On June 5, 2023, technology giant Microsoft Corporation (“Microsoft”) settled with the Federal Trade Commission (the “FTC”) for a staggering US$20 million over violations of the Children’s Online Privacy Protection Act (“COPPA”). The settlement stems from concerns regarding the company’s Xbox gaming system, which the FTC alleged collected personal information from children under the age of 13 (“Children”, and each a “Child”) without notifying their parents or obtaining their parents’ consent. In addition, the settlement requires Microsoft to take decisive actions aimed at fortifying children’s privacy on its gaming platform. The FTC’s action highlights the critical importance for game companies to prioritize COPPA compliance and safeguard the personal information of their youngest users.
This legal update discusses the FTC’s enforcement of COPPA and its implications for the video game industry. In addition, it examines how major game companies are currently complying with COPPA, exploring their approaches to certain external-facing key COPPA requirements. By looking to these enforcement actions and others’ COPPA compliance efforts, game companies can gain valuable insights into the evolving COPPA landscape and develop effective compliance endeavors.