NEWS6 June 2023

Tech giants Microsoft and Amazon to pay out tens of millions of pounds to settle child privacy violations

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US – Microsoft is paying out $20m (£16m) to US federal regulators after it illegally collected data on children who had signed up for its Xbox gaming system.

Gaming hand console

Microsoft was charged with violating the Children’s Online Privacy Protection Act (COPPA) by collecting personal information from children who signed up for its Xbox gaming system without notifying their parents or obtaining their parent’s consent, and by illegally retaining children’s personal information.

The law requires online services and websites directed towards children to get parental consent and to tell the parent about personal data being collected about their child.

As part of the settlement with the  Federal Trade Commission (FTC), Microsoft must now introduce new safety protections for children, including maintaining a system to delete all personal data after two weeks if no parental consent is obtained.

“Regrettably, we did not meet customer expectations and are committed to complying with thorder to continue improving upon our safety measures," Microsoft’s Dave McCarthy, CVP of Xbox player services, said in an Xbox blog post.

"We believe that we can and should do more, and we'll remain steadfast in our commitment to safety, privacy, and security for our community."

Amazon, meanwhile, is paying out a total of $30.8m (£24.7m) to settle privacy cases against its voice assistant Alexa and Ring doorbell camera unit.

In the first case, Amazon will pay $25m (£20m) to settle claims that Alexa transgressed children’s privacy rights.

The FTC said the company failed to delete recordings at the request of parents and kept them longer than necessary.

The US tech giant told Alexa users that voice transcripts and location information would be deleted on request but didn’t do so, according to the FTC.

Amazon was discovered to have kept hold of sensitive data for years. 

In a separate case, Amazon’s doorbell camera unit Ring will pay out $5.8m (£4.7m) after it gave employees unrestricted access to customers’ data.

The FTS said Ring permitted "thousands of employees and contractors" to watch recordings of customers’ private spaces.

Ring, which Amazon acquired in 2018, was able to view and download customers’ sensitive video data for their own purposes, it said.

The FTC settlements mark the agency’s latest effort to rein in  big tech firms that critics say are geared towards profits at the expense of privacy.

Amazon has agreed to make some changes in its practices.

“While we disagree with the FTC’s claims regarding both Alexa and Ring, and deny violating the law, these settlements put these matters behind us,” Amazon said in a statement.