FTC orders Microsoft to pay $20M for collecting children's personal information

June 6 (UPI) -- Microsoft will pay $20 million to settle a charge that it collected personal information from children without their parent's permission, the Federal Trade Commission said.

The FTC on Monday said Microsoft violated the Children's Online Privacy Protection Act by allowing children to sign up for its Xbox gaming system without parental consent and retaining their information.

As part of the proposed order filed by the Department of Justice, Microsoft is ordered to take several steps to improve privacy protections for child users of its Xbox system.

For example, the order extends COPPA protections to third-party gaming publishers with whom Microsoft shares children's data along with the avatars generated from a child's image.

"Our proposed order makes it easier for parents to protect their children's privacy on Xbox, and limits what information Microsoft can collect and retain about kids," said Samuel Levine, director of the FTC's Bureau of Consumer Protection.

"This action should also make it abundantly clear that kids' avatars, biometric data, and health information are not exempt from COPPA."

The FTC complaints charged that from 2015-2020, Microsoft retained the data collected from children for years sometimes and failed to require parent consent.

Microsoft Xbox gaming allows users to play and chat with other players through its Xbox Live service. Users must create an account to access and play games on an Xbox console or use any of the other Xbox Live features. That information includes names, email addresses and birthdates.

COPPA outlaws retaining personal information about children for longer than is reasonably necessary to fulfill the purpose for which it was collected.

The order was the latest government action against Microsoft. In April, Microsoft agreed to pay some $3.3 million in fines for violating U.S. export controls and sanction laws over selling software and providing services to blacklisted companies and individuals primarily in Russia, but also in Cuba, Iran and Syria.