FTC Slaps Microsoft with $20 Million Fine Over Children Privacy Breach

Recently, the software giant Microsoft got into a legal quagmire due to which it has to pay millions of dollars. The Federal Trade Commission (FTC) fined the company for violating the Children’s Online Privacy Protection Act (COPPA). Now, Microsoft has to pay a $20 million settlement to FTC, over charges that the company violated the Children’s Online Privacy Protection Act (COPPA).  As per the details, the company kept certain personal data of children for an extended period than the prescribed time.

Microsoft to Pay $20 Million in Settlement to FTC

The FTC found that until late 2021, Microsoft was asking for personal information from users before involving parents of players under the age of 13. Furthermore, Microsoft was retaining this data for extended periods, even if the parent did not complete the account setup process, which is against COPPA regulations.

In this regard, Microsoft’s Dave McCarthy, CVP of Xbox Player Services, in a blog post said,

Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures. 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.

McCarthy further said that Microsoft didn’t remove account creation data for kid accounts because of a “technical glitch,” and that the company has since resolved the glitch and erased the data. “The data was never used, shared, or monetized,” according to McCarthy.

In addition to the charges, Microsoft has also been directed to make a number of changes as part of an agreement with the Federal Trade Commission (FTC) over violations of the Children’s Online Privacy Protection Act (COPPA). These changes include informing parents about the extra privacy protections for child accounts, obtaining parental consent for accounts created before 2021, creating systems to delete data needed for parental consent, and notifying other publishers when disclosing personal information from child users.

The settlement is the latest in a series of FTC agreements with video game companies regarding COPPA violations. In a similar case, Epic Games had to pay $520 million in the settlement, with a significant portion attributed to COPPA violations.

Also read:

Microsoft Launches Pegasus Program for Startups with up to $350,000 Reward

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