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Microsoft To Pay US$20 Million Settlement Over Collection of Children's Personal Information

Updated: Jan 4

[Edited] In a settlement with the US Federal Trade Commission (FTC), Microsoft has agreed to pay $20 million after being charged with illegally collecting personal information from children without parental consent.

Credit: REUTERS/Gonzalo Fuentes

The charges were in violation of the Children's Online Privacy Protection Act (COPPA). The FTC stated that Microsoft collected personal information from children who signed up for its Xbox gaming system without notifying their parents or obtaining their consent, and also retained children's personal information.

As part of the settlement, Microsoft will be required to take steps to enhance privacy protections for child users of its Xbox system. The company will extend COPPA protections to third-party gaming publishers with whom it shares children's data. A spokesperson for Microsoft expressed the company's commitment to complying with the order and mentioned that the account creation process will be updated, and a data retention glitch in the system will be resolved.

Samuel Levine, director of the FTC's Bureau of Consumer Protection, highlighted the significance of the proposed order in safeguarding children's privacy on Xbox. He stated, "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." Levine also emphasized that children's avatars, biometric data, and health information are not exempt from COPPA.

Under COPPA, online services and websites directed towards children under 13 are required to inform parents about the personal information they collect and obtain verifiable parental consent before collecting and using any personal information of the children. The complaint against Microsoft revealed that from 2015 to 2020, the company retained data collected from children during the account creation process, even when parents failed to complete the process.

This settlement serves as a reminder to tech companies about the importance of complying with privacy regulations, especially when it comes to protecting the personal information of children. Microsoft's agreement to pay $20 million demonstrates the seriousness of the charges and the company's commitment to rectifying the situation.


- Microsoft has agreed to pay $20 million to settle charges brought by the FTC for violating children's privacy.

- The charges were related to the illegal collection of personal information from children without parental consent.

- Microsoft will improve privacy protections for child users of its Xbox system and extend COPPA protections to third-party gaming publishers.

Source: Reuters

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