RealTime IT News

FTC Nails Xanga With Record Fine

If your children are under 13, they could be on Xanga without you knowing it.

Today, the Federal Trade Commission (FTC) fined the social networking site Xanga.com $1 million over alleged violations of the Children's Online Privacy Act (COPPA), according to a statement.

The FTC said Xanga and its principals, Marc Ginsburg and John Hiller, collected, used, and disclosed personal information from children under the age of 13 without first notifying parents and obtaining their consent.

The FTC said that Ginsburg and Hiller had "actual knowledge" of their unlawful dealings with children, and that's what got Xanga such a hefty fine, said John Feldman, a partner in the law firm of Reed Smith LLP.

"If you didn't comply, they nail you, but if you act like you're complying but you're not, it's even worse," Feldman told internetnews.com.

But Hiller said the problem his company had with its registration system to screen out underage users was due to technical inadequacies.

"Users were able to initially indicate that they were at least 13 years old when registering for the site, and then afterwards post a younger age on their profile," Xanga CEO Hiller said in a statement.

The problem wasn't as simple as booting those with non-matching birth dates, Hiller said, because many users who were over 13 used birth dates to convey different information than their biological age.

"Pet bloggers registered with their pet's birthday, engaged bloggers registered with their wedding date, and religious bloggers registered with their born again' date," Hiller said.

The FTC was unsympathetic.

"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," said FTC Chairman Deborah Platt Majoras.

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

The penalty is more than twice the largest ever levied by the FTC for a COPPA violation.

And beyond paying the steep fine, Xanga said it's implementing several new measures to protect children.

They are adopting best practices recommended by the Children's Advertising Review Unit of the Better Business Bureau, which include neutral age-screening and session cookies.

Xanga is also hiring Stephen Kline, a new Chief Safety officer and former cybercrime prosecutor, as well as additional safety personnel to delete illegal accounts.