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FTC Reaches $3 Million Settlement with Game Sites

PRIVACY LAW—U.S.

May 13, 2011

The operator of 20 online gaming sites has agreed to a $3 million settlement with the FTC for violating the Children's Online Privacy Protection Act (COPPA). The Playdom, Inc., settlement is the largest to date for a COPPA violation. The FTC complaint alleged that the defendants, Playdom, Inc., and its executive, Howard Marks, violated COPPA when, without notifying parents or receiving parental consent, they "collected children's ages and e-mail addresses during registration and then enabled children to publicly post their full names, e-mail addresses, instant messenger IDs and location, among other information." COPPA requires websites directed at children to obtain parental consent before collecting and using children's personal information. FTC Chairman Jon Leibowitz said of the ruling, "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. It's the law, it's the right thing to do and, as today's settlement demonstrates, violating COPPA will not come cheap." Michelle Dennedy, founder of The iDennedy Project, told the Daily Dashboard that the settlement is a message from the government that we need to value our children as much as we value our banking data and should be a wake-up call to the gaming industry as a whole. "We look at gaming and playthings as light fluffy topics, but where we're seeing ID theft happen is at...play groups, schools, all these light-weight things where our guard is down and we feel like it's fun, but the consequences to our kids are very real."
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