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The US Federal Trade Commission (FTC) said on Monday that Microsoft would pay $20 million (approximately Rs. 163 crore) to resolve claims that the tech corporation improperly gathered personal information from youngsters without their parents' consent.
According to the FTC, the company was charged with violating the US Children's Online Privacy Protection Act (COPPA) by collecting personal information from children who signed up for its Xbox gaming system without notifying or obtaining their parents' consent, and by retaining children's personal information.
The judgement orders Microsoft to take steps to tighten privacy protections for its Xbox system's kid users. According to the FTC, it will expand COPPA safeguards to third-party game publishers with whom Microsoft exchanges children's data.
According to a Microsoft spokeswoman, the business is dedicated to complying with the ruling. The account creation procedure will be revised, and a data retention problem discovered in the company's system will be fixed, according to the representative.
"Our proposed order makes it easier for parents to protect their children's privacy on Xbox, and it limits what information Microsoft can collect and retain about kids," said Samuel Levine, head 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," Levine added.
The legislation requires online services and websites intended to children under the age of 13 to tell parents about the personal information they collect and to acquire verified parental agreement before collecting and processing the children's personal information.
According to the lawsuit, Microsoft preserved data obtained from minors during the account creation process from 2015 to 2020, even when a parent failed to finish the procedure.