Microsoft has agreed to pay $20 million in fines for illegally collecting personal information from children on Xbox consoles without their parent's consent.
In a statement from the US's Federal Trade Commission yesterday on June 5, the government agency announced it had charged Microsoft with $20 million in fines. This is because the Xbox sign-up process apparently violates the Children’s Online Privacy Protection Act.
The sign-up process for Xbox consoles violates the act because it collects the personal information of children without their parent's knowledge or consent. As such, Microsoft will pay $20 million in fines, which the corporation has agreed to pay in full.
The FTC is also requiring Microsoft to basically overhaul its sign-up process in this regard to better protect children. It wants Microsoft to explicitly state to users that any Xbox avatars generated from children's images will collect their biometric and health data.
Microsoft, for its part in the matter, has attributed the entire thing to a "technical glitch," but still agreed to pay the fee. "During the investigation, we identified a technical glitch where our systems did not delete account creation data for child accounts where the account creation process was started but not completed," Xbox corporate vice president of player services Dave McCarthy stated.
"This was inconsistent with our policy to save that information for only 14 days to make it easier for gamers to pick up where they left off to complete the process," McCarthy continued. "Our engineering team took immediate action: we fixed the glitch, deleted the data, and implemented practices to prevent the error from recurring. The data was never used, shared, or monetised."
Microsoft is due for another date with the FTC a little later this year, when the latter rules on Microsoft's proposed deal to purchase Activision Blizzard. The FTC will commence their final hearings on the purchase in August, but the deal now faces an uphill battle, considering the UK government has already ruled against the acquisition in its provisional findings, which Microsoft and Activision Blizzard will appeal.
Check out our Xbox Games Showcase 2023 guide for a look at when and where you can catch Xbox's latest presentation later this week.