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.

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