Microsoft Pays $20 Million Fine Xbox Privacy Violations

U.S. Government Demands Microsoft To Pay $20 Million USD Fine Over Xbox Privacy Violations ftc Children's Online Privacy Protection Act (COPPA) federal trade commission xbox xs

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Microsoft has officially been fined by the Federal Trade Commission for violating privacy regulations. Specifically, the FTC has fined the tech company $20 million USD for collecting personal information from children through its Xbox console. According to the government, Microsoft failed to ask for the consent from parents and have failed to notify parents, therefore violating the Children’s Online Privacy Protection Act (COPPA).

According to FTC‘s Director of Bureau of Consumer Protection Samuel Levine said, “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. This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.” The FTC claims that Microsoft kept data from children between 2015 to 2020.

The issue stemmed from the signing up process for an Xbox Live account. Microsoft only changed its process in late 2021, so prior, signing up for an Xbox Live account would require personal data that showed that if you were 13 years old or younger, Microsoft would require more details. It was not until 2019 that the process would include a pre-checked box that indicated that the user accepted promotional material and would provide Microsoft with the data to send to advertisers. Later, Microsoft added that users under the age of 13 who created an account before May 2021 will be required to provide parental consent. In response to this Microsoft said, “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.”

This is not the first time Microsoft has had an issue with the FTC, previously their plan to acquire Activision Blizzard for $68.7 billion USD was met wit resistance as well.

Proposed order will require Microsoft to bolster protections for children; makes clear that avatars generated from kids’ image and biometric and health data are protected under the Children’s Online Privacy Protection Act (COPPA) /2
— FTC (@FTC) June 5, 2023