This story is getting a lot of attention primarily because it focuses on one of the more popular tween idols of the moment. However, it doesn't have to be. This is really about the businesses behind the scenes who make obscene profits from associations with the managers of these stars.
If it is a free site, simply don't let your kid join. Their information--and yours--is going to be auctioned off to whoever pays for it and, brother, they are paying a premium for that demographic.