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FTC dishes out $1m penalty

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A social networking website has agreed to pay a $1m fine to settle with authorities over allegations that it collected, used and disclosed personal details of children under 13.

Xanga and its founders Marc Ginsberg and John Hiler have made the payment to settle the case with consumer regulator the Federal Trade Commission (FTC) in the US. The FTC said Xanga had committed an offence under the Children's Online Privacy Protection Act (COPPA).

The complaint said Xanga had actual knowledge that they were collecting and disclosing personal information from children, according to an FTC statement. 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, it said.

"Protecting kids' privacy online is a top priority for America's parents, and for the FTC," FTC chairman Deborah Platt Majoras said. "COPPA requires all commercial websites, 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 $1m penalty should make that obligation crystal clear."

In addition to paying the $1m civil penalty, Xanga will be monitored by the FTC and will have to delete all personal information that violates COPPA. The company will also have to provide links on its site to FTC educational material for a period of five years.

Xanga has 25m registered members. The FTC's case claimed that it had allowed 1.7m people under 13 to create personal profiles in the past five years. The creation of profiles involves the collecting and displaying of personal information.

Xanga agreed to a consent order which binds them to make the $1m payment and adhere to other conditions, such as the FTC monitoring and the posting of links to FTC material. Consent orders do "not necessarily constitute an admission by the defendants of a law violation", said the FTC statement.

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