Now Reading Fined $1 Million By The FTC? Fined $1 Million By The FTC?, a social network / weblogging platform boasting around 25 million members has agreed to pay a $1 million dollar fine for failing to alert parents whenever their child created a profile on their site.

(International Herald Tribune) The Federal Trade Commission said Thursday that Inc., a social networking Web site, had agreed to pay a $1 million (‘‚¬790,000) civil penalty for allegedly violating the Children’s Online Privacy Protection Act.

According to the FTC, the company “collected, used and disclosed personal information from children under the age of 13 without first notifying parents and obtaining their consent.”

Although social networking sites should take steps to protect minors online, forcing them to contact their guardians is probably easier said then done.

Requiring them to notify a child’s parent only works if the kid provides the correct information and not all kids are as forth coming with that information, especially in this day and age.

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Although we all want to keep our kids safe, parents should probably take a more active role in monitering the lives of their kids instead of relying on Uncle Sam to slap a seven figure fine on an internet company.

If the FTC continues to follow this policy across the board, we may see the end of social networks as we know it (at least in America that is).

View Comments (9)
  • I think xanga having to pay that much is absurd. I just heard about this last week. All kids have to do is lie about their ages, and I’m sure that is going on in all of the major social networking sites.

  • There are two effective ways to deal with this ruling.

    To set an example, Xanga should heavily enforce this by:

    1.) mandate that minors agree to some type of certification that their parents have read to and consent to their profile creation
    2.) If it turns out they created the profile without parental consent – accounts are banned and parents are fined.

    Unfortunately, the cost of business will inevitably go up but that’s the world we live in today.

  • I disagree with you Josh about parents being fined for their children’s actions. It sounds so Totalitarian. A little scary eh?

    What about just searching out the kid and notifying the parents? Let the parents decide the punishment.

    Maybe because I am from Canada that i think this way but isn’t putting people first before business a better way to deal with issues that may arise. If the cost of doing business online continues to rise many of us will not be able to do business online.

    There is so much fear bred into the online world today through media and government that the fear is just fear of fear itself. Fines do not accomplish much when the entity being fined is monetarily wealthy. Education would accomplish much more. A million dollars could educate a lot of parents.

  • Jessica,

    It’s just another example of a business expense being passed off to the consumers, happens all the time. Besides, the parents shoudl definitely be more aware of their children’s actions online, and if this is the best way for that to be accomplished, why not put some financial incentive into an act they should be performing in the first place.

  • Fining the parents is ridiculous. It makes no sense at all.

    You seem to forget there was already a law in place. They failed to follow the law because they were greedy or lazy. They knew that law existed and they made a tactical decision on how much profit they would make. It’s not a question about whether they should be fined, it’s only how much. In my opinion it shouldn’t be a set amount but a percentage of the gross profit during the time they offended. The only way to make companies understand they are not above the law is to hit them in their bank account.

  • I’m inclined to agree with Jessica .. notwithstanding that something has to be done to protect those who can’t protect themselves (children, minors, etc) .. education is the way Not fines. Has the appeal gone through yet?

    Sites have to rething their ‘verification’ process. Credit Card owners, or clicking links that suggest you are over 13 isn’t enough. With stuff like skype, internet long distance, text messaging, etc … I think somebody some type of ‘paypal’ or system like either run by entrepreneurs or FTC should be collecting phone numbers and track these kids .. (you don’t want businesses to collect them and re-spam them) … This way, instead of a verifying email .. a kid can give some FTC pre-approoved code proving that their parents approved them to play on the internet . Then the business could send that check like a credit card authorization to see if it’s a valid code, given the geometrics IP, host server, etc .

    I mean .. everybody either files a tax return – or doesn’t. For those who don’t, and they receive child support or family allowance .. penalize the parents if they don’t comply keeping the database current at least once a year.

    Just a thought .. and, not really much thought at this hour in the logistics of that – but, anyway…

  • Most internet businesses are run with a small staff, even the larger social networking sites. If they were to monitor and contact every youngster signing up, they would need a very large call centre to handle it. Most transactions online are totally automatic, for this reason. If you place the burden of social worker onto social networks, they will all go out of business. The economics just aren’t there.

  • “If you place the burden of social worker onto social networks, they will all go out of business. The economics just aren’t there.”

    Let them go out of business. There will be a hundred more to take their place who will find a way to work within the law and make money.

    Being lazy or a lack of imagination is not an excuse.

  • If the parents aren’t incentivized enough to supervise their children’s online activities, maybe hitting them in the wallet is a good place to begin. It’s really sad that measures like these have to be taken, but better to avoid your child becoming a victim to a sexual predator or creditor (interesting that the two terms rhyme) than be concerned about the future business of Xanga and all of the other social networks out there.

    I’m sure those of us on here with kids feel differently than those without.

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