Microsoft will pay $20M to settle child privacy violations

Microsoft will pay a $20 million fine to settle charges by federal regulators that it illegally collected and kept data of children who signed up to use its Xbox video game console.

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According to a news release from the Federal Trade Commission, Microsoft violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal data from juveniles without notifying their parents or obtaining their parents’ consent.

The settlement must be approved by a federal court before it can go into effect, according to The Associated Press.

“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 in a statement. “This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.”

Microsoft, based in Redmond, Washington, required anyone using the Xbox Live service to register with a name, email address and age information, Bloomberg reported. The FTC charged that Microsoft continued to collect and retain data even when it was aware of users under the age of 13, according to the business news website.

According to the FTC complaint, Microsoft retained the data it collected from children during the account creation process from 2015 to 2020 -- even when a parent failed to complete the process.

Dave McCarthy, Microsoft’s corporate vice president for Xbox, outlined several steps the company will take in a blog post published on Monday.

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

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