Social networking Web site Xanga.com will pay $1 million — the largest penalty ever issued for violations of the Children's Online Privacy Protection Act — for repeatedly allowing children under 13 to sign up for the service without getting their parent's consent, the Federal Trade Commission announced Thursday.
In its complaint, the FTC alleged that Xanga, a rival to the popular MySpace.com, allegedly permitted creation of 1.7 million accounts by users who submitted birthdays indicating they were under 13. Collecting personal information from anyone under 13 without parental consent is a violation of the children's protection act, or COPPA, which was passed by Congress in 1998.
According to the FTC, after signing up for the service, children often posted personal information on their blogs.
"Protecting kids' privacy online is a top priority for America's parents, and for the FTC," FTC Chairman Deborah Platt Majoras said in a statement. "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. A million-dollar penalty should make that obligation crystal clear."
In a statement e-mailed to reporters, Xanga CEO John Hiler said the company has addressed the alleged violations and added additional safeguards to prevent underage children from registering on the site.
"Xanga has long been committed to making its site safer for its members," it said. "When these issues came to our attention, we instituted a stronger, more comprehensive safety and compliance program."
Hiler noted that Xanga has recently hired a new chief safety officer and added personnel to respond to complaints from parents.
The soaring popularity of social networking sites -- MySpace now claims it has more than 50 million members — has brought with it a new set of Internet troubles.
Earlier this year, a series of stories emerged linking MySpace and sexual predators, beginning with the story of California resident Nathan Contos, a 27-year-old paramedic who pleaded no contest to charges he molested a 14-year-old girl he met on MySpace.
For years, child safety experts have been concerned that teen-agers share far too much information about themselves — and their sexual desires — on social networking pages.
In reaction to complaints, MySpace changed its policy to prevent adults from contacting children, and vice versa. Still, child safety experts weren't satisfied by the move, as members can easily lie about their age when they sign up. And despite MySpace's policy of not allowing children under 14 to join the service, kids who lie about their age can easily skirt that prohibition.
According to the Federal Trade Commission, children who wanted to open a Xanga account didn't even have to show that level of ingenuity. Children merely had to check a box confirming they were over 13, according to FTC lawyer Mary Engle -- even if they otherwise entered a birth date indicating they were under 13.
Engle would not reveal what Xanga's explanation was for the lack of obvious fact-checking.
"Suffice it to say their explanation we thought was inadequate," she said.
Xanga has changed its technology to screen for appropriate birthday, Engle said, and has enhanced other mechanisms designed to keep young children off the site.
The settlement terms requires that Xanga submit to monitoring by the FTC to ensure there are no future COPPA violations.