Microsoft to Pay $20 Million Settlement Over Xbox Live Privacy Violations

Microsoft has agreed to pay a $20 million settlement to resolve allegations made by the US government regarding Xbox Live privacy violations.

The Federal Trade Commission (FTC) accused Microsoft of illegally collecting personal information from children. Under the age of 13 without providing sufficient disclosure to parents.

According to the FTC, Microsoft failed to inform parents about the extensive range of information it gathered from children using Xbox Live.

The lawsuit revealed that the collected data included images, video and audio recordings, real names, and activity logs of children on the platform.

Microsoft also accused of retaining personal information of individuals. Including children, who initiated the account creation process but did not complete it for years.

Microsoft Settles Allegations of Children’s Xbox Live Privacy Violations

The FTC claimed that Microsoft violated the Children’s Online Privacy Protection Act (COPPA) by not adequately disclosing to parents the information being collected from their children and how it was being used.

While Xbox Live’s default settings limited interactions with other users. The FTC alleged that certain default settings allowed children to access third-party games and apps with minimal restrictions.

As part of the settlement, Microsoft committed to several measures beyond the financial penalty. It agreed to delete any personal information collected from children if they did not complete the account registration process.

Microsoft also pledged to notify third-party game publishers. When a user may be a child, thereby prompting compliance with COPPA guidelines for handling user information.

The settlement with the FTC comes as the agency continues to challenge Microsoft’s proposed $69 billion acquisition of video game giant Activision-Blizzard.

Concerns have been raised by US and UK officials regarding potential anti-competitive control. And the withholding of titles from rival platforms.

Microsoft has made licensing deals with other companies to address these concerns and ensure continued access to Activision games for customers.

While the European Union approved the deal, litigation involving US and UK regulators to block the acquisition is ongoing.