Microsoft’s Shocking $20 Million Fine for Mishandling Kids’ Xbox Data Exposed!

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Microsoft to Pay $20 Million Settlement Over Alleged Violations of COPPA

Microsoft has reached a settlement with the Federal Trade Commission (FTC) over charges of violating the Children’s Online Privacy Protection Act (COPPA). As part of the settlement, the company will pay $20 million and make certain changes, including notifying parents about additional privacy protections for child accounts, requiring parental consent for accounts made before 2021, creating systems to delete data necessary for parental consent, and notifying publishers when personal information from a child is disclosed.

FTC’s Allegations and Microsoft’s Response

The FTC alleges that Microsoft retained personal data of children for much longer than it should have, even if the parent did not complete the signup process, which is prohibited under COPPA. Microsoft has admitted to not deleting account creation data for child accounts due to a “technical glitch,” but the company has since fixed the issue and deleted the data. According to Microsoft’s CVP of Xbox Player Services, Dave McCarthy, “the data was never used, shared, or monetized.

Microsoft and COPPA Violations

This is not the first time a video game company has settled with the FTC over alleged violations of COPPA. In December 2022, Epic Games reached a $520 million settlement ($275 million of which was related to COPPA violations), and earlier that month, Epic introduced for-kids accounts for Fortnite, Rocket League, and Fall Guys.

FAQs

What is COPPA?

The Children’s Online Privacy Protection Act (COPPA) is a U.S. federal law that requires website operators to obtain parental consent before collecting personal information from children under the age of 13.

Why did Microsoft violate COPPA?

The FTC alleged that Microsoft retained personal data of children for much longer than it should have, even if the parent did not complete the signup process, which is prohibited under COPPA. Microsoft admitted to not deleting account creation data for child accounts due to a “technical glitch,” but the company has since fixed the issue and deleted the data.

What changes will Microsoft make as part of the settlement?

Microsoft will notify parents about additional privacy protections for child accounts, require parental consent for accounts made before 2021, create systems to delete data necessary for parental consent, and notify publishers when personal information from a child is disclosed.

Has this happened with other video game companies?

Yes, Epic Games reached a $520 million settlement ($275 million of which was related to COPPA violations) in December 2022, and earlier that month, Epic introduced for-kids accounts for Fortnite, Rocket League, and Fall Guys.

Conclusion

Microsoft’s violation of COPPA is a serious issue, and the $20 million settlement highlights the importance of protecting children’s privacy online. Microsoft has committed to making necessary changes to ensure the safety of its community. It is important for other companies to learn from this settlement and take necessary measures to comply with COPPA regulations.

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