Late last week the FTC revealed that it had reached a $1 million settlement with Xanga.com, a social networking and blog Web site. The fine comes as a result of Xanga’s violation of the 1998 Children’s Online Privacy Protection Act (COPPA), which requires commercial Web sites, including social networks, to give parental notification and get parental consent in order to collect personal information from children younger than 13 years-old.
In the complaint it filed, the FTC indicated that Xanga had created 1.7 million accounts for users registering with ages under 13 since 2001.
“For each of these accounts, the defendants collected, used, and disclosed personal information from children under age 13,” said the complaint. “After collecting dates of birth from children indicating that they are under 13, the defendants marketed, and in at least two instances sold, targeted banner ad space on Xanga.com to advertisers based on the personal information, including age, location, and sex, provided by such children.”
What probably amplified the issue was the fact that the FTC said that two of Xanga’s founders, Marc Ginsburg and John Hiller, had “actual knowledge” of their violation.
The FTC also indicated that Xanga’s policies concerning children were not clear enough on the site and that parents were not given a way to view and monitor their children’s personal information.
According to Hiller, what made the situation more difficult to amend was the fact that “Pet bloggers registered with their pet’s birthday, engaged bloggers registered with their wedding date, and religious bloggers registered with their born-again date,” he said.
The $1 million fine was the largest figure imposed on a company for a violation of COPPA. It was more than twice the previous record of $400,000 charged to UMG Recordings in 2004.
Xanga will also be enhancing its child privacy measures by adopting the best practices recommended by the Children’s Advertising Review Unit of the Better Business Bureau, hiring additional staff to delete the accounts in violation, and hiring former cybercrime prosecutor Stephen Kline as the new Chief Safety Officer.
The site has been implementing a ratings system since May, which allows users to rate their sites and individual posts similar to the way movies are rated.
Sources:
http://publications.mediapost.com/index.cfm?fuseaction=
Articles.showArticle&art_aid=47915
http://news.com.com/Xanga+fined+1+million+under+child-
privacy+act/2100-1030_3-6113626.html
http://www.internetnews.com/bus-news/article.php/3631131
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