Sony BMG (soon to be known as Sony Music Entertainment) has been sued by U.S. authorities for allegedly violating U.S. federal regulations designed to protect the online privacy of children.

The company is accused of allowing children under the age of 13 to register at its Web sites in contravention of the U.S. Federal Trade Commission’s (FTC’s) Children’s Online Privacy Protection Rule.

A Sony insider told the Reuters news service this week that the suit is being resolved via behind-the-scenes negotiations. Apparently, the company will pay a fine of (US)$1 million, put in place a screening process to exclude underage kids from registering and hire a compliance officer to monitor the process.

The lawsuit is the least of Sony’s problems just now. Earlier this week, the company announced it will cut 8,000 full-time and 8,000 contractor positions from its worldwide workforce in the next few months. It will also close one of every ten of its 57 manufacturing plants around the globe in an attempt to save at least (US)1.1 billion this coming year to offset plummeting sales of its digital camera and flatscreen television products, among others.

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