The FTC has fined Microsoft $20m for violating the Children’s Online Privacy Protection Act by “collecting information” from young players.
Microsoft has agreed to pay the Federal Trade Commission $20m for collecting details from gamers under 13 years old. According to an FTC statement, Microsoft stored information from 2015 until 2020 on around 10m players who didn’t complete the account creation process.
The Children’s Online Privacy Protection Act (COPPA) requires online platforms to notify parents when personal data is gathered from gamers younger than 13.
However, Microsoft had failed to obtain “verifiable parental consent” before storing information. Therefore, it violated COPPA’s requirements and must pay a settlement.
FTC fines Microsoft for violating Children’s Privacy Act
On Twitter, the FTC revealed that it fined Microsoft $20m for its illegal data-collecting practice.
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“Our proposed order makes it easier for parents to protect their children’s privacy on Xbox and limits what information Microsoft can collect and retain about kids,” Samuel Levine – Director of the FTC’s Bureau of Consumer Protection – said. “This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.”
In addition to paying the fine, Microsoft must begin a system that deletes children’s data within two weeks if they haven’t obtained parental permission. Also, the company has to ask for parental consent for children’s accounts created before May 2021.
FTC will require Microsoft to pay $20 million over charges it illegally collected personal information from children who signed up for its Xbox gaming system without their parents’ consent: https://t.co/kgm0wFp2zG /1 #privacy
— FTC (@FTC) June 5, 2023
Dave McCarthy – corporate vice president of Xbox Player Services – responded to the settlement in a blog post. “Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures,” McCarthy remarked. “We believe that we can and should do more, and we’ll remain steadfast in our commitment to safety, privacy, and security for our community.”
This isn’t the first time that a video game company has had to pay out a massive fine for violating FTC guidelines, with Epic Games having to pay out over $500m due to violating similar laws.