Microsoft Faces $20 Million Fine from US Authorities for Violating Child Data Privacy

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In a recent development, tech giant Microsoft has agreed to pay a hefty fine of $20 million following allegations that it unlawfully collected personal information from minors without their parents' consent. The settlement, announced on Monday, comes as a result of charges brought forth by the Federal Trade Commission (FTC) against the company.

According to the FTC, Microsoft was found to have gathered personal data from children under the age of 13 who signed up for its popular Xbox gaming system between 2015 and 2020, all without obtaining proper parental permission. The collected information was then retained by the company, raising concerns about violations of the Children's Online Privacy Protection Act (COPPA).

To create an account on the Xbox platform, users were required to provide details such as their first and last names, email address, and date of birth. However, Microsoft failed to implement adequate safeguards to ensure parental consent for the collection and retention of this data.

"The proposed order we have put forth aims to enhance privacy protections for children using Xbox and limits the extent to which Microsoft can collect and retain their information," explained Samuel Levine, the head of the FTC's Bureau of Consumer Protection. Levine further emphasized that the enforcement action serves as a reminder that COPPA applies to various types of personal data, including avatars, biometric information, and health data relating to children.

It is worth noting that the settlement is still subject to approval by a federal court before it can be enforced. Nevertheless, the FTC has outlined specific measures that Microsoft will be required to undertake to strengthen privacy safeguards for young users of its Xbox system.

Under COPPA regulations, online platforms and websites catering to children under the age of 13 are obliged to notify parents regarding the collection of personal information and obtain verifiable parental consent prior to utilizing or storing any such data. Microsoft's failure to comply with these provisions led to the imposition of the substantial fine.

In response to the allegations and impending settlement, a Microsoft spokesperson assured that the company is fully committed to adhering to the FTC's order. The tech giant has expressed its intention to develop a new process for identity verification and age validation, with the aim of delivering age-appropriate experiences for young users on the Xbox platform.

The case against Microsoft serves as a stark reminder to tech companies about the importance of prioritizing privacy protection, particularly when it comes to vulnerable groups such as children. With regulators taking a stricter stance on data privacy violations, it is expected that companies will face increasing scrutiny and potential penalties for non-compliance in the future.

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