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Xanga.com fined $1-million in child privacy case

By ASSOCIATED PRESS
Published September 9, 2006

WASHINGTON - The Federal Trade Commission announced a $1-million settlement with the social networking site Xanga.com on Thursday, the largest penalty levied to date under the Children Online Privacy Protection Act.

The New York-based company and its principals, Marc Ginsburg and John Hiler, will pay the money to settle accusations that the site collected, used and disclosed personal information from children younger than 13 without notifying and obtaining parental consent first.

The complaint charges that the defendants knew they were collecting and disclosing personal information from children. Over the past five years, the site allowed 1.7-million visitors to create Xanga accounts after they provided a birth date indicating they were not yet 13, the FTC said.

The company, which had about 25-million registered accounts in 2005, also failed to notify the children's parents of the practices or provide parents with access to and control over their children's information, according to the FTC.

FTC chairman Deborah Platt Majoras said in a statement that the Children Online Privacy Protection Act requires all commercial Web sites to give parents notice and obtain their consent before collecting personal information from children they know are under 13.

"A million-dollar penalty should make that obligation crystal clear," she said.

Hiler, Xanga.com's chief executive, said the company has put in place a "stronger, more comprehensive" safety program including adding personnel to execute all account deletion requests from parents; creating a system that allows users to flag others who are underage or are posting material in violation of Xanga's terms of service; and creating a ratings system for user-generated content.

The FTC consent order does not constitute an admission of guilt. The order does require Xanga to delete personal information collected and maintained by the site that violated the act and to provide links on some of their sites to FTC consumer education materials for the next five years.

[Last modified September 8, 2006, 23:26:09]