Microsoft will pay $20 million to settle Federal Trade Commission charges that it violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children who signed up to its Xbox gaming system without notifying their parents or obtaining their parents’ consent, and by illegally retaining children’s personal information.
“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.”
If a federal judge approves the FTC's proposed order, Microsoft will be required to take several steps to bolster privacy protections for child users of its Xbox system. For example, the order will extend COPPA protections to third-party gaming publishers with whom Microsoft shares children’s data. In addition, the order makes clear that avatars generated from a child’s image, and biometric and health information, are covered by the COPPA Rule when collected with other personal data.
The COPPA Rule requires online services and websites directed to children under 13 to notify parents about the personal information they collect and to obtain verifiable parental consent before collecting and using any personal information collected from children.
Xbox collected kids' info, kept it
Microsoft’s Xbox gaming products allow users to play and chat with other players through its Xbox Live service. To access and play games on an Xbox console or use any of the other Xbox Live features, users must create an account, which requires users to provide personal information including their first and last name, email address and their date of birth.
Even when a user indicated that they were under 13, they were also asked, until late 2021, to provide additional personal information including a phone number and to agree to Microsoft’s service agreement and advertising policy, which until 2019 included a pre-checked box allowing Microsoft to send promotional messages and to share user data with advertisers, according to the complaint.
It wasn’t until after users provided this personal information that Microsoft required anyone who indicated they were under 13 to involve their parent. The child’s parent then had to complete the account creation process before the child could get their own account.
According to the complaint, from 2015-2020 Microsoft retained the data—sometimes for years—that it collected from children during the account creation process, even when a parent failed to complete the process. COPPA prohibits retaining personal information about children for longer than is reasonably necessary to fulfill the purpose for which it was collected.
After a child makes an account, they can create a profile that will include their “gamertag,” which is the primary identifier visible to the user and other Xbox Live users, and can also upload a picture or include an avatar, which is a figure or image that represents the user.
According to the complaint, Microsoft combined this information with a unique persistent identifier it creates for each account holder, even children, and could share this information with third-party game and app developers. Microsoft allowed—by default—all users, including children to play third-party games and apps while using Xbox Live, requiring parents to take additional steps to opt out if they don’t want their children to access them.