Microsoft to pay US$20m in FTC settlement over child data collection

FILE - A man walks past a Microsoft sign set up for the Microsoft BUILD conference, April 28, 2015, at Moscone Center in San Francisco. Microsoft will pay a fine of $20 million to settle Federal Trade Commission charges that it illegally collected and retained the data of children who signed up to use its Xbox video game console. (AP Photo/Jeff Chiu, File)

Microsoft has agreed to pay US$20 million in order to settle charges brought by the US Federal Trade Commission (FTC) over allegations that the tech giant illegally collected personal data from children without obtaining parental consent. The FTC accused Microsoft of violating the US Children’s Online Privacy Protection Act (COPPA) by gathering personal information from young users of its Xbox gaming system without informing their parents or obtaining their consent, as well as retaining the collected data.

As part of the settlement, Microsoft is required to enhance privacy protections for child users of its Xbox system, including extending COPPA protections to third-party gaming publishers with whom Microsoft shares children’s data. A spokesperson for Microsoft stated that the company is committed to complying with the order and will update the account creation process, as well as resolve a data retention glitch found in its system.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said, “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.” He added, “This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.”

COPPA mandates that online services and websites targeting children under 13 must notify parents about the personal information they collect and obtain verifiable parental consent before collecting and using any personal information of the children. The FTC’s complaint alleged that from 2015 to 2020, Microsoft retained the data it collected from children during the account creation process, even when a parent failed to complete the process, reports Channel News Asia.

Recently, Apple revealed its first mixed reality headset, known as the Vision Pro. This headset is priced at US$3,499 and will be available in the United States in early 2024.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.