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Microsoft To Pay US$20 Million Settlement Over Collection of Children's Personal Information
Updated: Jun 7
Microsoft agrees to pay US$20 million to settle FTC charges of unlawfully collecting children's data without parental consent.
Microsoft has reached a US$20 million settlement with the U.S. Federal Trade Commission (FTC) following accusations of unlawfully gathering personal information from children without their parent's consent. The FTC announced the settlement on Monday, concluding the case against the tech giant.
The charges against Microsoft stemmed from a violation of the U.S. Children's Online Privacy Protection Act (COPPA) and the company was found to have collected personal data from children who registered on its Xbox gaming system without informing or obtaining consent from their parents. Furthermore, Microsoft was also accused of retaining the children's personal information, which violated COPPA regulations, according to a statement issued by the FTC.
Under the terms of the settlement, Microsoft will be required to take concrete measures to enhance privacy protections for child users of its Xbox system. Additionally, the company must extend COPPA safeguards to third-party gaming publishers who have access to children's data shared by Microsoft, stated the FTC.
Responding to the settlement, a Microsoft spokesperson emphasised the company's commitment to complying with the FTC's order. The spokesperson confirmed that the account creation process would undergo updates while a data retention glitch discovered in the company's system would be promptly resolved.
Samuel Levine, the director of the FTC's Bureau of Consumer Protection, expressed his views on the proposed order, stating, "Our proposed order makes it easier for parents to safeguard their children's privacy on Xbox and restricts Microsoft's data collection and retention policies regarding kids. This action underscores that children's avatars, biometric data, and health information are not exempt from COPPA."
According to the complaint filed, Microsoft retained the data gathered from children during the account creation process between 2015 and 2020, even if a parent did not complete the process as required.
COPPA mandates that online services and websites targeting children under 13 must inform parents about the personal information collected and obtain verifiable parental consent before collecting and utilising any such data.
Microsoft agrees to pay $20 million to settle FTC charges of unlawfully collecting children's data without parental consent.
The charges against Microsoft stemmed from a violation of the U.S. Children's Online Privacy Protection Act (COPPA) and the company was found to have collected personal data from children who registered on its Xbox gaming system without informing or obtaining consent from their parents.
As part of the settlement, Microsoft must enhance privacy protections for child users of its Xbox system and extend COPPA safeguards to third-party gaming publishers with access to children's data shared by Microsoft.