Microsoft To Pay USD 20 Million For Illegally Collecting Children’s Info

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In a $20 million settlement, Microsoft will stop illegally collecting personal information from kids who sign up to use its Xbox gaming system. The tech company gathered data without notifying parents or obtaining their permission, and it also illegally held onto the information, the Federal Trade Commission said on Monday.

The FTC alleged that Microsoft collected information from children who signed up for its Xbox gaming system between 2015 and 2020. The information included first and last names, email addresses, dates of birth, and phone numbers. When a child indicated they were under 13, Microsoft required that their parent get involved in the account creation process. Still, according to the FTC, it asked for more personal information from them, including a credit card number. It also required the child to agree to terms of service and privacy policy, including a pre-checked box allowing Microsoft to send marketing emails and share user data with third parties, even if their parent hadn’t consented to those activities.

Once an account was created, the child could create a profile including their “Gamertag” (the primary identifier visible to other Xbox Live users), a picture, and an avatar representing themselves in games. Then, according to the FTC, Microsoft combined that information with a unique persistent identifier assigned to each user, including kids. The FTC alleged that this data was then shared with Xbox Live third-party developers who made games and apps.

The agency claimed that Microsoft used the data to target ads on its Xbox platforms and the websites of those third-party developers. It also shared the information with other third-party marketers to target them with advertising for products, services, and promotions related to Xbox content.

According to the settlement, Microsoft will now take several steps to improve its age verification systems and ensure that parents are involved in creating Xbox accounts for their children. It will also extend COPPA protections to third-party video game publishers sharing data about their players with Microsoft. However, the settlement is still subject to approval by a federal court.

In a blog post, Microsoft corporate vice president for Xbox, Dave McCarthy, said the company was committed to complying with the order and that it will take steps to improve its account creation processes, address a “data retention glitch” in its system, and make it easier for parents to control their children’s information on Xbox. He added that the company will also be working with other gaming publishers to ensure they follow COPPA regulations. See who else reports this story and where they lean on the political spectrum. Then share your thoughts below.

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