Microsoft (MSFT) has been having some rough times lately.
First, the U.S. Federal Trade Commission asked a federal court in San Francisco on June 12 to temporarily block Microsoft's $68.7 billion acquisition of Activision Blizzard (ATVI).
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The FTC fears that once Activision is in the fold of Microsoft, the owner of Windows will "withhold or degrade" the games it will get its hands on by playing on price and quality. Microsoft could also harm competitors by "withholding" content from them entirely."
Paying Civil Penalties
Meanwhile, the FTC joined up with the Justice Department to announce that Microsoft had paid $20 million in civil penalties to resolve a case regarding the company's practices for collecting and retaining personal information from children who use Xbox Live service.
Launched in 2002, Xbox Live an online multiplayer gaming and digital media delivery platform and is available on the Xbox 360 gaming console, Windows PCs and Windows Phone devices.
Consumers use the service to connect online and with others through the Xbox brand of gaming consoles.
As of December, Microsoft's online gaming service had about 120 million monthly active users, up from just under 40 million at the beginning of 2016, according to Statista.
In addition to the penalty, the ruling imposes injunctive relief to settle allegations that Microsoft violated the Children’s Online Privacy Protection Act (COPPA) and the Children’s Online Privacy Protection Rule (COPPA Rule).
In a complaint filed in the U.S. District Court for the Western District of Washington, regulators charged that Microsoft knew that certain users were children but continued to collect personal information, such as telephone numbers, before notifying parents of its information collection practices and before obtaining parental consent.
Making Children Safer Online
The complaint also alleges that in certain instances when children started, but did not complete, creating Xbox Live accounts, Microsoft retained their personal information for longer than permitted by the COPPA Rule.
“This settlement requires Microsoft to clearly communicate with parents about their child’s data and sets up procedures to monitor Microsoft’s compliance with federal statutes regarding children’s online privacy. This work will make children safer online,” U.S. Attorney Nick Brown for the Western District of Washington, said in a statement.
“I commend Microsoft for quickly acknowledging it was illegally collecting and retaining personal data of children younger than 13, and for taking steps to fix the problem," Brown said.
A Microsoft spokesperson said that the company is committed to complying with the order.
"In addition to our existing multifaceted safety strategy, we also plan to develop next-generation identity and age validation - a convenient, secure, one-time process for all players that will allow us to better deliver customized, safe, age-appropriate experiences," the spokesperson said,
