Microsoft agrees to pay $20mn over illegal storing of Xbox account data of kids

After it was discovered that Microsoft was improperly collecting and keeping the data of children who registered to use its Xbox video game platform, the company opted to pay $20 million to achieve a settlement. On Monday, the Federal Trade Commission and the tech company struck a deal in which it was requested that underage gamers’ privacy be strengthened. But before it can take effect, a federal court must approve the settlement. The federal authorities discovered that Microsoft had illegally retained the data for longer periods of time than necessary for accounts created before 2021, as well as that it had collected the data without alerting parents or getting their consent.

The Children’s Online Privacy Protection Act was broken by these actions, according to the FTC. The law requires that all kid-targeted internet services and websites acquire parental permission and notify the parent when personal information about their child is being gathered. Microsoft kept account setup data from 2015 to 2020, sometimes for years even when a parent didn’t finish the procedure, according to a statement from the FTC.

Microsoft is now trying to enhance its age verification processes and make sure that parents are involved in the establishment of kid accounts

Dave McCarthy, corporate vice president for Xbox at Microsoft, detailed further measures the company is now taking to enhance its age verification processes and make sure that parents are involved in the establishment of kid accounts for the service in a blog post.

“Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures,” Microsoft’s Dave McCarthy, CVP of Xbox Player Services, wrote in an Xbox blog post. “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.”

It added that the majority of these focus on initiatives to enhance age verification technologies and to inform kids and parents about privacy concerns. The response comes in response to the federal agency’s warning to Amazon last week, which claimed that its Echo devices were gathering customers’ personal information without their knowledge. After the FTC discovered that Amazon had kept sensitive data, including child voice recordings, for years, it agreed to pay $25 million. Ring, an Amazon doorbell camera product, also agreed to pay $5.8 million after giving staff members unrestricted access to consumer information.

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