Following Federal Trade Commission (FTC) charges, Microsoft will bay $20 million to settle Children's Online Privacy Protection Act (COPPA) violations. The FTC charged Microsoft for collecting personal information from children who signed up to its Xbox gaming system without notifying their parents or obtaining their parents’ consent, and by illegally retaining children’s personal information.
As part of a proposed order filed by the Department of Justice on behalf of the FTC, Microsoft will be required to take several steps to bolster privacy protections for child users of its Xbox system. For example, the order will extend COPPA protections to third-party gaming publishers with whom Microsoft shares children’s data. In addition, the order makes clear that avatars generated from a child’s image, and biometric and health information, are covered by the COPPA Rule when collected with other personal data. The order must be approved by a federal court before it can go into effect.