Xanga.com to Pay $1 Million for Violating COPPA Rule

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Social networking Web site operators Xanga.com Inc. and its principals, Marc Ginsburg and John Hiler, will pay a $1 million civil penalty for allegedly violating the Children's Online Privacy Protection Act and its implementing rule. The penalty is part of a settlement with the Federal Trade Commission announced Sept. 7.

The complaint and consent decree were filed by the Department of Justice on the FTC's behalf in the U.S. District Court for the Southern District of New York.

According to the FTC, Xanga.com collected, used and disclosed personal information from children under the age of 13 without notifying parents and obtaining consent. The penalty is the largest assessed by the FTC for a COPPA violation and is more than double the next largest penalty.

Incorporated in 1999 and based in New York, Xanga.com, was founded by Messrs. Ginsburg and Hiler. They created 1.7 million Xanga accounts over the past five years for users who submitted age information indicating they were under 13, the FTC said.

Besides paying $1 million, the order prohibits the defendants from violating any provision of the COPPA rule and requires them to delete all personal information collected and maintained by the site in violation of the rule.

The defendants also must distribute the order and the FTC's How to Comply with the Children's Online Privacy Protection Rule to certain company personnel. The order contains standard compliance, reporting and record keeping provisions to help ensure the defendants abide by its terms.

For the next five years, the defendants must include a link to the Children's Privacy section of the FTC's www.ftc.gov site on any site they operate that is subject to COPPA. They also must include links to the FTC's recently published safety tips for social networking on any of their social networking sites.

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