Microsoft to Pay $20M For Illegally Stored Child Data

Facts

• Microsoft has agreed to pay the Federal Trade Commission (FTC) a $20M fine to settle charges of illegally collecting and retaining the personal data of children using its Xbox video game console.¹
• According to the FTC, Microsoft violated the Children’s Online Privacy Protection Act (COPPA) by failing to notify parents or obtain their consent about personal information the corporation gathered from kids under the age of 13.²
• In a lawsuit filed on Monday, the FTC alleged that Microsoft saved children’s profile pictures, video and audio recordings, real names, and activity logs on the platform without disclosing that the information was being used.³
• In addition, the lawsuit claims Microsoft retained the kids’ data “sometimes for years” even if the parent didn’t complete the signup process. If true, this reflects a violation of COPPA, which prohibits the retention of children’s personal information for longer than necessary.⁴
• Though it acknowledged not meeting “customer expectations,” Microsoft argued that the now deleted data may have remained on the platform due to a “technical glitch” and that “the data was never used, shared, or monetized.”⁵
• The settlement, which must be approved by a federal court before going into effect, requires Microsoft to seek consent from parents for accounts created before May 2021, and establish a system for deleting information from children it obtained without parental consent.⁶

Sources: ¹Associated Press, ²Reuters, ³CNN, ⁴Federal Trade Commission, ⁵Verge and ⁶TechCrunch.

Narratives

• Narrative A, as provided by TechHQ. Microsoft not only violated children’s privacy and parental rights, but may also have shared sensitive information with third-party app developers. This settlement comes just months after Epic Games agreed to pay $245M for violating COPPA through an unfair practice that put kids and teens in risky contact with strangers; it’s apparent the FTC will not allow video game producers to profiteer by swindling underaged players with their shady practices.
• Narrative B, as provided by The Financial Express. Although the FTC is finally getting Microsoft to comply with COPPA and take active measures to prevent future violations, it’s unfair to hold only the software majors responsible for “misleading” parents and failing to protect children’s privacy. Video game consoles like Xbox are a luxury, and the COPPA-protected parents who provide such toys to their offspring must also shoulder some burden for ensuring their children use them in responsible and safe ways. It is not just Microsoft responsible for ensuring the safety of minors interacting with their technology.