Kids privacy violated
By Sumir Singh

The US Government set up the Federal Trade Commission (FTC) in 1914 and tasked it with consumer protection and competition jurisdiction in broad sectors of the economy. The FTC has sweeping powers to ensure that every business operating in USA follows the laws of the land and does not abuse its market power.

Playdom.com is a games site which has a number of popular games for children.  India is among the top 5 countries sending online traffic to Playdom.

The US Government has announced they have fined operators of virtual worlds $3 Million because they illegally collected and disclosed children’s personal information.

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The operators of 20 online virtual worlds have agreed to pay $3 million to settle Federal Trade Commission charges that they violated the Children’s Online Privacy Protection Rule by illegally collecting and disclosing personal information from hundreds of thousands of children under age 13 without their parents’ prior consent. This settlement is the largest civil penalty for a violation of the FTC’s COPPA Rule.

The FTC’s complaint charged that Playdom, Inc., a leading developer of online multi-player games, and company executive Howard Marks operated 20 virtual world websites where users could access online games and other activities, including 2 Moons, 9 Dragons, and My Diva Doll. At least one of these virtual worlds, Pony Stars, was a website specifically directed to children, and the company’s other websites intended for a general audience also attracted a significant number of children. Between 2006 and 2010, approximately 403,000 children registered on the defendants’ general audience sites, and 821,000 more users registered in the Pony Stars children’s site.

The FTC’s COPPA Rule requires that website operators notify parents and obtain their consent before they collect, use, or disclose children’s personal information. The Rule also requires that website operators post a privacy policy that is clear, understandable, and complete. The FTC alleged that Playdom and Marks failed to meet these requirements.

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