Microsoft will pay US$20 million to US federal regulators after it was discovered to have illegally collected data on children who had created Xbox accounts.
The Federal Trade Commission (FTC) claims that Microsoft broke the law by failing to inform parents in a timely manner of the full scope of data it collected from children under the age of 13.
Shortly after the FTC's notice was issued, Microsoft responded by saying that a technical failure caused the illegal collection and retention of children's personal information and that it had successfully fixed the failure, deleted the relevant data, and promised that the children's data had never been used or shared illegally.
Microsoft's Xbox vice president Dave McCarthy described further measures that the company is taking in a blog post to improve its age verification processes and ensure that parents are involved in creating child accounts for the service.
Microsoft is the second Internet company to be fined by the FTC for violating the Children's Online Privacy Protection Act (COPPA) last half month. In late May, Amazon reached a settlement agreement with the FTC over privacy violations involving its voice assistant unit Alexa and its smart home company Ring, agreeing to pay more than US$30 million in fines.
Also in violation of COPPA, Epic Games, the developer of the game "Fortnite," has recorded the largest fine ever imposed by the FTC under the privacy law in late 2022 - for illegally collecting personal information from children and inducing users to make additional purchases.
Epic Games agreed to settle the FTC's charges against it by paying US$520 million, including US$275 million in fines and US$245 million in consumer refunds for COPPA violations.
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