Social networking Web site Xanga.com, and its principals, Marc Ginsburg and John Hiler, will pay a $1 million civil penalty for allegedly violating the Children’s Online Privacy Protection Act, the Federal Trade Commission announced yesterday.
Xanga.com collected, used, and disclosed personal information from children under 13 without first notifying parents and getting their consent, the FTC alleged.
The penalty is the largest ever assessed by the FTC for a COPPA violation, and is more than twice the next largest penalty, the FTC said.
According to the FTC, the defendants knew they were collecting and disclosing personal information from children.
The Xanga site stated that children under 13 could not join, but then allowed visitors to create Xanga accounts even if they provided a birth date indicating they were under 13, the FTC said.
They also failed to notify the children’s parents of their information practices or provide the parents with access to and control over their children’s information, according to the FTC. The defendants created 1.7 million Xanga accounts over the past five years for users who submitted age information indicating they were under 13, according to the FTC.
“Protecting kids’ privacy online is a top priority for America’s parents, and for the FTC,” said FTC Chairman Deborah Platt Majoras, in a statement. “COPPA requires all commercial Web sites, including operators of social networking sites like Xanga, to give parents notice and obtain their consent before collecting personal information from kids they know are under 13. A million-dollar penalty should make that obligation crystal clear.”
Xanga.com is one of the most popular social networking sites on the Internet. After setting up a personal profile, users can post information about themselves for other users to read and respond to.
New York City-based Xanga.com was founded by Ginsburg and Hiler in 1999. In 2005, Xanga had about 25 million registered accounts.
The FTC said it has barred Ginsburg, and Hiler to delete all personal information collected and maintained by the Xanga.com in violation of the rule and that it requires the defendants to provide links on certain of their sites to FTC consumer education materials for the next five years.