U.S. tech giant Microsoft agreed to pay a $20 million penalty to settle allegations it collected personal information from children without their parents’ consent.

The U.S. Federal Trade Commission (FTC) alleged that Microsoft collected personal information from children who signed up for its Xbox gaming system without notifying their parents or obtaining their consent.

It said Microsoft illegally retained the children’s personal information.

The FTC said Microsoft’s actions violated the Children’s Online Privacy Protection Act (COPPA).

As well as the fine, Microsoft will be required to bolster privacy protections for younger users of its Xbox system.

The FTC said it would also extend COPPA protections to third-party gaming publishers with whom Microsoft shares children’s data.

“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,” stated Samuel Levine, FTC’s Bureau of Consumer Protection director.

Mr Levine added, “This action should also make it abundantly clear that kids’ avatars, biometric data, and health information are not exempt from COPPA.” 

A federal court must approve the order before it can go into effect.

(dpa/NAN)