivendi SA
(VIV.PA) unit Universal, is being renamed Sony Music
Entertainment and is a wholly owned unit of Sony Corp of
America, Sony has said.
(Reporting by Martha Graybow; editing by Jeffrey Benkoe)