Disney's Playdom Fined $3 Million for Violating Kids' Privacy
Disney-owned Playdom was fined $3 million last week for collecting and disclosing the personal information of hundreds of thousands of children under the age of 13 without parental consent.
The practice is a violation of the Children's Online Privacy Protection Act (COPPA), according to the Federal Trade Commission.
Playdom develops online multi-player games, and runs 20 virtual world Websites like "2 Moons, "9 Dragons," and "My Diva Doll." At least one of these worlds, "Pony Stars," is specifically directed at children, while the others attract a wide variety of users, including young kids. Between 2006 and 2010, about 403,000 children registered on general audience Playdom Web sites, with another 821,000 signing up for "Pony Stars."
COPPA mandates that Web sites must notify parents and obtain their consent before collecting, using, or disclosing a child's personal information. They must also post a clear privacy policy. Playdom and executive Howard Marks failed to do both, the FTC said.
Playdom collected the kids' ages and email addresses during registration and then allowed them to post full names, email addresses, IM IDs, and location, among other things, on their Playdom profiles. The company did not obtain parental consent to do this, in violation of COPPA, the FTC said.
The agency also said Playdom misrepresented itself in its privacy policy, which said it ban kids under 13 from posting 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," Jon Leibowitz, chairman of the FTC, said 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."
Playdom acquired the Web sites in question when it purchased Acclaim Games, Inc. in May 2010. In August 2010, Playdom became a subsidiary of Disney Enterprises.
In addition to the $3 million fine, Playdom is banned from violating COPPA and mispresenting itself regarding children.
For more from Chloe, follow her on Twitter @ChloeAlbanesius.
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