FTC: Internet gaming co. pays $3M settlement for kids privacy breach

The operator of Internet games My Diva Dolls and Pony Stars agreed to pay $3 million to settle a complaint brought by the Federal Trade Commission for violating online privacy laws for children.

The FTC said in a release Thursday that Playdom, which operates 20 virtual world games and many others, collected personal information about 403,000 children under the age of 13 without asking for their parents’ consent.

The company gathered children’s ages and e-mail addresses during the registration process for games such as 9 Dragons. Playdom and its executive, Howard Marks, also made it possible for children to publicly post their full names, e-mail addresses, instant messenger IDs and location on personal profile pages on the games’ online community forums, the FTC said.

According to the 1998 Children’s Online Privacy Protection Act, Internet firms must first gain permission of parents of anyone under 13 for any collection or sharing of personal information.

“Let’s be clear: Whether you are a virtual world, a social network, or any other interactive site that appeals to kids, you owe it to parents and their children to provide proper notice and get proper consent,” said FTC Chairman Jon Leibowitz in a statement. “It’s the law, it’s the right thing to do, and, as today’s settlement demonstrates, violating COPPA will not come cheap.”

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Cecilia Kang is a senior technology correspondent for The Washington Post.

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