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It comes as no surprise that over the past few years, Microsoft has been under a slew of controversies regarding its data privacy practices. Now, in a recent development, Microsoft is facing a $20 million settlement with the Federal Trade Commission (FTC) following allegations of violating the Children’s Online Privacy Protection Act (COPPA).
According to the settlement, until 2021, Microsoft required users to create an account and provide personal details, such as their full name, email address, and place of birth, in order to fully utilize online services like Xbox Live. However, an investigation by the FTC revealed that Microsoft combined a user’s gamertag, including accounts owned by underage users, with a unique persistent identifier and shared this information with third-party developers. Therefore, breaching COPPA, which mandates obtaining parental consent for users under the age of 13 before utilizing their data.
Microsoft’s response and changes
In response to these allegations, Dave McCarthy, the CVP of Xbox Player Services, explained that the company’s failure to delete account creation data for child accounts was due to a technical glitch. Additionally, he also assured users that the company has now resolved the glitch and they handle the data in compliance with COPPA.
“Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures. We believe that we can and should do more, and we’ll remain steadfast in our commitment to safety, privacy, and security for our community,” said McCarthy.
Apart from the $20 million settlement, the DOJ, on behalf of the FTC, has asked Microsoft to implement several changes, including informing parents about the additional privacy protections associated with separate child accounts, obtaining parental consent for child accounts created before 2021, establishing systems to delete data required for parental consent for kids’ accounts, and notifying other publishers when Microsoft discloses personal information from children. However, it is important to note that the proposed order is still awaiting approval by a federal court before enforcement.
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